Looking for more information? Search this blog

Tuesday, September 1, 2015

How to Start and Run a Profitable Car Hire and City wide Cab Service in Nigeria


There is a growing demand for car hire service whether for airport shuttle (pick up and drop off) or intra city car hire by visiting businessmen, executives or tourists within a city such as say Abuja or Lagos which are key destinations for business travellers to Nigeria. The Car hire service can be classified both under transport and tourism sectors of the Nigerian economy because of the very nature the services are delivered and to the target market which are mostly foreigners on visits to Nigeria.

The Market and Opportunity
The market for car hire service is quite huge worth over N7 billion in sales (based on my own research) and is very flexible as you can combine several related ventures with your business enabling you have more than one source of income.  It is hard to compute figures for this market but according to a report monitored on Leadership Newspaper about 5% of Nigerian business travellers use car hire services whereas not less than 360,000 people visit Nigeria annually for business and most of them have a budget to cover their stay while here in Nigeria. Part of that budget would go into airport shuttle service and car hire which many hotels have taken advantage of. Once you arrive in Nigeria as a visitor and have booked a hotel to stay in, naturally you’d enquire about cab services within the city you’re visiting but not all hotels can provide this service and even those who can may charge much or may want to focus on providing core hotel services that they’ll rather outsource the service to more competent companies. That is where you come in as a savvy business person.

The Car Hire Industry in Nigeria – Regulators, Operators and Associations
The main operators in this business airport shuttle service, car hire and cab services who on behalf of clients provide mobility and convenience to tourists and business travellers within key cities in Nigeria. One of the requirements for anyone intending on doing this business is registration with relevant government regulatory agencies such as Federal Airport Authority of Nigeria (FAAN) for airport shuttle. If you want to operate a cab service you need to be registered with the regulatory state government agency for intra city transport and that varies from state to state within Nigeria. It is also advisable to join the Taxi Drivers and Cab Operators Association within your resident state. Alternatively you may want to instead partner with reliable taxi drivers to provide this service instead of operating a taxi yourself. 

Some Challenges in Car Hire Business
  • Armed Robberies and Car theft – there have been reported cases of armed robbers holding car hire and cab operators hostage while they perpetrate their crimes within Abuja for instance. Although these are isolated cases they have a way of preventing the business from running smoothly whenever they occur plus your company's reputation may take a hit if your clients are unlucky to be robbed while using your service.
  • Bad Roads - this can affect your efficiency and cause some inconveniences for your clients 
  • Uncooperative customers - Some customers are very difficult to work with. They might make unrealistic demands or set unreasonable targets for you to meet.
  • Dishonest employees - some may go behind your back by giving out their own numbers instead of the company's number to potential clients and pocket the money they receive from such clients without informing the company.

Startup Costs
  • Fairly Used Salon Car (preferably Toyota, Nissan or Peugeout 2008 model or later) – N1,300,000
  • Office Space – N400,000
  • Furniture – N100,000
  • Marketing – N300,000
  • Other expenses (including car tracking, insurance, operational costs etc) - N600,000
  • Total – N2,700,000
The payback period is less than 1 year depending on how quickly you handle your sales efforts.


Do you wish to set up a car hire service in Nigeria and need a professionally written plan you can take to the bank or show investors? I can write you such a plan. Just give me a call: 0803 206 4106 or email me: paulonwueme@gmail.com

No comments:

Post a Comment