If you're interested in earning some extra income to save for a wedding, house, or a child's college, you may be considering signing on with one of a number of new private taxi companies that allow you to accept local fares from a computer or mobile app. While this can be a great way to work around the time constraints of a day job or family demands while still earning money, there are some potential drawbacks you'll want to take into account before you begin work. Read on for some of the factors you'll want to consider (and questions you'll want to answer) before embarking on this new business venture.

Will you earn enough to cover the additional wear and tear on your vehicle? 

Many private taxi companies have strict limits on the years, makes, models, and conditions of vehicles permitted in their fleet. As a result, to qualify to drive for a private taxi service, you'll usually have to have a relatively new vehicle in good or excellent condition. Driving your vehicle hundreds of extra miles per week will require you to replace your brakes, tires, and other wear items more quickly, and will require more frequent oil changes. You'll also need to have your vehicle periodically detailed -- especially if you often accept the late night or weekend fares involving intoxicated passengers who might make a mess.

While your hourly rate should be more than enough to cover these costs, it's important to evaluate the projected cost of this additional wear and tear before taking on your first customer. A common mistake for first-time drivers is to think of the entire fare as pure profit.

Will your auto insurance policy cover this additional use?

In general, your auto insurance covers only private or personal use of your vehicle. Those who travel frequently for work or transport customers or clients in their vehicle are often required to purchase a commercial policy that will provide additional coverage -- claims submitted under a personal insurance policy for work-related accidents could be denied. While some private taxi networks provide insurance for their drivers while these drivers are on the clock, they often don't provide coverage during the time you're traveling to (or from) picking up a fare, so you may need to purchase some insurance to fill this gap.

Regardless of whether you think you can get by with your existing insurance policy when driving for a private taxi service, re-evaluating your insurance coverage once you begin using your car for income purposes is a good thing. Most auto insurance policies carry per-person limits on coverage of medical expenses or other payments to injured passengers -- exceeding these limits in an accident could leave you on the hook for remaining expenses or even result in a lawsuit. By increasing your coverage limits, you'll be able to rest assured that you're fully financially protected in the event of an at-fault accident. Talk with an insurance agent, such as those at Gateway Insurance, for more information. 

Will your taxi service interfere with your "day job"?

If you're planning to drive for extra income in addition to your full-time job or another part-time job, you'll want to ensure your new part-time job doesn't interfere with your schedule (or your ability to perform) your full-time job. Working one shift at your first job and then spending the rest of the evening driving could leave you exhausted after a few days, so you'll want to ensure you schedule yourself some off time to rest and mentally recover.

Fortunately, many private taxi companies allow you to set your own schedule, accepting fares when you're free and turning off your phone or mobile app when you're not. You'll want to make sure this is an acceptable arrangement before signing any contracts to avoid committing yourself to more than you can handle.