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Unsustainable Taxi Startups in a Prosperous Industry

Since the inception of smartphone revolution, an impressive number of startups made their mark on various industries. There is a significant increase in the rate of emerging businesses owing to the remarkable developments in technology. Taxi app companies alone are the reason behind an industry worth $40 billion. However, many taxi startups fail to sustain for longer periods due to inflexibility in the business models.

One of the previous articles explore the reasons behind the most successful taxi app solution. Contrarily, this article discovers the causes of failure – specifically, due to the deficit of sustainable policies. It also mentions brief case studies and recommends an appropriate path to ensure sustainability. Although a substantially high number of taxi businesses flopped, yet this text emphasizes the ones which nosedived after making a decent start.

Lack of persistence remains the primary cause behind flopped cab startups.

Karhoo

It was a promising initiative started in London. It raised sizable funding within weeks of its launch. The taxi app attracted over 0.3 million users in the first couple of weeks. The business model was disparate to the existing companies but was favorable. It did not challenge the established operators since Karoo did not keep paid drivers. Instead, the London taxi app complemented the competitors’ productivity by finding rides for them and got a commission in return.

However, Karhoo went into bankruptcy in less than six months after making a dream start. The executives invested in subsidizing the rides to increase the user-base since they were expecting funding from multiple sources. Although the company was attracting investors, yet none of them promised the cash flow.

Consequently, the taxi app business ran out of money. The employees worked without salaries for few weeks before succumbing to the impending bankruptcy.

Sidecar

Analyst labeled it as one of the fiercest competitors of Uber and Lyft. One significant element that distinguished this on-demand taxi service from the giant competitors was the ability to incorporate new features. The features like rating drivers and choosing the driver of choice apart from others made the company stand out. These driver friendly policies were highly praised in the industry.

However, Sidecar failed to address the problems of users – the actual force behind the business. While Uber app and Lyft allowed booking in three taps, Sidecar required traversing through multiple choices before finally getting a ride. In an industry where most of the consumers require quick actions, Sidecar took few minutes to schedule a ride. The time driver took to reach the pick-up location was aside.

Uber in Korea

Despite making impressive gains around the world, Uber failed to attain traction in a developing country as good as South Korea. In all these years of Uber’s global success, it could only introduce and sustain UberBlack in Korea – that too up to a minimal extent. The core cause holding Uber is the firm grip of the local taxi union and strict regulations from government.

Amid such circumstances, CallBus – a local startup – successfully started and consolidated its position. CallBus founders learned from the case of Uber and introduced a service which did not pose a threat to taxi businesses. It offers only the night time services. During these hours, the number of taxi drivers is extremely low, but the passengers are somewhat higher.

In-depth Failure Review

The primary reason for failure of Karhoo was the lack of sustainable funding. The company made excessively ambitious plans considering the initial influx of money. However, it choked in the long-run as investors delayed the promised money. Taxi app industry requires promotional packages to attract customers, but this practice should not stand at the cost of entire volume of bankruptcy risk.

The acquisition and successful remodeling of Karhoo by Renault indicate that solid funding source can sustain business considerably long time.

The case of Sidecar indicates that the on-demand taxi companies should emphasize customer journey map – the hypothetical paths which customers travel to acquire services. Sidecar introduced many exciting features which the top taxi apps could not offer by that time. However, it missed on one of the crucial elements – customer facilitation.

The case of Uber presents a significant factor for the success of any startup – the respect rendered to and collaboration with the local community. The government disregarded the stature of Uber and all the facilities that it could bring to the riders in favor of local taxi community.

However, CallBus is successfully running by targeting the areas where service was insufficient to meet the demand. Apart from night-only services, the company employs taxi drivers who are helping them in attaining support in the taxi union.

How to sustain business in dynamic taxi app industry?

By considering the three cases and a bunch of other studies, one should ensure that the startup complies with the following principles.

  • Avoid expansion in regions where an adequate amount of funding is unavailable. One should make sure that the prospective investors make an investment before starting on an ambitious plan.
  • Cosmetic changes in taxi app should be among the last features to add. The on-demand cab startups should strive to eliminate any shortcomings which prevent customers to prefer the service over its rivals.
  • Regardless of the size of business, the local regulations the primary factors to consider while scaling up. The service should be tailor-made to cater to the specific needs of the local community.
  • The companies should ensure to embrace newer promising technologies. It is notable that technology, which disrupted the traditional taxi business, can uproot current businesses too. Thus, the incorporation of technology is essential. Uber already revealed plans to introduce flying pilot-less taxi to address the growing traffic concerns.

