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 7,800 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 about 6-7 workers and generates about $2.8 million annually.
- The taxi and limousine service industry consists of about 7,800 firms that employ about 51,600 workers and generate about $22 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
Recent Developments
Mar 4, 2023 - Gas Price Decrease may Be Temporary
- The US price of gasoline averaged about $3.40 per gallon in February, according to GasBuddy. That's down 6% year over year, but up 2% from January. Price decreases may be temporary as gasoline usage is seasonal and typically rebounds during the spring and summer months. Analysts also note that China is in recovery mode from its COVID-19 lockdowns, and some analysts expect the cost for oil and refined products to increase as that economy ramps up its energy consumption. GasBuddy petroleum analyst Patrick De Haan says that prices could exceed $4 per gallon by April.
- Driverless taxi services are launching in more cities. Ride-hailing giant Lyft and autonomous vehicle technology company Argo AI are now officially offering public robotaxi service in Austin, TX, and Miami, FL. Autonomous taxi service Zoox, which was bought by Amazon in 2020, has an undisclosed number of self-driving Toyota Highlanders operating in Seattle, WA. General Motors' self-driving technology unit Cruise sait in September that it plans to expand its driverless ride service to include Phoenix, Arizona, and Austin, Texas, in 90 days. Waymo, the autonomous vehicle developer under Alphabet, has vehicles operating in San Francisco and Phoenix. Local taxi services may be negatively impacted by large-scale deployments from global auto and technology giants.
- A forthcoming proposed rule from the Biden administration will require public companies and contractors supplying goods and services to the federal government to disclose greenhouse gas (GHG) emissions and other climate-related risks. Limousine services serving as contractors to government agencies are likely to be impacted. The rule follows similar requirements proposed by the Securities and Exchange Commission (SEC) related to the disclosure of climate change risks. Federal contractors are advised by industry experts to devise and execute procedures to document and track GHG emissions information both companywide and those attributable to specific procurement contracts.
- Workplace occupancy, an indicator of demand for taxi and limousine service, was 50.1% for the seven-day period ending on February 22, up from 49.8% for the seven-day period ending on February 15, and 48.6% for the seven-day period ending on February 8, 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 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 February 22 at 66.4%. The San Jose, CA, metropolitan area trailed all others tracked at 41.2%.
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