A Fair fare/tips only taxi service

What is the name of your state (only U.S. law)? Florida

Hello, I am interested in starting a non-profit (and/or) charity organization that, among other things, would offer taxi services for a "fair fare" i.e: tips only. I briefly searched to see if anyone else asked this question and found: https://forum.freeadvice.com/starting-operating-business-3/starting-non-profit-nebraska-wyoming-337132.html but this had no replies.

Would such an entity/model generally be expected to follow the same regulations and obtain the same licensing as commercial/for-profit taxi/car-for-hire services do? What might allow such a model to operate without such licensing, if at all? Can the route distance/time calculate a 'suggested' tip (we're talking $1/mile at the most) as a guide only for riders and still fall under the same non-profit category? Or perhaps offer the service entirely for free, and cover operating expenses through "separate" fundraising activities?

Thanks for the help!

The issue with regulation TAXI service isn't so much whether you have profit motive or not, but that of public safety, impact on the munincipal infrastructure, and consumer protection. I would expect that NOT only would you be required to meet the licensing, inspection, insurance requirements of traditional operators, but you may be enjoined from setting up a non-standard fee structure.

Where are these "tips" going?

Hm, that is understandable. The "tips" would obviously be used to cover operating expenses: gas, maintenance, and yes, labor.

Would it make a difference if all rides were pre-scheduled ahead of time (as in via the internet?) I obviously would stay away from taxi lines, and major pickup locations like airports unless, like I said, it was specifically prearranged.

Also, what about the last statement I made? What if the service itself was provided for free - and the organization supported itself through "separate" fundraising activities?

Do you think any of those things would change those licensing expectations?

If not, who do I have to complain to in order to convince them otherwise? lol

I mean, damn, I'm not trying to endanger anyone, or fill my own pockets with all kinds of money that a $0.50/mile donation would offer (about $0.20 more than gas itself would cost) ... I would feel far more unsafe in a cab that has been operating for lengthy hours in the middle of the night just to cover their outrageous leasing fees.

One last thing, how is this idea different from a "private carpool" service like Zimride? Splitting the cost of driving a particular route seems itself motivated at least partially by profit, no?

I drove a cab for a few months many years ago. If you are going to rely exclusively on tips for income, don't plan on staying in business very long. Also, many places that have taxi licensing have a set fair schedule that must be followed. You may run into other issues such as a limited number of available taxi licenses, limits on the make and types of vehicles you can use and special insurance requirements. You should contact your local taxi licensing entity to see if your idea is even plausible.

If the driver is keeping the tips as wages, I guarantee you'll have a problem. This isn't a charity, just an attempt to bypass the normal licensing and public safety restrictions. They tend to be regional based down in Florida, so you'll have to contact the local commissions that handle that wherever you are. I don't think they're going to be too receptive to the idea though.

I'm curious why you think they wouldn't be receptive to the idea or that dividing some portion of the donations given as a "wage" would represent a problem? Many non-profits and/or charities have employees earning a wage - it usually is not much, but it can and often is more than just volunteers, no? Also please understand that I'm not trying to avoid licensing especially where it is instituted to protect consumers and public safety. I understand that vehicle inspections, driver certifications, and insurance is a good idea and therefore I understand how the local government might have an interest in ensuring that the rules are followed. I believe my question is to what extent those rules would necessarily apply to this idea - I obviously do not have or expect to make the money many areas charge to operate a conventional service. Perhaps that makes it implausible without substantial initial funding, but I would hope not - after all, I am simply trying to offer a very affordable (free!) alternative to the taxi industry as it exists today.

I take issue with the determination that following those rules also means I must use the same fare schedule as everyone else - I'm not charging a "fare" - the service is free. I personally think, and yes hope, that most riders would be receptive to the idea enough to make it marginally profitable for myself and anyone else it would happen to bring along as it progresses. I have researched the local taxi regulation authorities in a couple of local counties here in Florida and the only stipulation I can find on any kind of fare schedule is a maximum amount per mile that may be charged - if the cab wants to charge less or nothing, that's their business - is my understanding. So, as long as the total amount received by a driver amounts to no more than the schedule set by the regional authority there should be no issues... do you have a reason to believe this would be different?

From the last post, do you think a driver using a platform like Zimride.com would possibly be subject to rules governing taxi service considering that money IS being exchanged for rides?

Thanks for the help and discussion!

