Growth of the taxi hailing app sector in recent years
The taxi-hailing industry has grown by leaps and bounds in the past few years, This has to do with the introduction of mobile applications as an ideal base for them to operate. Reputed as the best taxi-hailing company, Uber was able to restructure the way the industry worked for decades. It was not a smooth sailing for most of these companies. The fortunate ones were able to cross multiple hurdles and established themselves as market leaders. Let’s try to debrief their path to greatness.
What made taxi-hailing apps so popular?
The core reason, that can be singled out for such tremendous popularity was the ability of these new-age taxi hailing services to break away from the traditional methods that were followed by many countries for ages. These taxi booking apps were able to provide great relief by being an alternative for the consumers. Most of the taxi industries around the world are monopolies with fixed tariff rates decided by the local governments. The mobile booking apps were able to break this regulated procedure. New generation taxi booking app brings a change in the taxi industry.The mobile taxi booking apps do not own any taxis and all they do is sign-up a driver and that is it. By this, they avoided almost all major complications and were able to concentrate on providing exemplary service to the consumers.
The various Obstacles these apps faced
As mentioned earlier, these taxi booking apps didn’t have it all in an easy way. They faced enormous issues with regard to operations, security, legal, the traditional taxi companies, taxi unions, lack of transparency in the fixation of tariffs and much more. The revenue sharing model, on most occasions creates huge complexities and it was not an exception with taxi booking apps. Most drivers were not comfortable with e-payment and were not okay to list themselves. Another huge and major obstacle faced was the surge in prices. Uber and other taxi booking apps hike their prices if they sense an increase in demand. During a natural calamity, a siege, etc., to name a few scenarios. This was met with huge criticism among the general public.
Marketing & Monetization Strategies Followed
Based on the need, entrepreneurs used a variety of marketing and monetization strategies for their apps.
Incentives and cash discounts
This was the strategy used by most of the taxi booking apps to achieve a market entry.
Marketing platform for brands
This is a type of “co-branding” activity. For example, a reputed car company can tie-up with any of the taxi booking apps to allow consumers take a test drive.
As an engagement tool
This is a monetization strategy that the taxi-hailing app can implement only with the consent of the consumers. Multiple forms of data can be collected by analyzing the pick and drop points; frequency to a certain destination, etc. This information can be used by the company themselves for further business or promotional activities or can be sold to a third-party.
Reason for failure of many taxi-hailing apps
For starters, for a taxi-hailing app business to even sustain in such a fierce competition, requires a humungous consumer base. This is because the company relies on making the profit from a very small cut that these apps makes out of the rides. Playing a middleman who has to make the profit out of a very small cut is a high-risk scenario and many taxi booking app businesses failed in achieving, that resulted in their unfortunate exit.
What does the future hold?
Market saturation is always a concern for any kind of businesses and the smart ones, plan in advance to tackle it and sustain in the industry. When it comes to the taxi booking sector, the major problem that arises with regards to saturation is mostly demographic. In a densely populated city, the chances of them earning more is high, when compared to a scarcely populated one. With more and more taxi booking services are offered as options to the consumers, market saturation tends to happen. During such a situation, the company should be able to make use of the existing consumer base to create various niches and offer services exclusively.
The grandeur success of Uber has led to the creation of numerous apps that offer taxi booking and renting services. The market is ever-growing and if you think about the right time to enter the market, this is it. Agriya has developed a taxi booking software, mirroring the functionalities of Uber, that helps in simplifying your work to a great extent. But the catch here is, implementing right model and marketing, as it plays the crucial part in determining the success and the longevity of your taxi booking service businesses. Do your research, identify your goals and objectives and build your app to bring in the desired returns.