Most of the businesses from a century back no longer exist. Taxi industry is one of the businesses which did not only survive but continues to prosper. It is undeniable that technologies over the time have made a number of updates to taxi industry, but the foundation of such businesses remained same. As taxi companies are growing unceasingly, new entrepreneurs are facing a range of challenges. Thus, most of them are curious to find about how to start a taxi business.
This article coupled with the next one precisely presents the secrets of starting a successful taxi business. Apart from market analysis and top taxi business ideas, it also shares brief information about CabStartup platform.
Market Research and Consumer demand
Before embarking on the campaign for identifying taxi business requirements, you need to determine if your chosen location requires a taxi business at all. A market already abundant with taxi companies needs massive initial investment to outrank existing businesses.
To avoid excessive capital inflow, one workaround is to identify the shortcomings of existing businesses and provide a solution to them. For instance, Via rideshare started in 2012 when Uber was already ruling the major US cities. However, Via managed to seize a part of market share by providing the solution to relatively higher fares. The only tradeoff was the fact that passengers traveling to the same locality had to travel together.
Identification of appropriate taxi business model requires assessing consumer demand. A market saturated with taxi companies may still be a decent choice if your business idea presents a unique feature that addresses challenges of passengers.
Competitor analysis is also essential in market research. This analysis is not an alternative to determining consumer behavior but a supplement to it. Competitors do not only enable you to highlight loopholes in the local taxi industry but also allow learning from their success.
Filtering the taxi business ideas
Evaluation of markets, assessment of consumers, and identification of competitors’ limitations allow you to make a list of ideas and filter the most effective ones out of them. Some of the most notable ideas emerged in recent times include:
Shared taxi or carpooling
Low-income regions are not the only ones effective enough for carpooling. The metropolitans including Chicago, New York City and Los Angeles are also proving to be productive grounds. One significant reason is the fact that passengers can divide costs without having to acquire public transit systems.
Carpooling is also noteworthy because governments around the world are encouraging it to reduce traffic volume and preserve biodiversity. Research confirms that rideshare businesses are likely to pass through registration and licensing stages far quicker than traditional taxi companies.
Venture capitalists as well as angel investors are more inclined to fund businesses aiming shared mobility model. Thus, shared taxis are likely to secure a significant capital influx at the earliest stages.
Taxi for Dedicated Customers
Instead of waiting for passengers to reach your driver and book a ride, a dedicated customer-base is a considerable option. School and college buses usually cover only a selection of routes. A large number of students require a ride to reach one of the pickup points. Dedicated rides can fill up this void by moving students between their residence and bus pickup points.
Similarly, you may also provide dedicated services to corporate and public sector employees. Another model is to offer services for dropping and picking passengers from airports. This service does not require fixed customer base. However, airport location remains fixed.
One of the decisions to take prior to starting a taxi business is to determine whether to keep a fleet or not. Most taxi companies operating in US metropolitans own vehicles. However, on-demand apps including Uber and Lyft are register vehicles from private owners. Although both models have pros and cons, yet latter is relatively better. It requires sharing profit with vehicle owners in return of prevention of purchase and maintenance costs.
Taxi Dispatch software
It is highly unwise to adopt decades old taxi strategies when on-demand taxi apps are making rounds even in the least developed countries. Current business requirements push entrepreneurs to take services at consumers’ doorstep instead of forcing consumers to perform most of the work. Entrepreneurs sticking to traditional services end up in suffering from business failure.
While going back to old-school taxi strategy is out of question, the choice to select the features of dispatch software remains with you. Some on-demand ride-hailing companies including Uber provide exclusive vehicles as well as carpooling while others like Via offer specific services only.
You can decide to broaden the scope as much as the budget allows, but need to ensure that the app includes features which are essential for on-demand taxi business. CabStartup platform provides a number of pre-integrated features for entrepreneurs who rebrand our platform as one of their businesses.
Some of the most notable features of this platform includes following.
App for passengers: This app enables customers to make a profile, view the data of their past, ongoing and upcoming rides, and pay via one of the payment options.
App for drivers: Each driver can have a unique profile as well with a range of features including ride acceptance and cancellation, communication with scheduled passenger and information regarding earnings of the day, week, and month.
Admin and Dispatch Panel: Although software is able to automatically connect passengers with the nearest drivers, yet admin panel allows surveillance. Administrators can also update preferences depending on customer’s urgency. Dispatch panel enables the platform to dispatch the most suitable taxi for requesting individual. The suitability depends on customer’s location, type of requested service, and driver’s consent.
Route Optimization: AI-based route planning considers aspects including traffic volume on various roads, distance to reach destination, and quality of roads on each route.
Data Analytics: Any on-demand business requires extensive data analysis techniques to determine growth over time. An efficient set of techniques would share the high-performing areas as well as those failing to perform up to the mark.
Process Automation: In a traditional setting, a customer would call taxi company to schedule rides, share feedback, lodge complaints. The admin and other staff members would perform these tasks manually. However, CabStartup platform automates these tasks and promises to perform them in negligible time with remarkable efficiency as compared to humans.
One of the upcoming articles shares details on marketing of taxi business. You would love to experience our platform. Get on-board right now because it is absolutely free for evaluation.