I already told you why. And stop lying. You're not operating a charity. You are attempting to bypass calling it a business by referring to your fares as tips. That's not going to fly.

You can weasel word it all you want, but the answer is that if you TAKE MONEY you are operating an illegal carriage service.

Look, I'm sorry we can't tell you what you want to hear, but we're constrained by reality.

Zimride dodges this on a couple of ways. FIrst, they do not hold out to the public as you are. To participate you need to be in a common pool (currently revolving around colleges).
Second, the person driving is going to make the trip anyhow and is just getting seat sharing available.

Because much of licensing is to ensure that taxis are not only safe and economical but available.

if you undercut the other taxi services out there - which is exactly what you are trying to do - the OTHER taxi services will go out of business...
because even if they follow your model it means that all taxi services will competitively price themselves into the ground.

Which means you won't be granted a license to operate in any major city that relies on tourist money...

Yup... what you are trying to do is bypass the structure in place. That won't be allowed to happen.

One other part... you cannot have people working for you without paying them at least minimum wage. How are you going to manage that part??? Or were you thinking that your "tip only" practice would allow you to bypass labor law as well?

By the way... you haven't even figured out the best part.

The shelf life of your little idea is less than 2 weeks. Why?

Because every single taxi driver in the city will use your "free" service every single day for every errand, trip and joyride they can think of.

All without leaving a PENNY in tip.

They will abuse your largess until you go out of business.... and your "volunteers" leave you.

It will be fun for the first couple of weeks... and then your drivers will sue you for not being paid at least minimum wage and then you sell your stuff.. etc.

How am I lying? I'm neither lying to myself or to anyone else and I'm not delusional about what I'm trying to do. My understanding of a fare is "The money a passenger on public transportation has to pay." The service I would like to offer requires no such thing. Would I accept donations from riders or otherwise? Sure. Unfortunately nothing in the world, especially something with as many costs as a carriage service, is entirely free- and so I would have to find some way to pay the bills. But to call me a liar and suggest any GRATUITY paid to me is in fact a FARE is bull**** to say the least. I'm not trying to get "the answer I want to hear" - I'm simply trying to create a conversation about a topic I personally care about and TRY to find a way to implement it the right way.

Further, If I really wanted to operate the service ILLEGALLY I would be doing it now without bothering to ask you or anyone else how to do it legally. I would love for this to have some longevity and make a considerable difference in the world - I obviously won't be doing that if drivers cannot pay their bills or the business cannot pay it's bills. If the only way to do it legally is to pay the outrageous fees and licensing and abide by the exact same regulations the conventional companies must abide by, so be it. It just means I will have to put it on hold until the funding is available to make this particular dream a reality.

Wow.. I'm not trying to bypass anything. I understand labor law, minimum wages, and so on. What about the cabbies who barely make minimum wage as it is because of the leasing and gas costs that they are responsible for? You are probably right that challenging the bigger corporations won't be allowed - so much for a free country, huh? I'm just trying to challenge a business model that seems to alienate individuals and fill a badly needed niche by implementing something (LEGALLY) that would promote a common good- everyone needs cheap/free access to convenient transportation...social/urban mobility is an important aspect of the standard of living we pride ourselves in supporting and having.

I would suggest that means my thought process IS in fact grounded in reality. No, the answer isn't what I wanted to hear but that is life and sometimes life on this planet is ****ty- It's a little sad it's only that way because of the way we have made it ... perhaps we should stop fighting each other and work to change that.

Thanks for your time- I'm sorry to have bothered you.

lol. I'm sure people, especially other taxi drivers, would love to abuse my services until it drove me out of business. That doesn't mean you cannot put mechanisms into place to mitigate that risk. Call me naive, but I still believe in the good inherent in humanity. With that being said, you would deter people from consistently using your service without leaving any tip. I don't believe I wouldn't be able to refuse rides to people like that, either...

But for a lesson in this humanity, I suggest you look up, read about, and watch the few videos available on the Internet about the FREE restaurants that have been popping up around the country: One of them is a replica of Panera Bread - run by the "Panera Cares" foundation and so far, 2 years later, it has been a rather large success. I hope, if not myself, we can find it in ourselves to do more things like this and change the way we do business fundamentally for the better

icmp said:

lol. I'm sure people, especially other taxi drivers, would love to abuse my services until it drove me out of business. That doesn't mean you cannot put mechanisms into place to mitigate that risk. Call me naive, but I still believe in the good inherent in humanity. With that being said, you would deter people from consistently using your service without leaving any tip. I don't believe I wouldn't be able to refuse rides to people like that, either...

