As a taxi company, it's tough to grow the business because of the high level of regulation. That is, you have to somehow acquire a permit to put an additional taxi out on to the street. There are a few ways to do this:
1. Apply for a permit during a Government Issuance: At regular and established intervals, a regulator will offer up permits. Companies and individuals can apply for the permits and the regulator will have criteria that they use to decide who is most fit to receive another permit.
2. Buy a permit during a Government Auction of Permits: Regulators may sell permits during an auction. There is almost always a value to these permits so the local government can earn revenue from these auctions.
3. Buy a permit from a private permit-holder: These permits may be owned by individual drivers, companies, businessmen, companies, etc... meaning you can buy the permit from them.
4. Attract a permit-holder to your company: Often an individual driver with a permit can choose which fleet to which they want to affiliate. With favorable terms, this permit-holder will come to your fleet, increasing your fleet size.
5. Acquire a company: This is sort of like buying a permit, but you are also buying their book of business, their drivers, cars, dispatching systems, etc..
Why is it good to increase the fleet size? With a larger fleet, you can service a larger area with more corporate clients and make more customers happy. Economies of scale always help your business become more efficient and more profitable (for a discussion of economies of scale see a future post...). And typically, it is very difficult to cover all your fixed costs as a very small transportation company (under 40 cabs).
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