[Abbas]

Hey Guys !!!

I am planning to invest in Taxi/cab business. Need help from you guys. Following is my dilemma:

1. Which car to buy?

a. Tata Indicab
b. Mahindra Logan
c. Maruti Esteem
d. Scorpio
e. Any other car (plz suggest)


2. How much can i expect monthly rent from the above cars i mentioned.



3. Shall i go for a 2nd hand or invest in a new one?

4. Which type of business module will be better?

a. Weather to give it on outright rent. In this case the risk is high since the driver has to be trusted and my involvement will me minimum.

or

b. shall i hire a driver and pay monthly salary. The risk level in this is low but my involvement will be more.

Guys whoever has any info on this please help me out with their experiences.

Abbas.

[TrueDreamer]

Are you looking for Intra city or Inter city? If Intra City, are you targeting the Urban Vizag or the rural areas surrounding it?

Have you considered Tata Winger or Tata Magic or Maruti Suzuki Eco ? How about Ford Fiesta (gives pretty good FE)?

Please go for second hand ONLY if the vehicles are really maintained well. The comfort and appearance of your cab will also play a role in fetching the (repeat) customers.

[rg_chn]

I was once told by a cab operator that cabs older than 5 years are not permitted to be used. You might want to check it up before going in for used cars.

[FanaticOnWheels]

The Indicab/Logan seem to be your best bet. They give reasonably good FE, and since most of your cars will be catering to intra city needs, the aforesaid vehicles should be good enough. You can probably get a Scorpio for those long distance journeys, but then again, it depends on how far you wish to go as far as the distance is concerned.

[raj_5004]

hi abbas, i have replied in bold-

Originally Posted by Abbas

Hey Guys !!!

I am planning to invest in Taxi/cab business. Need help from you guys. Following is my dilemma:

1. Which car to buy?

a. Tata Indicab
its actually a nice choice but now very common. it does not have a boot. so if you are keen on tata's low maintainence/cost of spares & good fuel efficiency, buy a indigo instead. but tatas are prone to maintainence issues after 2-3 years, so its better to sell these cars after 4 years. and do not to buy a second hand tata!

b. Mahindra Logan
this i think is the best choice. better than the indigo in many ways. better ride quality, more space & bigger boot. also, fuel efficiency is the best in the class. quality & refinement is good too. as far as i have seen, they are very reliable too.

c. Maruti Esteem
no ways dude! this car cannot be a taxi in any respect. low GC, small boot & cramped cabin. add to that a bouncy ride. FE will also be less! only saving grace is maruti's A.S.S, but will your cabs really go to an A.S.S for servicing??!!

d. Scorpio
again no ways dude! scorpio is not meant for the cab business. it has the performance, not the FE. it has got butch looks but not a spacious cabin. it has bouncy suspension & there is no reason you should look at a scorpio for cab business.

look at the tavera instead. it is more spacious, has a better ride & is more fuel efficient. but after BSIV, it is discontinued from certain cities. so if that bothers you, a better option for a 7 seater cab is a xylo.

if you can spend more, the best option is an innova.

e. Any other car (plz suggest)
if i was in your place, i would buy logans & xylos.

2. How much can i expect monthly rent from the above cars i mentioned.
down south, a innova gets around Rs. 12 per km. indigo gets around Rs. 7/km.

3. Shall i go for a 2nd hand or invest in a new one?
new ones are always better.

4. Which type of business module will be better?

a. Weather to give it on outright rent. In this case the risk is high since the driver has to be trusted and my involvement will me minimum.

or

b. shall i hire a driver and pay monthly salary. The risk level in this is low but my involvement will be more.

hire a trustworthy driver & pay him monthly salary.

Guys whoever has any info on this please help me out with their experiences.

Abbas.

[aargee]

You left out Innova my friend. What's the segment you're looking at? Is it simply call by dial or corporate pick up & drop or hotel services or hospitality services with foriegn delegates or government sector or long tour operators? By the way, what's your capital investment? Are you planning to go for loan, if so by how much percent? What's your countable experience on this business?

Do not get offended my friend, but to me it looks like you're asking out of innocence due to a frustrated job. There's much more troubles & much more experience that needs to go in. If you've all those answered, then questions such as which car, drivers, business model etc will never crop up. To me, these are elementary questions in a cab rental business.

[CPH]

Originally Posted by aargee

You left out Innova my friend. What's the segment you're looking at? Is it simply call by dial or corporate pick up & drop or hotel services or hospitality services with foriegn delegates or government sector or long tour operators? By the way, what's your capital investment? Are you planning to go for loan, if so by how much percent? What's your countable experience on this business?

