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Taxi business?

Discussion in 'Business & Startup Investing' started by charliey, 26th Feb, 2008.

  1. charliey

    charliey New Member

    Joined:
    19th Jun, 2006
    Posts:
    1
    Location:
    Melbourne
    Hi all,

    Is there anyone invest in Taxi business in big cities like Sydney or Melbourne?
    What's the pros and cons?

    Thanks
    Charlie
     
  2. DaveA

    DaveA Well-Known Member

    Joined:
    19th Feb, 2007
    Posts:
    617
    Location:
    Sydney, NSW
    id be interesting in finding more out though...

    as far as i know its pretty much a monpoly and the best you can hope to do is own a licence
     
  3. Brendan

    Brendan Member

    Joined:
    10th Feb, 2008
    Posts:
    19
    Location:
    Melbourne / London
    Interesting question, I have been thinking a similar thing but with private cars, a bit like a chauffeur business, or driving the private 'VHA' hire cars...

    I guess some questions that you would need to try and find answers for would be;
    Is it a hard market to enter, i.e is it flooded, or is there a waiting list?
    Are there limited anount of VH or Yellow cab plates available - how much are they?
    How much does a Taxi License cost?
    What taxes do you pay? etc..
    Insurance?

    I think there is so much room for improvement in Australia's taxi service, and it is a market that could be excelled in if some methods that are used overseas are taken into account..

    Would be good to hear your progress on researching this business!
     
  4. samaka

    samaka Well-Known Member

    Joined:
    30th Sep, 2007
    Posts:
    308
    Location:
    Sydney
    Macquarie Bank tried to break the monopoly and failed - no offence intended, but I don't think you'd have much luck.
     
  5. myarhidia

    myarhidia Member

    Joined:
    12th Oct, 2006
    Posts:
    21
    Location:
    Kingsgrove
    I know two people that have invested into Taxi's in Sydney, both with different approaches.

    1 - Bought a plate, bought a taxi, hires the taxi out to drivers, per shifts, Sunday morning does the service / maintenance, Sunday arvo if he isn't doing anything drives it himself (has a full time job).

    2 - Bought a plate, leases the plate out to Taxi's Combined.

    I have no idea the costs / returns associated with either of the above. #1 bought the plate over 15 years ago, he's happy. #2 bought is about 2 years ago, didn't want the hassle of running a cab, liked the return for no effort on his behalf (unlike an IP).

    There is one important factor you should always consider when purchasing a plate (anywhere), and that is the local transport authority. There is nothing stopping them issueing more plates. What this means is that when more plates hit the road, the value of the plates drops accordingly. Although they tell me the yield is good, I think the growth is crap.
     
  6. The Stig

    The Stig Well-Known Member

    Joined:
    3rd Dec, 2007
    Posts:
    190
    Location:
    Central Coast NSW
    The people I bought my office from made their money from Taxis. They went into building and developing properties. Not sure how they went.

    The mechanic next door to me has 8 taxis.

    He buys the cars 2nd hand for as little as possible.
    He fixes them himself ofcourse.
    I can't remember if he owns the plates or not.

    He basically looks at each taxi as a positively geared investment.

    I worked out if I bought the plate yourself, the car yourself and drove it yourself I could make up to 20% return on my investment PA.

    The plates if rented out make about 5% per annum from memory.
     
  7. DaveA

    DaveA Well-Known Member

    Joined:
    19th Feb, 2007
    Posts:
    617
    Location:
    Sydney, NSW
    plates in sydney are like 400k. Thats a lot to lay out with very little chance of getting finance (its not like you can get a 80% loan).

    I thought i saw on the forum earlier this year someone said a yield of 7.5%, but that doesnt seem positive geared for me...