The taxi industry is finally getting a kick up the behind with innovative technologies solving long-term problems for consumers and taxi drivers.
The taxi industry is undergoing a major overhaul, driven by the development of new technology. With the arrival of the sharing economy, and platforms like Uber creating a place for themselves through innovative new platforms, the industry has been forced to adapt in order to survive. While this change is generally good news for consumers, it will invariably hurt the taxi drivers who really do work hard and often cop slack for the actions of a minority who get attention in news stories.
The service equation
Traditionally, taxi ‘service’ requirements for both the driver and the rider were fairly straightforward:
|Is the taxi going to arrive if I book it?||Is the customer going to be there waiting when I arrive?|
|How far away is the taxi?||Will the customer pay or 'do a runner'?|
|Smooth and fast payment||Fast payment to avoid creating traffic|
Taxi mobile apps have changed the game
With the arrival of mobile applications and a more technology driven service ecosystem, the requirements for both customer and driver have changed:
|Customers||App Solution||Taxi Drivers||App Solution|
|Is the taxi going to arrive if I book it?||When you book with an app you have the opportunity to call the Taxi driver||Is the customer going to be there waiting when I arrive?||The taxi driver has the opportunity to call the customer directly.|
|How far away is the taxi?||In the app you can see exactly how far away your assigned taxi driver is on a Map, along with an ETA in minutes||Will the customer pay or 'do a runner'?||Until now taxi drivers had no visibility to customer details. App companies have your e-mail address, name, credit card and address details for dispute resolution on behalf of a taxi driver. Currently the taxi networks are too busy and can only refer the case to the police, which we don't have resources to be able to service.Not to mention the fact that automatic billing can happen via the app and if PayPal is used you are covered by Paypal's dispute resolution process also.|
|Smooth and fast payment||By pre-loading your credit card in to the app, you can save a huge amount of time when it comes to payment. The taxi driver just needs to press 'delivered' and your account is charged. No swipe, sign, pin, or waiting for a mobile EFTPOS terminal to get reception!||Fast payment to avoid creating traffic||Taxi drivers no longer have to pull over in no-stopping zones for 3-4 minutes to do a transaction. They can bill you whilst the cab is pulling up to your location and you can quickly exit the vehicle, dramatically reducing the amount of traffic caused by cabs on our roads.|
Comparison of transport mobile apps
The traditional taxi eco-system
Here's a bullet point run-down on how taxi businesses ran before the arrival of mobile apps. Traditionally, there were 3 key stakeholders in the industry:
- Taxi Networks (eg: Taxis Combined)
- Taxi Operators (these companies own many cabs, sometimes 100+)
- Taxi Drivers
Taxi Networks have brands like Taxis Combined or Silver Service, and are well known. Consumers call them up directly and visit their websites and they distribute their "leads" over their radio network to cabbies who then indicate they are interested in the job. They charge a fee to Taxi Operators to have access to their "leads".
Taxi Operators own several cabs (I’ve heard some operators own over 100 cabs) and they then sub-lease these cars to Taxi drivers. Two drivers sub-lease one car, one for the day shift and one for the night. Each shift has an approximate lease fee of $120 and with that they have access to the radio calls for customers wanting to be picked up.
Taxi Drivers pay their lease and look after their own fuel. If there are no jobs, they drive around the city and suburbs hoping to be flagged down by a customer.
The taxi networks and operators are NOT happy
They have responded not by trying to compete, but instead with a campaign against taxi apps. I think that it’s a process of evolution that is going on here. If the taxi networks and operators are not able to evolve their businesses to come up to speed with what consumers want, then it’s only fair that taxi apps are given right of way to take the industry forward through their innovative approach to solving consumer problems.
The future for the taxi industry and more innovation
I think there is more to come and can see many of the players getting involved in areas such as aggregation of taxi driver reviews where they can provide taxis with ratings work for their performance, therefore increasing customer service levels and incentivising performance for taxi drivers.
Extending on this ratings system it would be an excellent feature to be able to request specific drivers through the app.
What is your view? Do you think taxi apps should be supported by taxi networks and operators?