How to Start Cab Business in India

How to Start Cab Business in India

• May 23, 2025

Starting a cab business in India isn’t just a way to earn money—it’s a gateway to independence, employment creation, and long-term impact. I’ve seen countless individuals go from owning a single car to running full-fledged fleets, and in this guide, I’m going to walk you through the entire process with the same practical, no-fluff approach that I used. Whether you're a solo entrepreneur or even part of a growing SEO company in Greater Noida looking to diversify into the transport sector, these insights will set you on the right path.

At Dench Infotech, we help transport entrepreneurs every day, and this isn’t theory—it’s what we live and breathe.

1. Understand the Market and Validate Demand

Before spending even a rupee, pause. I can’t stress this enough—research first.

Ask Yourself:

·        Is your area buzzing with airport transfers, corporate commutes, local rides, or outstation trips?

·        Are aggregator services like Ola, Uber, or Rapido already dominant in your location?

Do This:

·        Talk to local drivers and small taxi owners.

·        Run surveys using tools like Google Forms.

·        Use Google Trends to understand search interest in "cab booking" in your city.

If you're serious about how to start taxi business in India, this is your ground zero.

2. Choose the Right Taxi Business Idea

India offers several taxi business models. I started out with an Uber partnership, and later built my own brand—each has pros and cons.

Business Models:

·        Aggregator Model: Partner with Ola/Uber.

·        Independent Taxi Business: Run under your own brand.

·        Corporate Cab Tie-ups: Contracts with companies.

·        Car Rental (Self-drive/Chauffeur): Ideal for tourists and executives.

·        Intercity/Outstation Services: Popular for weekend getaways.

Your ideal cab business idea depends on capital, desired control, and long-term plans.

3. Create a Business Plan You’ll Actually Use

Planning isn't just for investors. It’s your roadmap.

Your Plan Should Include:

·        Initial investment estimates

·        Monthly fixed and variable costs

·        Expected revenue and cash flow

·        Vehicle acquisition strategy

·        Marketing channels

·        Risk management

Use Excel or Google Sheets. Be brutally honest with your assumptions.

4. Register and Structure Your Business

Legal structure impacts taxes, compliance, and growth.

Choose a Structure:

·        Sole Proprietorship

·        Partnership

·        LLP (Limited Liability Partnership)

·        Private Limited Company

Also register for:

·        PAN Card

·        GST (Goods & Services Tax)

·        Trade License

·        Shops & Establishment Act (state-dependent)

We help startups with digital incorporation, so if you get stuck—reach out.

5. Finance Smartly: Don't Overborrow

Unless you have savings, you’ll need capital. Be strategic.

Your Options:

·        Bank Loans (Public/Private)

·        NBFCs – Easier but higher interest

·        Leasing Companies – Less upfront cost

·        Investor/Partner Model

·        Government Schemes like PMEGP or Mudra Loan

Always check your EMI-to-Income ratio. We advise no more than 40%.

6. Acquire the Right Vehicles

You don’t need to buy a fleet immediately. Start with 1–2 cars, master the business, and grow.

Checklist:

·        Fuel-efficient (prefer CNG or diesel)

·        New vs. Second-hand: Based on budget

·        Commercial registration

·        GPS and basic tech infrastructure

Also explore electric vehicles. Several states offer EV cab subsidies.

7. Get Legal Permits and Licenses

Every vehicle and driver must be compliant.

Required Permits:

·        Commercial Vehicle Registration (yellow plate)

·        Vehicle Fitness Certificate

·        Commercial Insurance Policy

·        Pollution Under Control (PUC)

·        Road Tax

·        All India Tourist Permit (if intercity)

Visit your RTO or hire an agent—we’ve done both.

8. Hire and Retain Quality Drivers

Drivers make or break your brand.

Tips for Hiring:

·        Verify documents (DL, Aadhar, PAN, address proof)

·        Background check

·        Interview for city knowledge and attitude

·        Provide training in customer handling, app usage, and safety

Compensation Models:

·        Fixed salary

·        Per ride commission

·        Hybrid model (base + incentive)

Build a culture. Respect your drivers and they’ll respect your business.

9. Set Up Your Technology Stack

Technology runs modern cab businesses.

What You Need:

·        Cab app (customer booking + driver dispatch)

·        GPS tracking

·        Digital payment gateway (Razorpay, Paytm, PhonePe)

·        Customer support line

You can:

·        Buy ready-made cab booking software

·        Build a custom solution (we do this at Dench Infotech)

·        Use platforms like LocoNav or Fleetx for fleet tracking

We help clients deploy low-cost, scalable solutions. Let’s chat if you need help.

10. Promote Like a Pro: Cab Advertising and Marketing

Visibility brings customers. Here’s how we got our first 100 rides.

Marketing Tips:

·        Launch a website with local SEO (cab booking in Noida)

·        Register on Google My Business

·        Facebook/Instagram  ads

·        Partner with hotels, airports, travel agents

·        First-ride discount codes

·        Cab advertising: Place ads inside or outside your cars to earn passive income

Word-of-mouth still rules. Deliver a 5-star experience every ride.

11. Run Smooth Daily Operations

Your cab business isn’t passive. Stay hands-on.

Daily Ops:

·        Trip assignment and route optimization

·        Tracking and dispatch

·        Driver attendance

·        Payment settlements

·        Customer queries and complaints

·        Fuel usage and maintenance logs

Use tools to automate where possible.

12. Measure, Improve, and Scale

Growth isn’t luck—it’s metrics and decisions.

Track:

·        Daily and monthly trip count

·        Revenue per car

·        Cost/km

·        Fuel efficiency

·        Complaint rate

·        Driver ratings

Scale Smartly:

·        Add vehicles gradually

·        Expand into nearby cities

·        Start intercity or premium cab segments

·        Offer corporate cab packages

·        Franchise your brand

We’ve seen operators go from 1 to 100 cabs in 2 years—because they measured.

13. Overcome Challenges with Grace

Every cab entrepreneur faces issues. Trust me.

Common Challenges:

·        Driver absenteeism

·        Customer complaints

·        Fuel price surges

·        Vehicle wear and tear

Our Fixes:

·        Keep backup drivers

·        Scheduled servicing

·        Fuel cards with limits

·        GPS tracking with alerts

·        CRM tools for complaint resolution

The goal is consistency, not perfection.

14. Stay Ethical and Compliant

Honest businesses last. Period.

Do:

·        Renew permits and insurance

·        File GST returns

·        Maintain clean service records

·        Collect feedback regularly

Don’t:

·        Use private vehicles for commercial rides

·        Hide income from tax authorities

·        Disrespect customer rights

Customers feel the difference when you run your business with integrity.

Final Thoughts: Start Small, Think Big

I began my journey with one vehicle, a dream, and Excel spreadsheets. Today, I run a branded fleet and help others do the same.

If you’re wondering how to start taxi business in India, my advice is: start with action. Build slowly. Learn from every ride. Adapt constantly.

Whether your taxi business idea is a one-man show or a fleet startup with a cab app, you have a chance to build something real.

At Dench Infotech, we build websites, booking platforms, and digital marketing  campaigns for cab startups. If you need help setting up, promoting, or growing—let’s partner up.

Let’s drive your success. One ride at a time.