Taxi and Limousine Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 6,800 taxi and limousine services in the US generate revenue by charging fares for transporting passengers between locations or leasing vehicles and medallions/licenses to drivers. Legal taxi and limo companies typically require a license or “medallion” to operate within a city. The cost to acquire a medallion can be high because regulatory organizations limit the number of medallions. Local codes may also regulate fares, vehicle safety, language fluency, and driver competence. Many drivers work as independent contractors and are licensed through or rent vehicles from taxi or limousine companies.

Risk Of Crime

Taxi and limousine service providers may pick up passengers in unsafe neighborhoods, putting drivers and vehicles at risk for crime.

Highly Regulated And Limited

In major cities, the taxi and limousine services industry is highly regulated by municipal commissions and boards.

Industry size & Structure

The average taxi or limousine service works out of a single location, employs fewer than 10 workers, and generates about $3.8 million annually.

    • The taxi and limousine service industry consists of about 6,800 firms that employ about 59,000 workers and generate about $26 billion annually.
    • The industry is somewhat concentrated; the top 50 companies account for about 67% of industry revenue.
    • The majority of firms operate within a limited geographical market. Large companies include Carey Holdings, Empire CLS Worldwide Chauffeured Services, and Yellow Cab (Chicago).
                                  Industry Forecast
                                  Taxi and Limousine Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  May 17, 2024 - Moderate Sales Growth Expected
                                  • Taxi and limousine service industry sales are forecast to grow at a 6.54% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Taxi and limousine service industry employment was unchanged during the first quarter of 2024 while average wages for nonsupervisory employees decreased moderately, according to the US Bureau of Labor Statistics.
                                  • Taxi and limousine services may be negatively impacted as bankruptcy filings continue rising toward pre-pandemic levels, according to Fitch Ratings. Overall corporate bankruptcy filings increased 40% to 18,926 in 2023, normalizing from 13,481 filings in 2022, but remain around 18% below the pre-pandemic average from 2016 to 2019. Chapter 7 liquidations rose 32% year over year in 2023, while Chapter 11 reorganizations were up by 58% for the year. Higher-for-longer interest rates and approaching loan maturity walls will lead to an up-tick in high-yield and leveraged-loan defaults, including distressed debt exchanges and corporate bankruptcies, according to Fitch.
                                  • Driverless "robotaxi" services have had mixed results in expanding their coverage area. California regulators authorized Waymo in early March to expand services of its fleet of robotaxis into Los Angeles and to cities on the peninsula south of San Francisco. The expansion for Waymo comes after California authorities revoked the license of Cruise, a rival robotaxi service owned by General Motors, after determining that its driverless cars that had been transporting passengers throughout San Francisco were unsafe. A robotaxi run by Cruise ran over a pedestrian who had been hit by another vehicle driven by a human, and then pinned the pedestrian under one of its tires after coming to a stop.
                                  • Workplace occupancy, an indicator of demand for taxi and limousine service, was 51% for the seven-day period ending on April 24, down from 51.9% for the seven-day period ending on April 17, according to data gathered from swipes of access control cards in buildings with security systems provided by Kastle Systems. Occupancy has rarely hit the 50% mark since the early days of the coronavirus pandemic despite attempts by many organizations to bring employees back. The Austin, TX, metropolitan area had the highest occupancy for the seven-day period ending on April 24 at 64.9%. The San Jose, CA, metropolitan area trailed all others tracked at 39.8%.
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