Gentlemen, I’d like to share my experience with a taxi business I started this year. I’m hopeful it may be of help to those of us who are looking for opportunities to invest in. I’ve in the past, shared some aspects of the business here.
First of all, it’s important to know that the Management of a business is the single most important aspect of any business. A business’s profitability depends largely on how it is managed.
I started the taxi business on the 21st of January, 2020. Before I committed to doing it, I spent over 6 months talking to both uber and taxi drivers whenever I found myself in any of them.
I learned several lessons.
1.No matter how good a driver is, he’ll choose the survival of his family over the payment of your weekly sales.
2. Fuel cost was a major drain on the ability of the driver to gather enough money to pay their weekly sales.
3. No effective monitoring system put in place by car owners to check on work done by drivers.
4. Uber drivers burn out with time as compared to the average taxi driver (too much stress).
5. Uber vehicles are under more stress than the average taxis.
6. No proper interview of drivers before vehicles are released to them.
7. No properly explained and spelled out terms to drivers before they begin work.
8. Zero commitment to vehicle health by many drivers.
9. Too much pressure from vehicle owners. (Using the vehicles without paying the driver)
10. Cheating vehicle owners (purchasing dead vehicles for drivers)
Because of the lessons learned above, I used the following strategy.
1. Purchase vehicles myself (through a friend) directly from Korea…. Value for money
2. Ensure that vehicles are in prime condition before handing over to the driver.
3. Buy the most popular cars (in this case, Kia morning, 2010, 2012 models)
4. By the LPG variant, not petrol. (83gh for a full tank and used for 2.5 days before u need another refill ). Also, LPG ensures the driver has enough leftover money in his pocket and has a reduced temptation to spend your money with his wife.
5. Install a tracker and inform the driver. This gets rid of the usual stories of “I went to the shop”, I didn’t work today, etc.
6. Ensure you use the services of the vehicle once in a while to get a feel of maintenance.
7. Always pay for the services of the car whenever u use it. This prevents them from feeling cheated.
8. Be inflexible with excuses (I still got 400gh a week even during the lockdown). I gave the option to park or use and pay me my money.
9. Use the work and pay system to ensure the driver is committed. Most drivers take better care of vehicles when they know they’d eventually own it.
10. Do not be overly greedy. Do not overprice the vehicle. The highest I gave to them was 48K over a 2.5 year period. I know people who have given similar cars to drivers at 57K
11. Be kind to the driver always, make him part of the your family.
12. Know the driver to some extent. I chose the drivers from the taxi station close to my house, who have consistently been very helpful and loyal.
13. Get a well-drafted agreement document to be signed by both parties and properly explained to the driver in the presence of witnesses.
14. Get a good investment to push the weekly sales into. This will encourage you not to spend the sales as they come in.
I highly recommend Ecobank EDC fixed income trust fund.
Since January, none of my drivers has missed payment.
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