How to Start a Passenger Transportation Company

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As the average price of a gallon of gasoline steadily creeps higher each year, more and more motorists are seeking alternatives to driving themselves. Many entrepreneurs have capitalized on this trend and numerous passenger transportation companies have started to address the growing local, municipal, and regional need. Even though passenger transportation has been an established business segment since before the invention of the wheel, the modern passenger transportation entity will need to take several critical steps in the formation of their business concern.

How to Start a Personal Transportation Company

Identify the transportation needs of the local or target market. You will need to survey and/or observe a number of commuters or motorists to discover the transportation need and what form of transportation would provide the most value to the target consumer. Don't limit yourself to the traditional taxi service; other forms of passenger transportation services include: pedal cabs, horse drawn buggies, limousines, commuter services and rickshaw cabs. Carefully research your transportation business concept before you spend money on its development. Sometimes an obvious need in the market goes unsatisfied for a reason, such as a regulation or restriction.

Research and obtain the necessary licenses and permits associated with the business you intend to operate; this can include liability insurance for passengers, taxi licenses, and permits to operate certain types of vehicles on city streets (pedal cabs, for example). Be sure you have a clear understanding of the taxes, restrictions, and operational regulations for the type of passenger transportation you intend to offer.

Establish your routes or service areas. Many personal transportation companies will find it advantageous to focus on specific routes or service targeted geographic areas to reduce expenses and maximize efficiencies. Some municipalities will often require certain types of transportation be limited to areas of the city, restricted from others, or consigned to established routes depending on the type of service offered.

Obtain the vehicle(s) and infrastructure necessary to produce or deliver the transportation service. This will include securing the necessary network of professionals that will maintain your equipment, storage facilities, operators, and the required insurance and inspection certifications.

Market your service by communicating to your target consumer the value you provide through your service. Your marketing message should include how your customer will benefit from the purchase of your passenger transportation service, how your service is different and better than your competitors, and how your service provides a greater value than the price.


  • Thoroughly investigate the backgrounds of any drivers you staff for your passenger transportation service and ensure that they are well trained in customer relations.