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And just that easily, you have proven that your idea won't work.

If your services are truly free and without any obligation to tip, you CANNOT bar those people that don't tip.

Otherwise, you are demanding payment for your services or your services won't be available.

You are trying to run a taxi service on the honor system. It won't work.

But for a lesson in this humanity, I suggest you look up, read about, and watch the few videos available on the Internet about the FREE restaurants that have been popping up around the country: One of them is a replica of Panera Bread - run by the "Panera Cares" foundation and so far, 2 years later, it has been a rather large success. I hope, if not myself, we can find it in ourselves to do more things like this and change the way we do business fundamentally for the better

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Yeah... the difference? A restaurant doesn't have the liability you do.

You see, the problem with your scheme is that you don't want to pay by the mile or time... but all your expenses are tied to miles and/or time.

Let's break it down.

You assemble a group of drivers for your little venture.

None of them can use the insurance they currently possess when their car is out for hire. Therefore, you have to buy taxi insurance... for everyone. This is priced by the driver's record, the vehicle and, yes, the miles driven.

The use of the cars is calculated by the IRS at .555 dollars per mile. This is, of course, an average. How will you make sure that the cars your drivers are using are reliable and safe? Why, you ask for mechanic's reviews (that you pay for) and routine maintenance logs. You can't avoid this, it is part of your hack's license.... and with personal vehicles, it is going to be a goat rodeo.

Oh yeah, what are you going to do if a driver does break down? Are you going to have another driver pick up the fare? Who gets the tip? Who pays for the repair and tow? Who makes sure that the fare left on the side of the road is safe until another car comes by? I don't know about you, but after being left on the side of the road I am not likely to be in a tipping mood... so the rescue driver... who pays him/her for their time since they won't be making any money while rescuing a person that won't tip?

Who pays for the software tied to GPS that KNOWS where all the drivers are to make pick up and drop off efficient? Or were you just planning that the drivers would be reviewing the web while they were driving and just go to the next on the list? Yeah, THAT won't cause fist fights between your own drivers... especially for those customers KNOWN to be big tippers. So now you need folks back in HQ monitoring location and need and linking the two... who pays THOSE people?

You missed that part, too. I am a driver that works only for tips. Am I going to waste my time picking up folks in government housing or just hang out downtown on the bar scene hoping to pick up folks that can actually tip. But, you say, this was supposed to help POOR people and not rich people... yeah, it doesn't work that way.

Oops, almost forgot a biggie when it comes to insurance... YOUR liability. That's right... because if ANYTHING happens with one of your drivers, you are on the hook...and don't think I am talking about just car accidents and personal injury either. What if one of your drivers rapes or robs a customer? What if the driver gets into a fist fight with a customer that refuses to tip? What if a driver drinks and drives a customer and causes a tremendous accident?

The injured will sue the driver... and then your company... and then YOU.

Saying you are a charity does NOT absolve you from lawsuits.... ask the Catholic Church....or the Boy Scouts.

Even transportation services that are ALREADY free have these issues... which is why they are being phased out by the charities and governments that sponsor them. Transportation services for the sick and elderly are already in existence at no or very subsidized cost.... and they are just too expensive to operate even using their own vehicles and drivers that are volunteers that only work... wait for it... for tips.

And they, to save money, make the people come to THEM on specific drop off and pick up points to maximize use. Kind of like buses.... which are ALSO heavily subsidized.

Okay, so we have identified a BUNCH of costs.... insurance, HQ folks, web design and upkeep, mechanics services, background checks on the drivers, advertising, licenses and certificates... how do THOSE get paid? Oh, you say, I will just take a percentage from the tips the drivers make.

Couple of problems with that. One, it assumes that you find out when and how much a driver gets tipped. Yeah, its the honor system... but when I got a kid at home that needs milk and braces, maybe my fingers start getting sticky. And what happens if they DON'T get tipped....do you just tell everyone back at HQ that THEY aren't getting paid today either?

Face it.. you didn't think this out and now you are mad at US. We don't make the world, we just live in it.

Forgot another possible liability... your drivers themselves. After all, you want to send them to help poor people, right? So you are going to be sending them into some pretty bad neighborhoods.

Who pays for their injuries when they are robbed/injured/killed? Who pays their lost wages? Who pays for the lost vehicle when it is stolen?



