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I am interested in opening a taxi-like business where a passenger can order a taxi by phone (or through mobile app). I do not live in US now and the search has not yielded any answers to me.

So the question is: how much does it cost to open an order-by-phone vehicle service (private hire) in terms of licenses and permits?

Do I need a special insurance for each vehicle? Do I need a licence for the whole business? Do I need other permits? How much do they cost?

I have heard that there are differences between various cities in the US.

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I closed this because outside of the standard answers of business cost -- the business license issue and costs are way too localized. Even car insurance is based on the zip code! But taxi's in the US are mostly a regulated industry with great variance in licensing rules and requirements. Here is a good overview: bls.gov/oco/ocos245.htm – Joseph Barisonzi Oct 12 '11 at 3:15

closed as too localized by Joseph Barisonzi, Christian, jimg, Zuly Gonzalez♦ Aug 23 '12 at 15:51

This question is unlikely to help any future visitors; it is only relevant to a small geographic area, a specific moment in time, or an extraordinarily narrow situation that is not generally applicable to the worldwide audience of the internet. For help making this question more broadly applicable, see the FAQ.

1 Answer

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This question can't really be answered very well here because of how widely it varies (both in terms of requirements and costs). Every city (and state) has differing regulations and requirements for exactly what is required for private hire cars. Generally speaking though, you'll need the following in area that you operate (with additional requirements in other areas):

  • Car License: All areas have boards or commissions that oversee the the licensing of private cars - you'll need to get (often expensive) licenses for every vehicle you operate.

  • Driver Licenses: All of your drivers will also likely need specialized commercial drivers licenses

  • Liability Insurance: Any business that is operation should have liability coverage - doubly so since you will be operating motor vehicles that could very easily get into accidents and kill/injure people. You should maintain coverage in the $2-5M range (per incident)

  • Collision License: You'll also probably want to have collision insurance on your vehicles to pay for any damage to them in case they are in an accident

  • Business License: Most states require you to have an overall license for operating the business (that way they know you're functioning and can collect taxes from you

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In addition, most large cities have a limitation on the number of cabs. You can not just open a new cab company. You need a "medalion" or something similar for each cab, and there are only a fixed number of those items. They have all been purchased- so you would need to buy one, at current market value to open a cab company there. – Gary E♦ Oct 11 '11 at 15:16

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