# How do cab companies make money?



## Dammit Mazzacane (Dec 31, 2015)

Notice I say companies, not drivers. The companies that own the cars, the companies that keep up the cars, the companies that allow the drivers in.

By owning the car, I assume. But how?

TwoFiddyMile noted that he pays $132 / week for his cab in Charlotte. Using that as a base, that's $7,392 a year toward the company leasing him the cab. (Naturally he makes more than $132 a week in take-home pay...) If this figure's wrong, we'll adjust.

So of that $7,932, how much goes to maintenance, licensing, taxes, dispatch, advertising, etc.? Do all taxi companies require dispatch, or could someone simply run a cell phone line?

This is a starting point for the conversation.


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## Mars Troll Number 4 (Oct 30, 2015)

132 a week is insanely low, are you sure that's not $132 a day? Or 132 for a few days?

In Orlando the company i work for takes 5% on credit cards and 
$72-$143 per 12 hour *shift *(no cap on miles, 1/10th of the shift cost charged per hour is charged in late fees on getting the cab back)

(the total generated per cab per day for taxis totals between 182-$228, but cabs don't always get taken out every shift/every day of the week.

Or 
*1 person* $762-$980 per *week *(1750 milage cap +33c per mile over)
or *2 people* paying (cant remember the number tbh $550-600 each) *PER 
WEEK *(2500 per week milage cap + 33c per mile over)

(gas, tolls and airport fees are NOT included)

(the sliding scale takes about 5 pages of explanation to explain fully)
(factors included, time of day, what county(s) they can work in, whether they can pick up from the airport, what kind of vehicle (currently Camry hybrids, Toyota Sienna's (wheelchair lift vehicles) and Ford Econoline Vans) whether or not they can pick up from Disney/downtown orlando. Finally one of the options is dispatch only with no themeparks, airport, or hotel cab stands.

Looking at these numbers it's no questioning they are making money, (Also note how ridiculously high the mileage cap actually is)

132 a week has to be the wrong number.
If you are wondering how a cab company can make money look at the numbers I put up, this is probably closer to what i would expect in bigger markets.


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## the rebel (Jun 12, 2016)

Dammit Mazzacane said:


> Notice I say companies, not drivers. The companies that own the cars, the companies that keep up the cars, the companies that allow the drivers in.
> 
> By owning the car, I assume. But how?
> 
> ...


I am pretty sure that twofiddymile owns his cab and is only leasing the equipment and paying to be under the cab companies umbrella. If you are using a cab company car, their insurance, maintenance, dispatch, and everything else they give you than you are usually paying $300-$650 a week depending on the company and the location. If you do not have a credit card processor like square than you are also usually paying them 5-6% on credit card and voucher processing. When I drove a cab I usually figured my total costs were $440 a week plus gas on average for a cab, and there were 50 drivers in a city with about 280,000 people in their service area. Of course this was all before Uber and back then we could make $350 on a good friday or saturday night, and holidays like new years and st patricks day you could make $600-800 in a night.


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## Dammit Mazzacane (Dec 31, 2015)

Intriguing stuff - and with taxi rates standardized by cities, no taxi co. can really undercut anybody.


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## Peanut hello (Sep 19, 2016)

Every city is different, like here in louisville . yellow cab charges $500 a week,others around $240, like green cab, if you own your company, all you have to pay is insurance , and I believe $1300 to get a taxi plate,inspection,driving record,.... now it is easy to own a cab . but you are at the mercy of the street.you go to a cab stand, bars , hotels ..


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## shiftydrake (Dec 12, 2015)

Here in StL it is as follows..............drivers that drive company owned vehicles pay $549 per week for any sedan.......$579 for van.....$599 for hybrid vehicles......owners pay $349 all drivers take car home pay weekly and responsible for gas and 3.75% for using company credit processing.....
I own mine so I pay $349 for dispatching and fleet insurance aloso my credit processing is only 2.7 percent....company drivers don't have to worry about maintenance that's why they pay what they pay......
Owners are responsible for their own maintenance that's why we pay what we pay.......but this is for largest and biggest and longest operating company.....other companies in StL charge differently......so my company brings in about 25k a week


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## Signal Twenty (Jun 26, 2017)

when I was in NY, the taxis and car companies would lease them for the week, but down here in FL, it's a 50/50 split...driver pays gas in both models.

What do you think is a better scheme for the driver?

I may be giving up this Uber thing...


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## dirtylee (Sep 2, 2015)

In Dallas, uber > cabs most of the time. 
When large conventions hits downtown, cabs > uber by a LONG SHOT. 

X drivers make $2.85 on these downtown min fares, pax pay $7 without surge. A damn joke.

