The existing ride-hailing companies in AustraliaWith the advent of the ride-hailing dispatch system; competition and market saturation have also reached the skies. Taxi services are no longer localized and everyone has access to them 24/7. Therefore, emerging in the taxi industry as a leader (given the number of competitors) is not easy. Our ride-hailing business model is specially designed to help you emerge as the market leader and catalyze your performance by evolving your just-another taxi company into a top-class service. Let’s look at some of the leading ride-hailing companies in Australia.
Water Taxis AustraliaWater Taxis Australia is a Smartphone application that can be used to book water taxis to Sydney Harbour, Palm Beach, Pittwater, Gosford, Hawkesbury River, Brooklyn, and Whitsundays. Water taxi service based in Sydney, Australia, and is one of the most successful CabStartup clients. Water Taxi app has helped us expand our client base to every corner of the continent all while adding incredible flexibility to the services. Water Taxis Australia has a ready to use mobile app. It also provides an online quote for people not having access to a Smartphone. What has made the Water Taxi app emerge as the industry leader and first choice of the customers is:
- Easy Passenger Bookings: It is a fairly quick and easy process and involves just a click on one’s Smartphone. Download the app and book a ride.
- User-friendly mobile app: One does not need to be a tech-savvy genius to operate the app. It is simple and everyone can navigate their way through it.
- All payments through the phone: Once the ride is booked; all payments can be made online, through the Smartphone. Just scan and store the credit/debit card and be free of all payment hassles.
MooV (Online ride-hailing platform)MooV is another online ride-hailing platform based in Perth, Australia. This CabStartup client collaborates with taxi drivers and cab operators and allows customers to look up for a ride and book one for the desired time and location. This rideshare software app allows consumers to track their drivers in real-time, rate them and also make payments online. Any driver can register with this platform by submitting the required information and credentials. MooV is one of the best rideshare software app examples. Anyone who owns a taxi or a taxi service can join the platform and offer their services to a massive client base.
The ride-hailing industry challengesThe ride-hailing business model has witnessed a massive boom in the last 5 years. Majorly because of the ease and cost-effectiveness that it offers. Experts are of the view that in the post-COVID world the ride-hailing industry will experience regression owing to several daily commuters working from home now and avoiding rides shared by multiple customers. The biggest challenge faced by the ride-hailing industry in the current (COVID) times is to ensure public safety by following all the sops. But the question remains: is it all fun and games? Let’s look at some of the challenges this industry is facing:
- Market Saturation: For companies operating in the ride-sharing industry one of the biggest hurdles is to win over their competition. The domestic competition has grown bigger and brighter in the ride-hailing industry with each passing day. Many companies, therefore, find it hard to expand locally and globally.
- Government Regulations: When the ride-hailing industry was growing to see the light of the day, governments all around the world were not prepared for its impacts across the globe. Now, however, they are slowly but surely catching up, implementing rules and regulations which restrict the movement of the ride-hailing platforms in certain areas and at certain times. The governments find themselves taking on extra responsibility by ensuring public safety, reduced crashes, and protection of city policy goals, fraud prevention, and labor exploitation along with the fulfillment of the taxicab regulations.
- Price and Profitability: Price war is one active battle that exists amidst ride-hailing companies. To gain market share, many companies slash their prices which results in popularity and customer base but pushes the company back in the profit race. Uber recorded a loss of $2 billion in 2018 as a result of adjustments, stock-based compensations, and driver rewards. Becoming popular, successful, and the market leaders all while being profitable is the biggest challenge being faced by ride-hailing companies.
- Self Driving cars: Autonomous vehicles are coming and as the experts suggest; self-driving cars will be driving people around, dropping off orders, and making deliveries. This near-future advancement is a big threat to the business model of ride-hailing companies. They will need to invest in a big fleet of autonomous vehicles to survive and compete.
- Lawsuits: As easy and golden as it appears to be, the ride-hailing industry has its share of legal issues. The majority of the big names in the ride-hailing industry have faced massive lawsuits. The ride-hailing giant, Uber, for example, has 70 pending federal lawsuits to date.
Australian Taxi Market- Trends and ForecastThe Australian Taxi market is expected to project a growth rate of 9.61% from 2020 to 2025. Taxis are a big component of the Australian Transportation Network. Owing to the numerous benefits offered by the taxi services; the demand for taxis is ever increasing in Australia. The user penetration in the ride-hailing segment will be at 21.1% in 2021. The prime factor that makes a company grow popular and grow big is the accessibility provided by the ridesharing software app. This app then provides benefits such as:
- Booking Convenience
- Multiple Payment Options
- 24/7 effective customer support program
- GPS enabled and safe vehicles
- Electrically operated fare meters
- Cost benefits
- Come up with a better and efficient business strategy.