There are reasons why PAID taxi services are going out of business right and left.... and you think a free one can make it because people are goodness and light.

I believe in people... but not your idea.

to the Panera Bread situation:

they still have to follow the same health laws required of all restaurants. They still have to pay their employees at least minimum wage. They have a huge company behind them that could absorb all of the losses of that store only if simply to make it look like it is doing well.


to the "other cabbies don't make minimum wage after gas etc"; you are talking about cabbies that work as independent contractors. There is no minimum wage concerns. The cabbies rent the cabs from the owner. They then pay all of their own expenses. Their income is irrelevant.


and as all the others have stated: you need to check into the regulations of a cab company in the area you are dealing in to find out what the requirements are for operating a cab company. Even in the relatively small city I live in they are working on standardizing fares. If they are standardized where you are, you simply cannot alter the rates imposed.

Sigh... I didn't ask anyone for their commentary on how viable my business idea is - I think it is viable in the very least for the use and appreciation of people, and even if it makes no profit, fine. I was MERELY concerned about what LEGAL classification (note "freeadvice legal forum") it might have for the purposes of licensing and regulations. Nothing more, nothing less. And as it stands, it appears I have my answer despite what some of you keep posting.

I also live with and accept reality everyday. I'm not trying to avoid anything. I'm trying to help people. You should try it one day, too.

With that being said:

@CYJEFF:

I never said I would BAR *EVERYONE* who did not tip. I said I would bar or otherwise work to limit/mitigate the abuse that you suggested would be directed towards my service by angry cab drivers that I'd be (somehow) putting out of business with my one car. Nevermind that there is a physical limit on how many people I would have conveyed with that car especially considering your argument that it wouldn't last 2 weeks - how can you have it both ways? And I do not see any issue with a mechanism as I described. The service would be free, donations would not be compulsory, but abusing the service in a way that unfairly limits the availability of the service to other people wouldn't be tolerated. And that is no different from ANY other business model - for or non-profit.

Next, just because something is considered an "honor system" doesn't mean it won't work. It's called thinking outside of the box - perhaps few people even bother trying because of greed, the assumed (keyword) greater risk, or the extra challenge it takes to build such a business. But the reward (hint: it doesn't have to be monetary) is that much greater.

Just because expense is tied to money and time doesn't mean the fare necessarily has to be. Perhaps the conventional taxi services failing are doing so because their model is ALIENATING their clientele not to mention their drivers/employees. It never has been, and if nobody makes the effort, it never will be a viable method of transportation for $2-3/mile. Nevertheless, A local taxi company here in FL posted a QUARTERLY profit of about a half million$ - and their independent cabbies are one step from welfare - and their clientele will be too if they keep paying $20 to get a ride up the block. It makes little sense to choose a taxi unless you have no other option and/or have extra money to burn.

As for your little "break down" - how presumptuous can you truly be? When you make assumptions (like I haven't thought of anything and I'm just tossing business ideas around that come out of my ass), you make all of us look like asses. Again, I didn't ask for your commentary on the viability of this venture... I simply asked how you thought it might be recognized by the government in terms of regulations. I was hoping I could somehow avoid the majority of the rules, sure - it is extra expense - but it is now up to me to find a way to comply with them while keeping the business sustainable for years to come. If I do it, I'm gonna drive a van up to you and give you a "reward" for trying to tell me I can't do it

Lastly, I will confirm that I HAVE thought about the issues you brought up, and I am not mad at the answers you are giving me - I'm mad at the ****ty attitudes you're giving me and that you're taking it upon yourselves to hijack my thread and have the audacity to tell ME I didn't think it through when I never once asked for that commentary. I do live in the same world as you, I'm just one of few that are trying to change it for the better...and it'd be nice if you'd help the effort versus fight it tooth and nail.

@JUSTALAYMAN

You need to do some more research on the Panera cares foundation. If they are using the parent companies profit to "absord" the staggering losses of the free CAFES (PLURAL!), I'm sure the IRS would love to know.

I understand it is hard to believe "FREE" or "PAY WHAT YOU CAN" business models can work and work well (even and especially in this economic climate), but the REALITY is that they do...and they will continue to do so because the one thing you guys are forgetting is that they encourage and promote social welfare for PEOPLE, and lack the corporate bureaucracy and overhead of executive salaries and bonuses that conventional companies love.


It's OK though, I'll still pick you guys up from my LEGAL, INSURED, SECURE cab even if you *******s don't tip