Cost of starting a taxi business in Kenya 

Overall cost and estimates of starting a taxi business in Kenya 

Step	Estimated cost(Ksh.)
Purchasing a car	300,000-3million (per car, depending on the type)
Customizing it for taxi	100,000-500,000
Hiring driver/drivers	17,000-39,000 monthly (Negotiable)
Insurance	2.5%-3.2% of the insured car.
Advertisement	20,000-200,000(highly variable)
Setting aside emergency funds	Around 300,000

The above costs might not be applicable to anyone looking to just purchase a car and register it with existing taxi companies in Kenya Like Uber, bolt, mara Moja, swvl or any other. That would just need you to budget for purchasing the car and insurance plus some additional costs like registration fees payable to the company. 

Both ways could also work very well. The only difference is that in one instance you will be the business owner. This might be a lot more profitable than registering with a different cab driver. 

You should therefore understand the process and cost of starting a taxi business in Kenya so that you know how to go about it. The whole process is discussed below.

A breakdown of starting a taxi business in Kenya-step by step 

Overview

Taxi business is one of the most profitable businesses in Kenya right now. Many people are investing in it every day. However, it comes with a whole lot of challenges and tricky situations that need a lot of planning and strategy.

 The outline above gives a summary of the few steps that you can take to start a taxi business in Kenya. With all factors held constant, it is possible to come up with the business in a few weeks or months depending on the amount of money. 

Let’s get into the details of how to start the business as well as the costs involved in starting the business below;

Finding the right car/cars

The car is the backbone of the taxi business. You need a car in perfect condition to help you start the business. If you are looking to start the business on a larger scale, then you need more than one car to start your taxi business. Therefore, you need to find just the right car for this purpose and customize it for a taxi. Sedans are the best for the taxi business in most cases. 

Both used and new cars could be used for taxis. However, they need to be checked by a professional and approved to be in good condition because they will be carrying people around and it might be bad to put their life in danger by having unroadworthy cars carrying them. 

Cars are available at different dealerships in Kenya and you could find both brand new or used ones at fair prices depending on where you chose to purchase them from. You can learn more about legit car dealers in Kenya here.

Purchasing the car 

After Identifying the car you want to buy, you can go ahead to purchase it from the best dealership around. Purchasing a car usually requires one to be careful to make sure they get value for the money they are investing. 

Since there are a lot of options to choose from, you will need to take your time to decide on the type of car you want and the amount of money you can comfortably invest. However, as we mentioned, it is more profitable to have more than one car in the taxi business. That means you will need several cars before you start the business. 

To find the cars at an affordable price, you can consider importing used ones from Japan or any other country. Here is a full guide on how to import a car to kenya. 

Customizing your car for taxi

Once you acquire the car/cars, you will need to get them ready for the taxi Job. This would mean painting them black, grey or white, which are mostly preferred in Kenya. 

This would take some money to achieve since you will need to take the car to an auto repair shop to make the necessary changes before it is ready to hit the business. This will heavily depend on the number of cars you have as well as the type of car you have purchased. 

This is where you can do the necessary mechanical checks too to make sure the car is in good condition. You can also add the colors of your brand or the logo to help customers identify your taxi cars easily.  

Hiring an NTSA-approved driver/drivers

Some people prefer to do this part on their own especially if they are investing in a single car. However, when you have several cars, you might need to have multiple drivers. For the purposes of the safety of the passengers, you should strictly find well-trained drivers who meet NTSA qualification criteria.

They must be holders of a driver’s license and must have trained for the required period and qualified to become drivers. This is another part where you need to plan well. You have to agree with the drivers on the payments. This will vary and therefore we can’t estimate the average cost of paying a driver. 

Getting insurance cover 

Insurance is a key factor, especially for cars. You need to have your car insured before you can have it serve your customers on the road. This is an important step to take. 

There are several car insurance companies in Kenya which offer quality services in Kenya. It is a requirement to have your car under comprehensive insurance before it starts operating on the road. 

In case you have several cars to start with, you can find deals that cover all of them cumulatively. The main issue is having the cars insured before you let them be used on the roads.

Advertising your taxi business

It might take some time for you to be well known and have enough customers. However, aside from your random daily customers, you might want to advertise your business so that you get more customers.

This could be done through creating a mobile application for your taxi, where people can order the services online. This might need some extra capital to develop but it will help a great deal to have it for efficiency. 

After the application is made, you can then involve yourself in social media campaigns or adverts on social media platforms. This will help you get noticed and have many customers. 

What you should avoid when starting a taxi business in Kenya

Like in any other business, there are bound to be pitfalls that you as a businessman/woman should learn to avoid. Taxi business in Kenya has a lot of them. Understanding some of them might save you a lot.

Some of these challenges include the following;

It is highly competitive

The taxi business is highly competitive. There are so many people investing in it in Kenya at the moment. This is why it is difficult to merit unless you offer the best services.  

An option you have is to join the known taxi companies in Kenya which could help you with the marketing as well as providing the services. All you need to do is to bring in a car and register with them.

Sometimes the demand is low

Apart from the high competition for few customers, there are some days which you could make very little. Taxi business is quite unpredictable.  Overall, a normal taxi business could make you up to ksh.7,000 a day. However, this amount could go down to ksh.1,000 when there is little demand. 

Uncertainties

Uncertainties are one of the major blows of any business. However, for the taxi business, it is worth mentioning because it is bound to happen more regularly than in any other business. 

You should learn to cater to emergencies when they arise. Since these are vehicles, there could be problems, maybe with the engine, sometimes, high fuel prices or any other problems associated with cars on the road. Apart from those taken care of by the insurance companies, you need to have even more cash set aside for emergencies. 

Those are the main problems that are commonly associated with this business. However, new ones arise each day and unless you organize and plan well for them, you might be unable to run the business. 

Top ten taxi companies to invest in in Kenya

The following are the most reliable taxi companies that you could invest in if you are not willing to start the business on your own. 

1. Bolt 
2. Uber
3. Swvl
4. Jimcab
5. Little cab
6. In driver
7. Wasili
8. Pewin cabs
9. Kenatco 
10. Delight cabs

Cost of  starting taxi business in Kenya-FAQs