How to Start a Shuttle Service – 10 Essential Steps to Follow in 2024

The global number of public transport users is projected to reach a whopping 4.49 billion, higher than the pre-pandemic count of 4.11.

It indicates that worldwide public transport is set to witness a relentless surge in the years ahead. Forbes’ research reveals that air travel has been spiking to pre-pandemic levels. 

All these findings make one thing clear: these times offer a promising opportunity to cash in on the rising demands for large-capacity vehicles for daily commutes, i.e. shuttle service.

If this intrigues you enough to learn how to start a shuttle service company, this blog is for you. It not only serves as your go-to guide to starting your shuttle service business but also overcoming the potential challenges in this industry. So, let’s get you started on your entrepreneurial journey to becoming a successful shuttle service.

10 Steps to Start your Shuttle Service

The 10 simple steps to start your own shuttle service company 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 make you aware of the limitations when running a business in the shuttle service area. 

There are other shuttle service business models, such as tour operators or corporate taxi services. So, conducting research on your local area is also vital to determine which type of shuttle service is in high demand and then proceed with operating it.

2. Pick your niche 

If your locality has a saturated market for airport shuttles, you might want to consider picking an alternative niche to distinguish yourself. 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 taxi service or an on-demand service. Using shuttle business route scheduling software, you can efficiently manage your routes and bookings, whether they are scheduled or on-demand.

3. Analyze your startup costs

Depending on your client’s needs and your scale, your 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 recommended that a tour shuttle transportation service be started with as few resources as possible. 

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

4. Register your business

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

You can register your business as a sole proprietorship also if you want. The best way to know what form of registration is best for you is to get your business structure clear. Thus, you can compare all registrations and make an informed choice. Obtaining a business license like multi-passenger permit is also crucial for legal compliance.

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 an absolute all-rounder.

One such vehicle is the humble minivan. It has an adequate passenger capacity, the creature comforts of a giant SUV, and the fuel efficiency of a regular sedan. It is also pretty good for other applications like towing or hypermiling. Considering your terrain type and vehicle parking space is also integral to choosing your vehicle type.

6. Hire experienced staff

Your staff is the primary link of contact between you and your clients. So, you must ensure that they are not only well-trained but also highly professional, cordial, or skilled. They should even know how to deal with difficult customers. If your shuttle drivers lack these skills, it can leave a bad impression on your clients and even a loss of business.

So, it is indispensable to hire your delivery drivers or staff members diligently. You should also make sure your drivers have a commercial driver’s license to operate the vehicle legally under commercial driving regulations. Having multiple drivers is also a good idea to have backups when required.

7. Acquire sufficient insurance

In the event of any mishap or accident, having insurance is truly a lifesaver. This is because a shuttle service business transports customers regularly, making it 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. Therefore, 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 where a meticulous marketing plan 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 pivotal 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 market or audience.

9. Diversify services

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

However, you could always hire additional drivers to offer more diverse services to your customers. These additional services can be anything from commuter and tourism packages to smaller-capacity car trips. Any extra service you offer that separates you from your competitors can work well.

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 customer experience. Basically, everything that a shuttle business has to stress over is made easier by a route planner.

With a route planner integrated with your bus/tour/airport shuttle service app, your service routes are dramatically shorter, enabling you to save not only transit time but also operating costs. You can also craft these routes in minutes instead of hours in manual processing.

Why is Starting a Shuttle Service Good Idea?

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

The business plan of a shuttle service company is also quite simple and straightforward, allowing you to start it without dedicating months of planning. 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.

5 Reasons Why Shuttle Services may Fail

1. High upfront investment

As previously stated, the shuttle business is not highly affordable. Hence, many people choose not to enter it. Even if they are able to cover the start-up expenses, it becomes difficult to cover the running costs.

Even for a relatively shorter period, running a shuttle business can be expensive as you have to pay for your fleet’s gas and maintenance costs. 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 inherently reserved for a small customer base. Some areas might not have the guest traffic required to justify a dedicated shuttle service company. Despite the novelty of having shuttle services, most businesses cannot afford them.

Without existing demand, anyone may find it difficult to make a profitable business. 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.

However, with their fleet, they can take up contracts from the local school board, hospitals, and any regional taxi service. 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’s happiness relies on several arbitrary and confusing factors. However, a shuttle service can target some aspects of customer service to improve its customers’ opinions.

One such aspect is the time of arrival for pick up. If shuttle customers can agree on anything, it is because 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 day.

Get Perfectly Planned Shuttle Routes on Upper for your Shuttle Service

There can be no better time than now to venture into the shuttle service industry. When you run a shuttle service, you know that arriving on time is of paramount importance. However, as many owners and dispatchers know, planning the perfect route for any service is a stressful and mentally laborious task. 

This is where you can implement advanced route planner software to not only plan your shuttle routes but also optimize them based on traffic, priorities, and drivers’ working hours. So, it is high time you implement the best route optimization software and boost your shuttle service efficiency and productivity.

Shuttle Service: The Future of Public Transit

Starting a shuttle service is undeniably an expensive and arduous task. With rising competition and fewer costs, shuttle businesses are struggling to stand out and ensure a profitable shuttle service.

However, if you have the right mindset, business acumen, and a clear understanding of how you can set yourselves apart, you are sure to succeed. Equipping yourself with advanced technologies like an advanced route optimizer software can help you outshine and grow your own shuttle service business easily and speedily.