Taxi Business in the Philippines
Taxi Operation as Business?
Taxi or Taxicab, is a type of vehicle for hire with a driver in which a passenger or a group of passenger pays to get to a preferred drop-off point. Unlike Jeep or tricycle, the passenger occupies the cab and does not need to share with other taxi passengers on that ride. The service actually provides service for the public in a form of convenient and fast transportation within the Metropolitan area. With this business scheme in which the passenger pays per ride, the driver will issue a receipt from the taxi meter for the computed fare amount based on LTFRB approved fare guideline. The pick up of passenger does not require the taxi driver to fill the taxi and wait, but instead can get passengers from taxi stands that are usually located at airports, railway stations (MRT, LRT), malls, hotels and other places with a lot of passenger flow. Drivers can also get passengers from the sidewalks calling them for their service. Taxi boundary is set to Php 800.00 to Php 1700.00 daily for every taxi driver paid to the taxi operator. We will go deeper into the Taxi Business in the Philippines.
Taxi Operation Review
As an operator, you are mandated by LTFRB to obtain a franchise on your taxi operation business. For the past 15 years, LTFRB has put moratorium on taxi franchise which is valued at Php 30,000. The way taxi operator startups get franchise is to buy existing franchise. Based on the Rail, Water, Land and Air Transportation Statistics
2007-2012 of the Philippine Statistics Office, the car for hire/ taxicabs number remained fixed due to the ongoing franchise moratorium.
|
Cars |
2007
37,648 |
2008
35,342 |
2009
39,812 |
2010
41,787 |
2011
33,131 |
2012
36,426 |
Table 1 Car for Hire Statistics 2007-2012
Source: http://www.nap.psa.gov.ph/secstat/d_trans.asp
Meanwhile, taxi franchise are acquired from buying taxis with current franchise. You may already checked taxi franchise for sale ads out there or online. Franchise do not expire when you apply for renewal which can be sold together with the taxicab. If the taxi is no longer repairable, the franchise can be associated to a new taxi car. Usual taxi units are Toyota Vios, Toyota Avanza, Toyota Innova and Kia Rio. Price of secondhand taxis depends on the unit of car, the mileage, condition, and associated franchise date. Price range from Php 250,000 to Php 500,000. Buying multiple taxi for Taxi Operation business involves putting enough capital for a sustainable income and faster return-of-investment or ROI.
Government Regulatory: LTFRB Taxi Franchise
With an eye for the implementation of PUV Modernization Program by the LTFRB, it mandates the need for training for public utility vehicle drivers, which includes taxi drivers.
As an update this June 3, 2017 by DOTr Secretary Arthur Tugade, the Omnibus Franchising Guidelines once signed will remove the moratorium for PUV franchise applications. Take note in November 17, 2003, the Land Transportation Franchising and Regulatory Board (LTFRB) issued Memorandum Circular No. 2003-028 which placed moratorium on franchise release. This will help new taxi business operator to enter the taxi sector and earn.
Taxi Operators need to comply with insurance requirement and provide passengers with official receipts. It is also the responsibility of the operator to do background check of their drivers and ensure proper display of driver identification card in a conspicuous location in the taxi. Proper taxi marking must also be observed. Always abiding by the law will help your Taxi Business in the Philippines in the long run.
Taxi Business and it’s Competition
With the developments in Transportation Network vehicle service or TNVS, we expect for clarification on what is TNVS in the public utility vehicle picture and the applicable LTFRB rules that would affect it’s course of business. On July 2017, LTFRB fined Grab and Uber with Php 5,000,000 each for permit violations on the counts of non-compliance to the 2-year certificate of accreditation and franchise requirement for all drivers before starting driver’s operations.
The developments happening shows taxi business strengthening amidst competition from TNVS.
Final Note
With the information about Taxi Business in the Philippines, pointers, requirements and review of the business may have inspired you to start your own taxi operation. You can also check for latest business ideas and reviews under the site’s Business Section.
