Thinking of Buying a Taxi Business in Australia? Here Are 3 Vital Questions to Ask

Australia’s taxi and limousine transport industry is valued at $2.8 billion in 2025, employing more than 44,000 people across 35,800 enterprises.

Profit margins sit at an average of 18.9%, although real earnings have declined due to rising fuel costs, rideshare competition, and regulatory reforms. After falling sharply during the pandemic, the sector is forecast to recover modestly at 3.1% annual growth through 2030, reaching around $3.3 billion in revenue.

Recovery is being driven by stronger tourism, increased airport travel, and new workplace mobility patterns. However, competition from rideshare platforms such as Uber and DiDi, alongside high vehicle and fuel costs, continues to suppress margins for traditional taxi operators.

1. Is the Business Financially Sustainable and Profitable?

Why It Matters:

Taxi operations are capital-intensive and sensitive to market shifts, fuel costs, and driver availability. Profitability depends on efficient fleet management, strong customer networks, and adaptability to technological disruption.

What to Check:

• Profit margins and costs – The industry average is 18.9%, but fuel and maintenance remain volatile, with rising petrol prices significantly impacting operators’ expenses since 2021.

• Revenue sources – Around 37% of revenue comes from booked taxi services, while non-booked rank-and-hail services continue to decline due to rideshare competition.

• Licensing and asset value – Deregulation in Victoria (2016) and NSW (2021) sharply reduced the scarcity value of taxi licences, impacting resale prices and asset-based valuations.

• Fleet and driver structure – Many operators now rely on independent drivers under ABNs to reduce wage overheads and increase flexibility. Businesses with modern vehicles and fuel-efficient fleets typically perform better.

2. How Competitive Is the Business’s Market Position?

Why It Matters:

Rideshare disruption and deregulation have intensified competition. While demand for taxis remains steady among older consumers, tourists, and business travellers, maintaining relevance requires differentiation through service quality and convenience.

What to Check:

• Market concentration – The sector is fragmented, with the largest player, A2B Australia (Cabcharge/13Cabs), holding just 6.8% of market share.

• Geographic focus – Victoria and New South Wales account for more than 65% of all taxi businesses, benefiting from high-density urban demand and airport traffic.

• Booking systems – Consumers now prefer app-based services offering transparent fares and GPS tracking. Operators aligned with major booking platforms such as 13Cabs or Silvertop have a significant advantage.

• Regulatory compliance – Maintaining alignment with the Point-to-Point Transport (Taxis and Hire Vehicles) Act 2016 and related safety standards ensures ongoing licence validity and access to government incentive programs for accessible taxis.

3. Is the Business Aligned with Industry Trends and Future Growth?

Why It Matters:

Future growth will be shaped by evolving regulations, technology adoption, and shifting consumer behaviour. Businesses that modernise operations and adapt to hybrid booking models can capture renewed demand.

What to Check:

• Tourism recovery – As international travel rebounds, airport and tourism-related trips are projected to grow 3.6% annually through 2031, strengthening demand for urban taxi services.

• Technology integration – The rise of AI-driven dispatch systems, automated fare management, and fleet-tracking technology enhances efficiency and customer satisfaction.

• Accessibility services – Demand for wheelchair-accessible taxis is supported by government funding and NDIS subsidies, creating growth opportunities for inclusive operators.

• Workforce reforms – The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 will increase pay conditions for contractor drivers, affecting cost structures but improving driver retention.

Ready to Invest in a Thriving Taxi Business?

With steady demand from tourists, corporate travellers, and older demographics, the taxi industry continues to hold long-term potential.

Success depends on cost control, digital booking integration, and maintaining reliable service in an increasingly competitive mobility market.

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