How to Start a Shuttle Service – 10 Essential Steps to Follow in 2023

Recent trends show that this is currently the prime time to start your own shuttle business as it is seeing significant industry growth. According to Forbes, air travel has been spiking to pre-pandemic levels. This creates room for new shuttle businesses to enter the market. 

While this sounds like an opportunity ripe for the taking, it is important to fully understand how to start a shuttle service before you invest heavily in it. You must not only learn how to start it but also learn the challenges faced by any existing shuttle service to succeed.

In this blog, you will not only learn how to start your own shuttle business but also see the ways in which you can stand out from the competition for better profits. This way you will be equipped to deal with any difficulties that may arise in your entrepreneurial journey.

10 Steps to Start your Shuttle Service

The 10 simple steps to start your own shuttle service business have been laid out in order of progression for you to follow easily. These steps cover all the major steps including some intricacies that are native to the transportation industry for your better comprehension.  

1. Research your local market

Knowing your local market in-depth can give you insights into new or existing business opportunities that you could take advantage of. It will also give you a look into your limitations when running a business in the area. 

You must analyze if your local area can make use of a shuttle business or not to start your business. You must also realize that there are other types of shuttle services that are not an airport shuttle business. Conducting research will tell you what kind of shuttle service to operate.

2. Pick your niche 

If your locality has a saturated market of airport shuttle businesses, then you might want to look into picking a niche catering to other businesses. The other business that can take advantage of your services are places that have a lot of visitors that need transportation.

These businesses include hotels, parks, malls, zoos, and more. As a shuttle business owner, you can also choose to offer your clients either a scheduled shuttle service or an on-demand service. Depending on what you choose to offer, you will be charging different rates.

Either option can make a profitable shuttle service though it is important to realize your limitations and choose accordingly. Most transportation services opt to run on a shuttle schedule to maintain a consistent and predictable income.

3. Analyze the startup costs

Depending on your client’s needs and your scale, the startup costs can vary greatly. This is why you must first understand who you are catering to and how big you want your business to be. It is best to start a tour shuttle transportation service with as few resources as possible. 

It is better to first establish a client base and then expand instead of going into debt with a large fleet of drivers without a bunch of clients. The shuttle transportation business is not one that is particularly affordable, especially if you are starting an airport shuttle service. 

4. Register your business

To legally operate your own business you need to first register it as a legal business entity. A Limited Liability Company (LLC) is how many shuttle businesses choose to register their business. But the way you want to register your business is completely up to you.

You can register your business as a sole proprietorship too if you so desire. The best way to know what form of registration is best for you, you should get your business structure clear. This way you will be able to compare all registrations and make the most informed choice.

5. Keep your vehicles ready

The selection of motor vehicles in your fleet matters a lot as they are literally your source of income. Everything from customer comfort to business operation efficiency depends on the vehicle that you choose. The ideal option would be a vehicle that is an absolute all-rounder.

One such vehicle is the humble minivan. Not only does it have the passenger capacity and the creature comforts of a giant SUV, but it also has the fuel efficiency of a regular sedan. It is also pretty good for other applications such as towing or hypermiling.

Though you also need to pay attention to the terrain that you’re working on. Minivans are not the best suited for off-road activities and snow applications. Remember that your customer’s comfort and convenience are the top priority when choosing a vehicle. 

6. Hire experienced staff

Your staff is the primary link of contact between you and your clients. This is why you must ensure that they are not only well-trained but also highly professional in their dealings. If your shuttle drivers are not cordial or skilled, it will lead to a bad impression in your client’s minds.

Hire experienced staff to start a shuttle service

Existing shuttle services make sure to hire the best drivers and staff to look over their clients because they realize how important customer satisfaction is. You must do the same and be very diligent during the entirety of your hiring process for any staff member.

You must also ensure that your drivers have a commercial driver’s license to be able to legally operate the vehicle under commercial driving regulations. You might want to have multiple drivers typically work at your business to always have backups in place to cover shifts.

7. Acquire sufficient insurance

In the event of any mishap or accident, having insurance is truly a lifesaver. Because a shuttle service business is transporting customers regularly it is crucial for them to have insurance. For most shuttle businesses, general liability insurance would be a good place to start.

Each and every state has its own transportation laws that dictate what insurance you will require to operate your business. Though it is better to have a commercial insurance agent decide what is best for your business to avoid paying out of pocket for any mishap as much as possible.

8. Market your business locally

You cannot possibly expect to have any customers if they don’t even know about your existence. This is why a well-thought-out marketing campaign for your shuttle service is so important to gain new clients from various fields.

While it is important to market your services online, it is equally important to market them well to the local industries that might be able to utilize your services. Marketing shuttle services offline are usually more effective as they are direct and have a greater impact on the target audience.

9. Diversify services

Unless you are the industry leader, it is going to take a lot more than marketing to beat your competitors. To combat their competitors, businesses usually think of lowering costs to gain an edge. Though this trick does not work with a shuttle business as the cost is hard to reduce.

Though you could always hire additional drivers to offer more diverse services to your customers. These additional services can be anything from specialized tours to smaller-capacity car trips. Any extra service you offer separates you from your competitors.

10. Utilize a go-to route planner

A route planner can help you cut costs, reach your destinations faster, dispatch routes easily, and deliver a better experience to your customers. Basically, everything that a shuttle business has to stress over is made easier by a route planner.