- Make sure that the customer is being provided the best services at an affordable rate.
- Target the area where the minimum amount of ride-hailing companies are operating and where revenue generation is maximum.
- Provide ease of usage and payments.
Why is UBER an attractive ground for investors?Not every marketplace allows businesses to grow. UBER learned this the hard way while exploring China. Even with many big names failing to survive in the region, UBER took its chances – it created a separate unit for China, collaborating with the local tech giant Baidu back in 2013. The company faced challenges from the beginning, and soon after investing millions of dollars, they saw their business model failing – it just wasn’t made for the Chinese market. Therefore, after a few short years into the country, with substantial losses in terms of money and reputation, UBER China was sold to its biggest competitor – Didi. UBER, however, still has a 19% stake in Didi. Whether it was a well-crafted, strategic move or a humiliating defeat is still open to debate. So, the question is, why a startup, founded in 2009, still turbulent more than a decade down the road, is an attractive ground for investors? Here’s why:
- Big stakeholders in the game make it to the executive board at Uber. Now, this is critical for businesses because it gives them the power to influence important decisions of a leading ride-hailing company. This is how the founding CEO of UBER, Travis Kalanick was voted out and had to step down from his role in 2017.
- Purchasing equity for a company like Uber helps businesses stay part of the organization even after leaving the company due to any reason or a turn of events, like what happened in the case of Travis Kalanick.
Uber’s sustainability planBecoming self-sustainable for a company like Uber is essential to its success. So, how does Uber plan to do it? To understand that better, let’s briefly look at how UBER makes money with the existing system. Fare for each ride is divided among three stakeholders. The exact ratio varies from region to region. Generally, however, the driver and the owner take 70% of the share, with the remaining 30% going to UBER. The existing percentage of share that UBER has is not sufficient enough for it to pay the bills. Therefore, it is working on plans to achieve sustainability in the future. So, how does UBER make money?
Autonomous VehiclesUBER’s CEO Khosrowshahi intends to get the startup profitable by the year-end 2021. One of the biggest keys to attaining profitability for the transport giant is by UBER establishing its influence in the world of autonomous vehicles. Even though the program has been under execution since 2015, under the then-CEO Travis Kalanick, with plans to launch a pool of self-driving vehicles by 2020 but, this had its share of disruptions including a test vehicle drive that led to a fatal accident. This created hurdles for the company since UBER began losing trust among the masses therefore, it recently sold its self-driving unit to a startup, Aurora. This seems like a strategic move by UBER because they don’t want to lose their influence on the world of autonomous vehicles. Reality will, however, soon unveil itself a few years down the road.
Abandoning Private Vehicles ownershipSince UBER works by collaborating with the vehicle owners, a substantial amount of the fare goes to them. This significantly reduces the profit margin for UBER therefore, it has planned to abandon private vehicle ownership by introducing its very own vehicles.
Electric CarsAs part of the clean air initiative, UBER has decided to completely switch to electric vehicles in the US, Canada, and Europe by 2030 and in the rest of the world by 2040. One of the major hurdles in making this switch is cost. Therefore, to encourage drivers to change vehicles, Uber drivers owning a hybrid vehicle will charge 50p extra for each trip, and for those running completely electric vehicles, this additional charge will be $1.50. This is already operational in several US and Canadian cities.
UBER’s M&A (Merger and Acquisition)UBER is the most dominant ride-hailing company world-wide. Ever wondered why? It’s because they don’t let competition stay in the market for long – they acquire it. In the recent past, UBER completed the acquisition of Postmates Inc. for $2.65B in the US, which is a food and grocery delivery company. It has its food delivery service, UberEats. Both of them will run side-by-side supported by a combined, more efficient delivery network. UBER also acquired the Dubai-based ride-hailing service, Careem for $3.10B. It is now entirely-owned by Uber, preserving its brand name. Careem’s co-founder, Mudassir Sheikha will continue leading the business, reporting to an executive board consisting of 3 members from Uber and 2 from Careem. Both the businesses will be operating in the regions as independent brands, offering their services. Apart from this, there is an entire array of diverse businesses that UBER has acquired or plans to do so. By adopting this strategy in the marketplace, UBER is no more limited to the ride-hailing industry. It is making a mark across the globe in a multitude of industries.
