An interesting question on Quora:
Almost every taxi business has an app. How will an app make my business stand out from the rest?
This is a question of digitization that businesses large and small are struggling with. However, the question isn’t (and shouldn’t) just be about an App. It is about your business model and the tools you use to enable the business.
(Images from google search)
Let us look at the business of taxis
- A generation ago, Taxis would congregate at taxi stands (near bus stations, railway stations and other public places). Passengers alighting from their bus/train would hail a cab for the rest of their commute. Some Taxis would drive around downtown and get hailed by passengers.
- 15-20 years ago, taxi businesses began equipping their taxis with “2-way-Radios”
- Taxi businesses started advertising easy-to-remember call numbers like “777 7777.” They also began managing a “dispatch” service (a.k.a simple call center) with central numbers that people could call. The dispatcher would take requests from passengers, radio the nearest available taxi and send them to passenger locations.
- 5-10 years ago, taxi businesses started enabling car-phones, mobile phones and GPS on their taxis.
- The business-process of managing “dispatch” and locating nearest taxis is now enabled by software applications. Part of the application downloaded by consumers on their smartphones is called an “App” (short form Application).
- Many taxi-businesses are developing an “App” hoping that they can compete with new businesses like Uber. However, this is still the same taxi business model enabled with an App.
Change is here:
- Ride sharing services like Uber, Lyft and other online services have changed the traditional “Taxi” business model.
- The application (App) developed by these provides includes freelance and non-professional drivers who sign up for the service.
- Drivers don’t have the same commercial licensing as professional taxi drivers. However Drivers are verified by the service provider and are rated by users after each ride. Consumers seem to have accepted such “peer verification” and are comfortable with it.
- These services with freelance drivers are competing with traditional taxi drivers
- Almost every taxi-service has also developed an App for their users. Individuals are free to choose the “Taxi App” or Uber or Lyft app
Back to your question: How will an app make my business stand out from the rest?
An App alone will not make your taxi business stand out, especially in cities where consumers have a choice that includes Uber, Lyft etc. However, having a good App for your business is a necessity, almost like Radios and car-phones were. Your TaxiApp should be easy to use and have features similar to that provided by ride-sharing services. Users love GPS, Map lookup, online taxi-booking, payment integration, driver rating etc. In addition to the App, you will have to review your business model to see what will make your Taxis stand out:
- Unique service:
- Are your Taxis unique? (e.g really-clean Taxis, good AC, polite drivers, Female drivers for female-passengers etc etc)
- You should advertise this uniqueness. Advertising a unique number like “777 7777” is no longer a unique-differentiation.
- Local services: Do you operate in smaller cities or suburbs. e.g Springfield IL, or Anytown, NC where a lot of Uber drivers haven’t been recruited? You may have an opportunity to localize your service and prepare for the time when Uber comes
- If you don’t provide a unique or local service, or if you operate in a large city like NYC or LA, you might want to collaborate with other taxi services or merge your business with another large taxi service and focus on your strengths and scale.
Bottomline: Digital Apps are bringing fundamental shift to business models. Businesses large and small must review their own businesses while they plan to stay ahead.