Taxi business in Germany: How to start your own service

How do I set up a taxi company in Germany?

Before opening your own taxi company, you must decide on the right legal form for you and your business plan. Common possibilities for taxi companies are the UG (haftungsbeschränkt), GmbH, sole proprietorship and GbR.

Form a taxi company as a UG (haftungsbeschränkt)

The UG (haftungsbeschränkt) is a special form of a GmbH, the German form of a limited liability company (LLC). It suits founders who want to set up a taxi company with limited start-up capital. Learn here how to start your own UG.

Advantages: A UG only requires a share capital of at least €1 per shareholder. Here you can learn more about a UG formations’s notary costs and its total costs.

Liability: A UG has limited liability. That means that partners are generally only liable for the company’s assets and not for their private assets.

Form a taxi company as a GmbH.

Setting up a GmbH requires a total share capital of €25,000. Find out more about a GmbH formation’s notary fees here and its total costs here.

Advantages: The GmbH is a very popular and highly respected business form in Germany and abroad.

Liability: The shareholders do not assume any personal liability but are only liable with the company’s assets.

Set up a taxi company as a commercial trader

A sole proprietorship as a commercial trader is the simplest way to start a business in Germany. It requires straightforward registration at the trade office and has no accounting obligations. Sole traders can use a simplified method of profit and loss reporting called EÜR. The sole proprietorship is a popular choice for taxi companies.

Advantages: No capital contribution is required.

Liability: Careful, the sole proprietor is also liable for damages with his or her private assets.

Set up a taxi company as GbR (civil law partnership)

The GbR is a German civil law partnership variant in which all partners are also managing directors. You’ll set up your taxi company with at least one partner for this. Learn here how it works.

Advantages: There’s no required minimum capital, and a notary isn’t necessary.

Liability: All partners are liable with their private assets. It is recommended to use a GbR contract eben though it is not mandatory.

Requirements for setting up a taxi business

Taxi companies can only be set up with the correct permissions

In Germany, moving passengers by taxi or rental car is one of the professions that is subject to authorisation. Anyone wishing to set up a taxi company needs a permit from the relevant traffic authority. The permit is colloquially referred to as a “taxi license”. According to the German Passenger Transport Act (§13 I PBefG), it must adhere to the following conditions:

• Guarantee for safety and efficiency of operation
• Proof of reliability and harmlessness
• Proof of professional suitability
• Registered office or branch located in Germany

Tip: The processing time for a taxi licence can be several months. So take care of all the documents as early as possible. When you apply for approval, you will usually need to submit these documents:

• Technical control board certificates 💬TÜV-Dokumente for your vehicles
• Proof of available equity/reserves of at least 2,250 € for the first vehicle, 1,250 € for each additional vehicle
• Police verification certificate
• Clearance certificate from the tax office and the health insurance company
• Excerpt from the Central Traffic Register 💬Verkehrszentralregister
• Excerpt from the Central Trade Register 💬Gewerbezentralregister
• Certificate of qualification for commercial passenger transport from the IHK the German chamber of industry and commerce

Two ways to prove the professional ability to run a taxi company are explained in the following sections.

Certificate of qualification without examination by the IHK

You can also prove your professional competence without an examination by the IHK if you meet the following requirements:

• At least three years in a management position of a taxi or rental car company with the following conditions:
  • The position was held not longer than two years ago
  • Certified evidence of the position
• Renewal of an existing approval
• Existing license for a car rental business
• Completed training as a businessman or woman in railway/road traffic with a focus on passenger traffic
• Completion of further training as a transport specialist
• Received a degree in:
  • Business economics (DAV)
  • Business economics in the faculty of economics
  • BA Transport Management and Logistics, incl. major in passenger transport
  • Diploma in transport economics

The relevant IHK can invite you to an appraisal interview to test your expertise. In advance, inquire from your local Chamber of Commerce and Industry about the individual documents required and the fees involved.

Certificate of qualification with an examination by the IHK

If you don’t meet the above requirements, you must take a qualification examination by the IHK. The aptitude test usually consists of three parts: Two written exams of 60 minutes each and one oral exam of 30 minutes each. The exam costs about €150.

The subject areas of the aptitude test are:

• Legal
• Commercial and financial management
• Technical operation and execution of operations
• Road safety

Can I start a taxi company without a taxi license?