Cabs are literally the same price for those trips. Driver gets $7.


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## oldfart (Dec 22, 2017)

the cab company that serves the Ft Myers airport is actulaay a joint venture of 3 local cab companies...rather than competing with eachother to bis on this exclusive deal, they formed a new company to make the bid

The company owns the cabs, drivers work every other day from the first flight of the day to the last
the company owns the cabs, and insurance, drivers are responsible for gas, Typically they pick up at the airport and deadhead back. Fares are split 50/50 drivers pay for gas and a carwash

Fares are by zone, not meter

So how does the company make money.... They get 50% of the fare


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## Taxi2Uber (Jul 21, 2017)

Don't forget advertising. Car toppers, wraps, on trunks, inside touch screens, etc.


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## Stevie The magic Unicorn (Apr 3, 2018)

Signal Twenty said:


> when I was in NY, the taxis and car companies would lease them for the week, but down here in FL, it's a 50/50 split...driver pays gas in both models.
> 
> What do you think is a better scheme for the driver?
> 
> I may be giving up this Uber thing...


% = Much better than flat rate rentals when it's slow, still good money when it's medium and not as good when it's really crazy busy.

flat rate = MUCH better when it's crazy busy, BRUTAL when it's slow.

On a flat rate deal for a rental i've kept as much as 90% of my fares, last night my cut was 58% with 30% going to the company, last night was a mediocre day, a little shy of my 2018 average to be honest.

Slow days are 50% going to me.

But incredibly god awful worst of the worst days... It's possible to _*LOOSE MONEY*_!

So business good you want= flat rates
Business bad= 50/50 split
Business OK= either or

50/50 is a lot more fair if you ask me. And if it was 50/50 i'd be driving a cab full time.

MY pay scale.. paying a flat rate, this is in a 9:00 PM-9:00 AM car without full pickup rights, no airport queue, ect.

This is revenue to profit comparison for doing a flat rate for ME PERSONALLY
The cab company I drive for DOES let me turn in the car early and say F! THIS if i just don't feel like doing it anymore. And i've done it, it REALLY sucks.

$80=-$20 *this one time i fell asleep for OVER HALF a shift*
$95=0 <1% I'll usually cut and run before midnight and take a small loss after only a few hours)
$150=$50 1% (I'll go home early and get my rental pro-rated if i'm on pace for this range)

$200-$230 revenue=$100-130 profit 23% (slow days)
$240-260=revenue $140-160 profit 50% (my actual average)
$270-310=revenue $170-200 profit 25% (above average)
$310+ =revenue $200+profit 1% (miraculous events)

It's very easy to see if i'm behind or making a good pace, and it's very very easy to see if i hit profitability.

I usually make the choice to stick it out or cut and run by midnight. I very rarely have to cut and run. Probably once in 4 or 5 months.

I start between 8:30 and 9:05
If by midnight..
$100+ I'm in great shape and i have no worries
$80-100 = i stick it out

$50-80 = on a Friday or Saturday, i'll stick it out until 2:00- 3:00 Am. At that point i'm royally boned and mathematically i'm better off just going home after 3:00

EXACTLY $50 = I'm going home with $10-15, much better than working all night to not make diddly. Last time i did this i took a $50 IOU *interest free advance* and walked home with $60.

<$50= i'm pretty much screwed if i'm at less than $50 at midnight 9/10 i'm going to just give up because i'll be in a foul mood anyway. I'll take a $50 IOU and mathematically lose money.

I've had 2 of these, ever (looking at my shift log spreadsheet) This is bad luck piled on top of bad luck on a slow day.


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## Oscar Levant (Aug 15, 2014)

Dammit Mazzacane said:


> Notice I say companies, not drivers. The companies that own the cars, the companies that keep up the cars, the companies that allow the drivers in.
> 
> By owning the car, I assume. But how?
> 
> ...


I've been in the taxi biz for some 15 years or so in SoCal ( and now San Diego). ALL of the big taxi companies I've driven for (Checker, Yellow, Coast, San Diego Taxi, Silver and Orange), that owned fleets, ALL OF THEM went belly up. In years past, it was profitable, but in the last 20 years or so, no, they didn't make money, they lost money. For them, it was worker's comp that put them out of business, as I understand it. The only ones that survived were those who sold all their cars to individual drivers, and reemerged as a co-op, now they didn't have to buy worker's comp. But there, all that is happening is the burden of overhead is now transfered to the driver. I've talked to owner/operators here in san diego, and they are working 16 hours days just to make a living. But this scenario may or may not be the case in different states and cities, so you'll have to research it in your area.


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