Could Starting A Private Limo Company Be Your Ticket To Wealth?

If the boom in the private taxi business (along with reports of nearly six-figure salaries earned by private taxi drivers) has you wondering how to capitalize on this trend, you're not alone. However, breaking into a market congested with compact car drivers willing to take last-minute fares at all hours of the day and night -- or dealing with intoxicated passengers who make a mess in your personal vehicle without leaving a tip -- may be more of a burden than you're willing to bear. If you'd like the ability to exercise more discretion on the fares you choose, driving a private limousine may be a better choice. Read on to learn more about the ins and outs of driving your own limo, as well as what you'll want to consider before going into business for yourself.

What will you need to do before beginning to charge for your services?

While you're free to drive a limousine as your own private vehicle and transport friends with no special restrictions, you may need to pass an additional licensing exam before you can begin providing rides for a fee. This will provide you with a chauffeur's endorsement on your driver's license that will allow you to drive a taxi or limo for hire anywhere in your state. 

You may also want to investigate the various small business structures in your state (like a limited liability corporation (LLC), sole proprietorship, or simple (S) corporation) to determine whether there are any tax or liability advantages to incorporating as a business. When you're in an industry that requires you to spend most of your working hours behind the wheel, your risk of incurring liability is higher than that of someone who spends their day at a desk, and incorporating can help shield your personal assets from seizure if you're involved in an auto accident that injures a customer. Incorporating into a business can also allow you to deduct a variety of expenses on your income taxes, as well as allow certain income to be taxed at a lower rate than it would be if personal income.

Can you earn a profit by driving your own limousine? 

If you already own a limousine or large luxury vehicle (like a vintage Rolls Royce), renting it out can be a no-brainer. Although full-time limo drivers who don't drive their own vehicle earn only about $12 per hour, you should be able to market your own limousine and driving services for $50 to $100 or more per hour. Even after paying for gas, cleaning costs, and other necessary expenses, you'll have secured quite a profit for only a few hours' work. The supply of (and demand for) limos can vary widely based on area, so drivers in rural areas may not be able to earn enough to stop working a full-time job -- but driving your own limo should be profitable even if you only take on a few fares per year.

For those who want to purchase a limousine and begin renting it out, the profit calculation can be tougher. Purchasing a new limo can cost you $60,000 or more, and a used limo may require more maintenance or repairs than you're accustomed to paying for your primary vehicle. While you'll still be able to command a high hourly rate by driving your own limo, you may find that adding a car payment to your other overhead expenses prevents you from collecting much of a profit. You'll probably want to meet with a financial planner to help accurately calculate the other expenses you'll be deducting from your hourly rate to determine whether purchasing a limo would be a good investment. 

For more information on limousine rates, check out what other companies, such as A Prestige Limousine, are charging.