The way forwardThe main focus for UBER to date is to attain self-sustainability. There, however, have been talks regarding the startup’s plan to introduce deliveries via drones and flying UBER as taxi services. The buzz around drone deliveries has subsided so far, but in 2019, there had been talks regarding UBER’s plan on launching drones for food and other delivery services especially in the densely populated cities to reduce delivery time and cost. UBER elevate does, however, meet once yearly to discuss its progress regarding their flying UBER venture. Like most businesses across the world, UBER had its fair share of hits due to the global pandemic which forced it to take a step back from its dream of flying high into the air. Therefore, Joby Aviation of California will take over UBER elevate after an intricate deal in which UBER will invest $75 million in the startup. This, similar to the autonomous vehicle unit, seems like a long term strategy by UBER. One of the fastest, controversial companies of its times, UBER has made a significant impact upon the ride-hailing industry. It continues to do so, expanding across the globe, offering market-appropriate services in a multitude of diverse fields. Struggling to stay influential in a significant portion of the world, UBER has learned from its mistakes in China, and other regions, trying to make intelligent, strategic moves to strengthen its roots within the industry. If you are looking to explore the ride-hailing industry, reach out to us and let our experts help you out!
Uber system designUber’s application is designed to look simple. But, when a rider requests a ride, an entire intricately connected backend ecosystem activates to deliver a smooth experience for its users. Like most web-based applications, Uber started as a monolithic system architecture with a few application servers and a database. The initial system worked fine for providing services within a few cities, but, as its presence within the world swelled, Uber shifted to a service-oriented architecture, consisting of numerous services.
Basic AlgorithmThe dispatch system design of Uber acts as a real-time marketplace where it matches the demands with the supply using smartphones. So, the entire system has three broadly categorized services:
- The Demand Service
- The Supply Service
- The DISCO service
The Demand ServiceWhen a rider books a ride, it gets connected to the demand service of Uber, accessing the GPS location of the rider to track the pickup point along with other specifications that the rider has requested for in the particular ride. This demand then matches with a cab within the supply pool.
The Supply ServiceAll the active drivers registered with Uber, periodically send their geolocation to the Supply Service with other details like the status of the drivers, for future reference. This way, whenever demand arises, the supply service has the latest information and can match with an appropriate supply. Now that we understand the basic working of these two services, we will move on to the matching service, known as DISCO in Uber.
DISCO (Dispatch Optimization)DISCO or Dispatch Optimization is where a series of events are activated in real-time to match demands with the supplies. Efficient location tracking is pivotal for applications like Uber. Therefore, to enhance system output, Uber uses Google’s S2 library, which divides the entire system into small, equal-sized cells. These cells are labeled uniquely for ease of identification. When demand arises, DISCO matches all the available supplies within the vicinity of the rider’s cell ID, matching the best possible cab with the rider based on the existing roadmap. This is critical because the road infrastructure and the traffic conditions determine the ETAs of the driver candidates. The supply service then matches the best driver available for the trip. The DISCO algorithm aims to decrease the trip ETA by reducing:
- Overall wait time
- Driving time and distance
Uber’s challenge – Providing a seamless user experienceNow, since we have formed a basic understanding of how to design Uber backend, let’s look at the various technical challenges a real-time system faces and the workarounds Uber has found for them. Dispatch systems like Uber are required to provide an uninterrupted and seamless user-experience. Matt Ranney, chief systems architect for Uber says:
To enhance system performance, Uber chooses technologies that are steady and can deliver results rapidly. It ensures that the entire infrastructure works independently of each other by carrying out extensive testing. So that, even with partial systems crashing, there is no down-time.
“Another challenge is that Uber cannot afford a system failure. Ever. If a Uber customer cannot get a Uber car, then they will switch to another app. There is no brand loyalty. The systems must always work.”
