Taxi

Industry data

By the end of 2003, there were approximately 15,800 active taxis in Israel- roughly 2.4 taxis per 1,000 people. Over the last 6 years, the ratio of taxi per population has increased by 25%.

The average number of kilometers driven by a taxi per year is 88,000.

 

Industry Sub-division

  • Intercity and inner city service cabs- these taxis are active on a regular route, travel price is usually set by the Ministry of Transport. In many cases, this type of taxi is active on routes similar to bus routes, and charges a similar rate.
  • Special taxi service- destination is determined according to customer request. There are two types of special service taxis: those associated with a taxi station, and those working independently, picking up passengers while driving unsystematic routes.

 

Market Characteristics

  • The taxi industry is standardized by regulations and ordinances.
  • The industry is highly competitive.
  •  “Green numbers” are tradable: the number is a transferable, sellable, and lease-able asset.

 

Customers: Defining the Target Market and its Size, Market segmenting

Taxi passengers are private customers, locals and tourists, in need of transportation services, in addition to companies or organizations using taxi services for employee transportation.

 

Competition

The industry is highly competitive, mainly due to a surplus in transportation services, the decrease in tourism and the increase in taxicabs.

  • Main competition consists of other stations and taxis acting in the same geographical vicinity.
  • In the service taxi industry: busses active on a similar route and other taxis active on the same route.
  • Unlicensed drivers providing alternative transportation services.
  • Minibus transportation companies stand in competition for tourist and employee transportation.

 

Marketing resources

Typical marketing resources in the branch include: “yellow pages”, local print advertisement, prominently displaying a flag with the taxi station’s name and number on the taxi, service taxis adhering to bus routes, and internet sites allowing online taxi calls.

 

 

Factors Affecting Success:

Association with a reputable taxicab station, optimal use of vehicles and human resources, adhering to high demand routes with relatively low bus activity, activity in areas with relatively high demand for taxi services.

 

Entry Barriers:

A taxi driver license is required, initial investment in purchase of a “green number”, and vehicle acquirement.

 

 

Funding:

Required Investment

  • Purchase of a “green number”- cost of taxi licensing fee for a taxi driver with no experience is approximately 160 thousand NIS and approximately 130 thousand NIS for a taxi driver with 6 or more years of experience.
  • Vehicle purchase- vehicles used as taxis are sold tax-free. Expenditure varies according to model.

 

Typical Terms of Payment

Customers usually pay in cash, although some taxicabs allow credit card payments. Companies and organizations normally conduct monthly bill payments.

 

Licenses and Certifications:

  • In order to operate a passenger taxi, a driver’s license is required in addition to the successful completion and certification of a Ministry of Transportation taxi driver course (course length is roughly a month). In order to operate service line taxis, successful completion and certification of Ministry of Transportation minibus driver course is also required in addition to the requirements noted above.
  • A license (known as a “green number”) is required in order to own a taxi; requests are to be submitted to the taxi committee, listed below under “relevant addresses”.
  • Driver behavior requirements and various rates may be viewed online at Ministry of Transportation site.

 

Insurances:

  • Vehicle insurances: mandatory insurance, third party insurance, and comprehensive insurance. The insured amount may be extended by increasing the premium.
  • Loss of income insurance.

In addition to the above, an insurance agent should be consulted in regards to the need for additional insurance.

 

 

Relevant Addresses:

Ministry of Transportation, Taxi Committee, 5 Bank Israel Street, Jerusalem. Phone: 02-6663155/6. URL for Ministry of Transportation site: www.mot.gov.il.

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