How to Start a Shuttle Service Business

When most people think of shuttles, they usually think of trips to and from the airport, but there are many other types of shuttles opening for business these days. Shuttles may go from one specific destination to another or may be more personalized for the customers' needs by taking them to and from destinations in the same general area. Both types of services typically require a van or a small bus.

There are essentially two different types of shuttle services: scheduled and on demand. You will need to research what is currently being offered in your area to determine which is the best service for you to begin. A scheduled shuttle service picks people up and drops them off at designated locations, like from a hotel to an airport or from one tourist destination to another.

On-demand shuttles pick people up from their homes or offices and take them to their destinations, with reservations booked online or over the phone. These work much like a taxi except the shuttle makes additional stops along the route to pick up and drop off other passengers. The fares are less than what a cab would cost, but the waiting times and ride times are usually a bit longer.

Find a certified public accountant and a commercial insurance agent who are both familiar with the transportation industry in your area. The number of vehicles you need and their size should be determined by your shuttle business operational framework, which involves the number of trips your service will make and its estimated passenger load.

Your local and state governments will have specific requirements you will need to follow before you can let passengers board your shuttle bus. These can vary from one place to another, but a commercial drivers' license, vehicle insurance and liability insurance are practically guaranteed to find a place on your checklist. If you plan to offer a shuttle across state lines, you will need to meet additional interstate requirements from each state as well as the U.S. Department of Transportation.

In Florida, for example, you would have to register your business with the Florida Department of State, apply for an employer identification number from the IRS and then register with the Florida Department of Revenue. You would need to apply for a license from the Florida Department of Highway Safety and Motor Vehicles. Because you are operating a commercial vehicle, you would also need to apply for a Fuel Tax License and a Pollutants Tax License in Florida.

In California, your shuttle service would likely be deemed a Passenger Stage Corporation. This means that you would have to apply for a license through the California Public Utilities Commission. This, of course, is in addition to local licenses and permits that may be required.

Commercial vehicles, including your shuttle service, are not allowed to pick up or drop off passengers at airports without an airport permit. To apply, you will have to contact the ground transportation unit of each airport.

If you are in Los Angeles, for example, and want to offer shuttle service to and from LAX, you would need a Courtesy Transportation Services Permit for each vehicle from Los Angeles World Airways. Each vehicle you operate at the airport must have a valid decal and an Automatic Vehicle Identification transponder issued by LAWA. If you don't meet these requirements, you may be subject to a fine and may have your vehicle impounded.

In addition to the permit fee, performance guarantee and the fees per trip (which is why you need a transponder), LAWA has a lengthy list of requirements. These include having workers' compensation for your employees, up to $5 million in auto liability insurance and $500,000 in general liability insurance.