This is a two-part story of how I managed and run my first side hustle, a taxi business.

I ran the business for three years – from September 2012 to September 2015. I had three taxis on the road at its prime.

I ran the business before Uber and its technology rerouted the paths our local taxi industry was steering to navigate. Nothing was the same after these Uber-like apps docked at our sea, and fell into the hands of taxi drivers, owners and consumers.

It was an evitable yet almost natural advance of technology. How we embraced this technology is a totally different subject.

In Part I of this story, I shared with you how I researched for and financed the business.

This is what happened after.

As I mentioned, this is a roadmap to how I set up and run the business. I’ll throw in figures that’ll likely make the story difficult to digest, stay with me.

WHAT COULD GO WRONG IN THE BUSINESS
So there are the cars on one hand and the fleet managers on the other hand.

What could go wrong with the cars: They could get stolen, into an accident or fender bender; they could be recklessly driven or used for other purposes besides a taxi. Insurance had covered to a large degree these risks.

What could go wrong with the fleet managers: They wouldn’t pay me or pay me on time; they could inflate the monthly repair costs; or invoice me for capital expense which hadn’t been incurred; or they’d deny knowledge of me giving them the cars.

It would take the grace of the good Lord, the driver’s personal integrity and toughening myself up not to be bullied, to address these risks.

EXITING THE BUSINESS
I’d only need to sell the cars, settle the bank loan with these returns and I’d be out of the business.

MANAGING THE BUSINESS
I handed my ready-for-work taxis over to two different fleet managers. I did this to spread my risk.

The fleet managers had service contracts with some corporate companies across the city, including one in Upper Hill. They already had other taxis in their fleets, mine would add to their fleet and get them more clients, more income, and more to write home about.

For the sake of discipline and personal boundaries, I told them that I didn’t want access to the cars in any way whatsoever. Unless there was a big emergency, like maybe my brother was getting married in Machakos and the family needed to be transported down.

I also didn’t want to get free rides from the drivers.

The fleet managers would take care of monthly services, small repairs costs, fuelling and managing everything to do with the drivers. I’d take care of capital expenses like replacing tyres, paint work, annual insurance and inspection fees, and any extra charges in the event of an accident.

I had Excel worksheets to account for all money I received. This accountability settled misunderstandings (and helped me write this story using actual data, years later).

WHAT HAPPENED DURING OR AFTER 36 MONTHS
Well, the business had its fair share of delayed payments, frequent repairs and reckless drivers. But nothing to burst a hernia. To be honest, I was satisfied with how it was running and with my relationship with the fleet managers. I was also happy with the monies that were coming in. These monies fully supported me in the months I was transitioning to becoming a freelance writer.

Two and a half years into the business – in April 2014 – I took another Sacco loan of Sh1.5 million. I’d pay it back in four years. I wanted to expand the business and grow with my sacco.

A sacco loan is cheaper than a bank loan. For Sh1.5 million borrowed with the bank, I was repaying per month Sh50,000. With the sacco, I was repaying Sh39,000.

This sacco loan cleared what was left of my bank loan (about Sh1.3 million) and left me with extra money to top up and buy another taxi. I bought a Toyota Axio for Sh800,000.

Unfortunately, a year later, in April 2015, this Axio was involved in a road accident and was written off. By the time of this accident, I’d made Sh210,000 from it. Insurance settled with a cheque of Sh650,000.

Later that year, I sold the other two cars I’d started the business with.

The NZE didn’t break even. I’d bought it for Sh660,000. It made me Sh541,000. I sold it for Sh500,000.

The Fielder broke even. I’d bought it for Sh750,000 and it made me just as much. I sold it for Sh520,000.

Summing up the sales returns from the NZE, Fielder and Axio, I had liquid cash of Sh1.6 million.

I cleared what remained of my sacco loan and reinvested the balance of about Sh500,000 in another business.

HOW TO KNOW IF IT’S GOOD FOR YOU
This business is good for you if you have the capital available to invest. The business has relatively good margins, and a clear exit plan. Its major risks are covered by insurance.

These days, the technology in the taxi-hailing apps – Uber, Taxify, Little Cab – has made it much easier to manage. These apps also mean you have transparency and full control of your business. I didn’t have as much control as I’d have liked.

Considering this is a side-hustle and you have your 9-to-5 to attend to, I suggest you get a taxi manager to supervise and monitor activity. Someone who’ll manage the car, driver, fuelling, service, repairs of whichever kind, run ins with county authorities, cash. Give them a percentage of the monthly returns, say 15 per cent.