Uber has disrupted the ride-hailing business space with its scale of operations, riding options that range from bikes, to mini cars, to SUVs, and its niche luxury cars ride-hailing services through UBER Premium and Uber Lux.
These premium car services allow riders to experience luxury first-hand at affordable prices. These niche luxury rides can add value to special occasions, high-profile corporate transport services, airport transit, etc.
Securing finance, purchasing vehicles, compliance, marketing and promotions, and maintenance are key to limo-hailing businesses. According to the Entrepreneur magazine, luxury cars ride-hailing service owners can easily make a six-figure income with luxury car-riding services.
Here is a step-by-step guide to starting your Uber-like ride-hailing business with luxury cars.
Identify Your Target Market
The luxury cars ride-hailing market is divided into corporate and occasion-based markets. The former includes picking up and dropping off people from/at airports, offices, hotels, and other corporate venues. The latter pertains to providing ride services during special occasions like birthdays, anniversaries, weddings, etc.
The corporate model may pose continuous business requirements all year long, while, the latter depends on the demand for special occasion services in your region.
It is important to determine the needs of your target market and schedule vehicles or plan trips accordingly. The type of services you intend to provide will influence your investments, operational costs, and overheads.
Once you have zeroed in on the type of market you want to pursue, a business plan construction must be done for formulating a concrete roadmap of events and estimation of resources. Understanding your local market and doing a competitor analysis is key to this step.
You will need to get a business license/permit, liability insurance, tax identification number, personal asset protection, and other important paperwork done. For-hire insurance may also be required in some regions. It is vital to understand the local governing laws for limo services and comply by getting the paperwork done. This process may take weeks to get done.
If you already have a legal structure in place for your company, incorporating luxury riding services becomes easier and faster.
The most important factor that influences cost is acquiring the fleet to get your business on the road. You can either purchase brand new premium cars or invest in procuring well-maintained second-hand luxury cars, based on your budget. Getting a business loan is the third option. Insuring your cars should be hard-coded in your business model to avoid expensive maintenance or repairs in case of accidents or theft.
Marketing costs will depend on the promotional channels that you intend to use. Parking your vehicle in a secure premise will also involve rental expenses. Remember, the initial expenses might leave you worried, but, once business picks up, the turnover will keep you excited. The time to break even should be estimated periodically and the corrective course must follow suit if things seem to go astray.
This step is key and will determine how popular your business will become, how much turnover you will make, your profit, and your competitive edge in the market. Charging by the hour is a standard format. You could even have customized packages for regular clients or distance-based charges for one-time users. You could have weekday, weekend, and peak hour charges as well. Enforcing a ‘minimum number of hours’ can work if the demand is lesser for your services, so that, you are assured of a fixed income for a ride.
Promote Your Business
Resorting to social media marketing, bulk SMS, newspaper advertisement, and mutual-referral programs is the best bet in the luxury cars ride-hailing business. Maximize your exposure with the help of established luxury cars ride-hailing groups or an agency. Getting a mobile app to facilitate easy booking to customers is a big plus.
Taking customer feedback seriously will keep your business in the customers’ best service providers list. Rider perks like a warm towel for customers riding from the airport, a quiet mode drive for customers, complimentary drinks, a well-maintained car, and a friendly demeanor from the chauffeurs can do the trick when it comes to customer retention.
Fun promotions, discounts, and referral bonuses are some catalysts to high demand for your luxury cars ride-hailing services.
Your Team & Important Legal Considerations
Getting the most competent drivers for your luxury cars, and ensuring that they are vetted and have a valid license is important. Preferably, experienced drivers/chauffeurs must be chosen for the job to ensure a hassle-free service to each customer. They must be well-trained in communication skills, courtesy, and safety.
Start with a smaller but stronger team and slowly build a smart workforce for your luxury cars ride-hailing business.
Here’s the checklist for legal compliance:
- State Permit
- Certificate of Authority
- Vehicle Inspection Certificate
- Chauffeurs’ endorsement
- Proof of Income Tax Returns Filing
Starting a niche Uber-like ride-hailing business with luxury cars can be lucrative provided, one navigates the business processes mentioned above deftly.
Interested in more useful business ideas for your ride-hailing business? Do read our other blogs on ride-hailing services.