With a route planner, your service routes are dramatically shorter, allowing you to not only save time traveling but also running costs. You can also craft such routes within minutes instead of hours taken by manual processing. The challenge is finding the right route planner for yourself.

upper-route-planner

Upper Route Planner

A simple-to-use route planner
that every one is talking about

Why Starting a Shuttle Service is a Good Idea?

With the transportation business industry getting back on its feet, you can easily capitalize and start your own shuttle service and capture the market. Even if you are not into the airport shuttle business there are plenty of other alternative shuttle services that you could easily start.

The business plan of a shuttle service is also quite simple and straightforward allowing you to not dedicate months of planning to start it. Many individuals have also started their transportation business solo by using their own vehicles to transport clients.

It is also exceptionally easy to expand as you basically only have to hire more drivers and get more contracts to do so. This inherent simplicity combined with the current market situation makes for a spectacular opportunity for new entrepreneurs to start a shuttle service.

Reasons Why Shuttle Services may Fail

1. High upfront investment

As previously stated, the shuttle business is not one that is highly affordable to enter. This is why many people choose not to delve into the shuttle business. Even if they are able to somehow deal with the start-up expenses, it is still difficult to cover running costs.

Even for a relatively short time period, running a shuttle business can be expensive as you have to pay for the gas and maintenance costs of your fleet. While you could learn to save money on gas, it is still an inevitable cost that you will have to pay when operating your business. 

2. Lack of demand in most areas

The shuttle business is one that is inherently reserved for a small customer base. Some areas might not have the guest traffic required to justify a dedicated shuttle service. Despite the novelty of having shuttle services, most businesses outright cannot afford them.

Without existing demand, any business is going to have a hard time making any sort of profit.  Low demand affects airport shuttles the worst as the market is highly saturated with existing shuttle services dominating the field.

3. High competition 

The competitive nature of the shuttle industry makes it very difficult for new businesses to enter the market. This is due to the limited amount of demand seen in most markets around the world. This is why existing shuttle services fight tooth and nail to get any new contract.

It is also difficult for any business to hand over a contract to a new business when compared to a  business with a healthy reputation. This is why many that enter the market by starting their shuttle service eventually drop out and abandon the industry.

4. Migration to other fields

Most airport shuttle services leave their native industry in favor of other shuttle fields or transportation fields. This is again due to the high competition among airport shuttle services. Because airports are already limited around the world, getting contracts becomes even more difficult.

Though with their fleet they can take up contracts from the local school board, hospitals, and taxi services. Such fleet owners often find these alternative opportunities easier and more lucrative and thus abandon the airport shuttle industry. 

5. Poor customer service

One crucial element of a shuttle business is customer satisfaction. A customer being happy relies on several factors that are arbitrary and confusing. Though there are some aspects of customer service that a shuttle service can target to gain a better opinion from customers.

Poor customer service

One such aspect is the time of arrival. If shuttle customers can agree on anything it is the fact that long travel times are very annoying and ruin the experience. If only shuttle services had the perfect routes to follow, they would be on time every single day.

Get Perfectly Planned Shuttle Routes on Upper for your Shuttle Service

When you run a shuttle service you know that arriving on time is of paramount importance. Though as many owners and dispatchers know, planning the perfect route for any service is a stressful and mentally laborious task. 

This is why Upper brings you the perfect solution to your route planning issues. With Upper’s unparalleled features such as route planning, you can potentially save hours every day. This is great news for any business that has seen the complexities of route planning and optimization.

When you let Upper handle your route planning, you not only save hours of work but also get the best routes for your business. This lets you single handedly boost customer satisfaction, save time on planning, and save costs on fuel.

Get Rid of Late Arrivals Using Efficient Routes

Find the optimized routes for your trips in less than a minute using Upper’s automated processes from Upper. Switch to Upper and forget late arrivals once and for all.

FAQs

Usually, for an airport shuttle business, buses work the best as they are very economical and have a large passenger capacity. Though other shuttle services prefer using hatchbacks and minivans as they offer more versatility and utility.

Depending on your plans and circumstances the price to start a shuttle service can almost be nothing or be very expensive. This is because it all depends on how big you want your fleet to be and how much existing equipment you own. Though generally the cost to start a shuttle service is usually around $50,000.

The best way to price your shuttle service is by conducting rounds of competitor analysis. Not only does analyzing your competitors let you know how they offer their services, but it also lets you price your shuttle service more competitively.

Dropoff

There is no doubt that starting a shuttle service on your own is an expensive and difficult task. With rising competition and fewer costs, many previous shuttle businesses have given up hope. Though all is not lost as there are still individuals that make it through the struggle.

People have started their shuttle business with nothing more than a tiny hatchback and have grown it into a large business that spans over states. If you are able to understand the requirements and responsibilities expected from a shuttle service then you should be successful.

Though regardless of how good you are, you will always need the help of software like Upper that can save you time and money in this line of work. Plus, you can improve the efficiency  using advanced software. Start with our 7-day free trial.

Author Bio
Rakesh Patel
Rakesh Patel

Rakesh Patel is the founder and CEO of Upper Route Planner. A subject matter expert in building simple solutions for day-to-day problems, Rakesh has been involved in technology for 30+ years. Looking to help delivery businesses eliminate on-field delivery challenges, Rakesh started Upper Route Planner with the ultimate goal of simplistic operations in mind.

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