Do not get offended my friend, but to me it looks like you're asking out of innocence due to a frustrated job. There's much more troubles & much more experience that needs to go in. If you've all those answered, then questions such as which car, drivers, business model etc will never crop up. To me, these are elementary questions in a cab rental business.

Frame this and put this in sight of your desk!

I only have to add this:

Starting paying a driver without a business plan and without a client base is commercial suicide unless you have a lot of money in the first place. But then you would want to invest it into a safer business.

If you want to start a business you have to be the first out to do it.

[iamback]

I will suggest you to check out the New Maruti Suzuki EECO. Why EECO ?
Its cheap.
Its spacious.
Its Comfortable.
Good Mileage.
and Its from Maruti.

Why Maruti ?
Good Service.
Many A.S.S. all over India.
Good Built quality.

Also i want to tell you that a Travel Company in Pune Called Wings Radio Cabs brought 100 EECO. See this article. 100 Maruti Eeco cars in Wings' fleet | DNA : Daily News & Analysis; Mumbai | Find Articles at BNET

Article Souce : findarticles.com

[aargee]

Originally Posted by CPH

If you want to start a business you have to be the first out to do it.

@CPH Sir, don't know why so many people have the thought of starting a business at wink of an eye these days? Its good to see the spirit, but not many tries to understand the depths; like the other day we saw a college grad questioning on setting up automobile workshop.

@Abbas - I'm just trying to help you remain cautious as its very easy to get lost in business and did you know only 20 out of every 100 business succeeds? ? Be it automotive or non automotive. Again, I reiterate, I don't intend to demotivate you in anyway.

[pramodkumar]

Ok let me be the devils advocate here

There is no mony involved in the cab bussiness unless its used by some BPO.

Here is the catch, the BPOs usualy pay the operator after 45 days, the operator pays after 60 Days.

There are two types of hires basically,
monthly rental:- The operator pays you a sum monthly and all the expenses from fuel to maintance to driver salary is paid by the cab vendor.

Per KM charge:- Here the cab operators charge the company some x amount and all the other expenses are bourne by the operator and finally you get 1-2 Rs/ KM for renting your car.

The margins are too low, so most of the cab guys do not maintain the cabs well. You will have to have more than one car attached to the vendor inorder to start making profit, but again if the vendor goes broke all your money would be lost.

Never buy a car on EMI thinking that it will pay its EMIs itself. If there is no work there would not be any money and you might end up paying the EMI from your pocket.

The cab business is no longer profitable as big vendors with 1000 plus cabs rule the show.

Cities like Hyderabad has Meru cab services where a driver with a badge can invest some amount and the company owns the cab for 5 years and the guy would be given a sal based on his running. The EMIs are paid by the company, so is the fuel bill and maintanace, once the 5 year period is over the car is handed over to the guy who has invested initially(most of the cases the driver himself), By this time the car is all battered and is ready to go to the junk yard.

Seriously, there are many other options why cab? Remember if you wanna aim, aim really high, most of the corporates are getting into the bussiness, M&M has a fleet of vehicles and most of the cabs for call centers across india is managed by them. You do have big rivals.

Pramod

[adheesh]

Originally Posted by Abbas

Hey Guys !!!

I am planning to invest in Taxi/cab business. Need help from you guys. Following is my dilemma:

1. Which car to buy?

a. Tata Indicab
b. Mahindra Logan
c. Maruti Esteem
d. Scorpio
e. Any other car (plz suggest)


2. How much can i expect monthly rent from the above cars i mentioned.



3. Shall i go for a 2nd hand or invest in a new one?

4. Which type of business module will be better?

a. Weather to give it on outright rent. In this case the risk is high since the driver has to be trusted and my involvement will me minimum.

or

b. shall i hire a driver and pay monthly salary. The risk level in this is low but my involvement will be more.

Guys whoever has any info on this please help me out with their experiences.

Abbas.

Esteem has already been disconcontinued and Mahindra Logan although would be a very practical car, is going to being discontinued soon (I cannot say anything more on this regard). Why not consider the Ford Ikon Diesel ? The spare parts prices have been revised, the fuel economy is the best in all classes and due to the launch of Figo, the sales would be all time low resulting to heavy discounts. Just my 2 cents . Anyways, all the best for the venture. Now I know whom to contact to hire a cab is Vizag.

Regards,
Adheesh Parelkar