Scaling the dispatch systemDispatch system-based applications like Uber require effective, scalable architectures to accommodate fast information processing in real-time. Uber addresses these challenges by using various standard technologies combined with their in-house solutions. The dispatch system is written in Node.js, a platform built for real-time distributed systems. It has an asynchronous and event-based framework that aids the sending and the receiving of messages over WebSockets. But, according to the system architecture at Uber, Node.js and Python have performance issues therefore, Uber might switch to IO.js, a branch of Node.js, further enhancing system performance. Uber also needed a mechanism to scale and distribute the data to multiple servers, for which it uses its RingPop technology, similar to Riak and Amazon’s Dynamo. Uber’s RingPop solution also manages cluster membership using SWIM (Scalable Weakly-consistent, Infection-style Process Group Membership Protocol). Uber has also modified its communication channel, calling it the TChannel which is similar to Twitter’s MUX but, since Uber supports more languages compared to Twitter, it had to transform the standard RPC communication protocol to adjust to its requirements. According to Ranney, Uber is also replacing HTTP and JSON with Thrift.
The use of these modified technologies significantly aids in improving system performance at Uber, a key factor to its success.
“We are even looking to replace HTTP+JSON, a typical REST API, with Thrift, as our tests are showing that it is 20 times faster. We need all the speed we can get.”
Data managementReal-time applications like Uber have a significant dependency on reliable data access at all times. Traditional database system architectures may act as a single point of failure for the entire system. Therefore, Uber uses Big Data stores as the infrastructure for its technologies, using tools like Redis and Postgres. Uber considers smartphones portable minicomputers, using driver’s applications to distribute data. This way, the pressure of data replication across servers is relieved. As mentioned earlier, all the drivers check in with the supply service periodically, to receive an encrypted digest in return. If at some point, the driver does not receive a reply, it automatically connects to the backup server. To handle these periodic driver updates, Uber works with a Kafka Cluster which logs all the incoming data traffic. This information is then sent to different worker nodes and persisted to the database asynchronously.
The way forwardUber system design continues to evolve to match the rising user demands. It has made its mark on the transportation industry, revolutionizing the dynamics of the existing infrastructure completely. The key to its success is performance, therefore, this is how Uber works to expand its ecosystem, providing a swift user experience. Uber’s model has set the bar high for enterprises that aim to produce fast, distributed, and scalable services for its consumers. If you need a dispatch system similar to Uber, contact us and let our experts help you out!
Why On-Demand Water Taxi App is a brilliant ideaWater taxis do not only provide a quick, cheap and unique experience to tourists for sightseeing but can also become a daily source of transportation for commuters to catch a ride to their workplaces. These people will more likely prefer a fast water taxi service instead of struggling to get on time through the heavy traffic at rush hour. Another reason why providing on-demand water taxi services is a good idea is that the target market is very broad. Tourists, commuters, leisure seekers; all use water taxis. Thus, a water taxi business provides such a service that is always in demand and is used every day resulting in daily revenue generation.
What does it take to start a water taxi business?A successful business must have a sound business plan. Thus, it is crucial to consider the following points to devise a successful water taxi business plan.
What are the start-up costs?You must have the budget and funding required to cover the initial costs. The primary components to start a water taxi business are:
- Passenger boats/vessels to get you started.
- Fuel; It is more profitable to invest in electric vessels powered through solar panels.
- Signage of the vessel
- Marketing and advertising cost of the water taxi business
- Development of the water taxi app
The Target MarketAlthough a large portion of the water taxi demographic is comprised of tourists but water taxi service can be more than just for tourism. Incorporating water taxis into the public transportation system can garner skyrocketing profits and more riders. Consumers all around coastal areas have realized the benefits of utilizing the on-demand water taxi services and consider it an economical commuting option.
Revenue Generation and faresThe primary source of revenue regeneration is from the rides the water taxis transport. The fare calculation depends on the location and the specific service offered.
Market and CompetitionMake sure to check out the competition in the coastal area and find out how strong it is. If the competition is too tough with already established loyal customers then it would be wise to start the water taxi service in another area or try to come up with a unique value proposition that makes you stand out.
Establishing a legal entityFor starting a water taxi business, it is very important to establish yourself as a legal business to prevent you from being personally liable in the situation if the service is sued. Moreover, it is also very crucial to obtain all the necessary permits and licenses. Getting Business insurance to protect the financial wellbeing of the water taxi service is also beneficial to recover if a loss occurs.
What is the growth potential and how to make more profits?Fuel costs and vehicle maintenance costs are rising everyday due to which consumers are seeking out alternative transport sources. An on-demand water taxi app solves these problems and will only grow with the future as the customer needs increase. Once the business has started, you can make the water taxi service even more profitable:
- Adopting hybrid-electric powered boats which can reduce expenses.
- Hosting dinners or sunset cruises
- Offering transportation services for materials when there is a lull in customer activity.