It’s possible to establish a taxi company without owning a taxi license. In this case, you are restricted to commercial activities and may not drive any persons. Nevertheless, you need a certificate of expertise.

What are the pitfalls to look out for?

The German transport authority may reject your application for authorisation, taking into account the following factors:

• Demand for taxi transport orders
• Taxi density
• Development of earnings and costs, including operating time
• Number and causes of business tasks
• The current competition (market conditions)

Existing taxi companies should not be put at risk. Approval for new applicants is generally limited to two years. For re-applicants, the current admission period is five years.

How to register a taxi company

Trade office

With valid permission from the traffic authority, you can register your taxi company. A simple registration is sufficient if you open your own business as a commercial trader.

After you register with the trade office, the tax office will automatically notify you to register for tax. As soon as the tax office reviews and checks your documents, you will receive your tax number and may issue invoices.

Entry in the commercial register

As a public register, the commercial register records all merchants in the district of a register court. Legal forms like a GmbH and UG must be entered into the commercial register as well.

Membership in the IHK

The German Chamber of Commerce (IHK) is informed by the trade office about your startup. They will contact you shortly after this. When registering a business, membership at the IHK is mandatory.

Employer liability insurance association

Employer liability insurance associations 💬Berufsgenossenschaften provide statutory social accident insurance for companies and their employees. Be sure to register at the correct trade association. Regardless of your legal form, this is a legal obligation.

For questions regarding membership, contact the statutory accident insurance 💬Deutsche Gesetzliche Unfallversicherung.

Federal associations of the taxi and rental car industry

Consider whether voluntary membership in a relevant federal association makes sense for you. In addition to numerous regional associations and clubs, there are national umbrella organisations such as the DeutscherTaxi—und Mietwagenverband e.V. or the Taxiverband Deutschland. Associations represent the interests of their members in politics, business, and the public.

Costs & financing: How much does setting up a taxi company cost?

The path to self-employment must be carefully planned and structured in every industry. Draw up a detailed business plan by calculating the acquisition and operating costs. Remember that every new company has a start-up phase in which expenses exceed income. Your business plan should include the following costs:

• Start-up costs: documents, certificates, applications, registrations
• Fees for taxi permit and certificate of expertise
• Any fees for IHK examination
• Acquisition costs of the vehicles or leasing fees
• Minimum operating capital: €2,250 for the first vehicle, €1,250 for each additional taxi
  Tax dues
• Insurance: Professional liability insurance, vehicle insurance, commercial insurance
• Technical equipment for the vehicles: navigation, taximeter, calibration
• Maintenance costs for the vehicle pool
• Fuel costs
• Any wage costs for your employed taxi drivers (learn more about payroll accounting here)
• Reserves for unforeseen events
• Reserves to secure livelihoods
• Marketing expenses
• Any fees for taxi headquarters

Marketing: How do customers find out about your taxi company?

Establishing a successful taxi company requires clever placement in a highly competitive market. As good as your financial planning is, you ultimately depend on your customers. So, how can you attract new customers?

Self-promotion

Simple advertising materials are a good start, depending on the competition at your location. Place advertising on your taxi, in your city’s telephone directories and advertising spaces. Hotel and catering businesses that order taxis for their guests are a good source of income that doesn’t cost you anything. Hospitals and medical practices are also good contacts for partnerships.

Google

In the age of smartphones, most people who want to order a taxi reach for their mobile phone or laptop and google the first taxi company near them. Make sure your company makes a legitimate impression with your website. The more you optimise your homepage for search engines, the faster potential customers find you online. Enter your location on Google Maps. You will be easily found, and your passengers can evaluate your service.

Taxi agencies & centres

Generally, there are two types of so-called taxi centres: Service providers who only place orders with taxi companies without their vehicle fleet and mergers of several taxi companies. Associations are often registered associations or registered cooperatives.

The advantage of connecting to a taxi centre is that you do not have to worry about accepting and distributing orders. Special, lucrative orders are often distributed through these agencies, such as shuttle services to airports, patient transport, or goods transport. At the same time, there are fees for membership in a central exchange, which you must consider.

Taxi apps

Many different apps now eliminate the need to call the traditional taxi headquarters. Taxi Deutschland, myTaxi, Easy Taxi and taxi.eu are just a few examples of apps that broker taxi services nationwide. Here, too, a partnership is associated with costs.

Inquire about the possibilities of cooperation and successfully start your own business.