Invest Where it Matters

It would be highly inappropriate for a taxi app business to flop despite knowing the causes of failures. The demand for services is big enough that arrival of many new successful startups will not create saturation. All a business enthusiast needs to do is to ensure the facilitation of customers and to invest in the appropriate technologies.

Your taxi startup should not lead to failure as long as CabStartup is the underlying platform. Start your free trial today to evaluate our platform. Let’s grow together!

By Shahrukh Satti 0 Comments

Overcome Tough Regulatory Hurdles For Your On-Demand Taxi Business Just Like GRAB!

On-demand taxi service is all about providing quality ride experience and meet the needs of local customers. If startups fulfill the requirements of local customers and ensure security, they can become a successful taxi business owner and can capture a significant share of the market. When you are running a taxi company you need to consider several regulations to operate in a specific region. Learn from the success story of Grab that was able to overcome the tough regulatory hurdles and become a successful company in Malaysia. 

The Success Story of Grab: A Taxi-Hailing Service in Malaysia

CEO of Grab taxi-hailing services was working as a manager in Malaysia. He decided to start a taxi business as a hobby by providing secure and affordable on-demand transportation. The name of his startup is “Grab Taxi Hailing” that is popular in Malaysia. A simple philosophy behind Grab’s taxi-hailing company is to Solve Local Problems.

Just an online research has led “Grab taxi” to what they wanted: a white label taxi booking app with a feature set needed to satisfy the customers and use of modern tech has become the reason of their success.

Just think for a moment. You’ve left with some friends in the pub. You look for a taxi and find nothing down the street. You are left helpless in a miserable drizzle, which is one of the common scenarios that led to the birth of Grab taxi in Kuala Lumpur.

After three years, the company’s app downloads reached to 11 million and 200,000 drivers were associated with them across six countries, and the number is still increasing. The success of Grab in Malaysia has even been better than Uber in the southeast Asian market.

CEO of Grab taxi company says: “People trust us because the quality is sustainable, the technical solution is reliable and functional, and drivers are well-trained. Our drivers arrive on time, almost never cancel orders, and behave like friends, which is the only way to provide a service that people will love.”

In Malaysia, where ride-hailing tech is just starting to evolve and becoming famous, Grab Taxi is already providing world-class services. The Ministry of Transportation and Communication is realizing that Grab can provide outstanding services all across Malaysia. Though they faced some tough times in start regarding the government regulations, they overcame the regulatory hurdles to become the best ride-hailing service of Malaysia.

  • Grab success is fueled by user satisfaction. Users are delighted with their services as they do not need to face parking issues while shopping.
  • Grab taxi provides customer support and solves their problems by addressing their queries. As a result, they get satisfactory services and peace of mind with their services.
  • The high quality of services has ensured its popularity. The future of Grab taxi is seemed bright and successful as they are fulfilling the demands of a successful business.

Grab taxi provides a mobile booking app for customers to book from a list of available taxis. Customers have various booking options with it, like booking a trip in advance, calculation of fair, GPS tracking of an arriving cab, shorter waiting time, etc.

The reasons behind the success of Grab taxi service is their white label solution to manage taxi services

  • Efficient car conditions
  • Well trained drivers
  • Quality white label solution for taxi booking services
  • Customer queries support
  • Efficient staff

The company also motivates drivers by offering various promotions or special discounts and many other actions.

Uber Business Model

How to make Taxi Hailing Company Successful?

Making people satisfied with the taxi service is a big challenge for taxi companies that they can fulfill with a quality end to end services under one roof. If you want to start a taxi business, you should know how to manage on-demand taxi business by overcoming the challenges and making it successful. Below are four main factors that are responsible for making a taxi company successful:

  • Stable solution:

It is important to provide a stable solution to customers that enables them to book a taxi easily at a suitable-fair. An efficient white label solution provider company can deliver a stable solution to business owners; therefore, it is very important that you choose a reliable company to provide a stable solution for customers.

  • Strong operations:

Providing strong operations is very important for business success. As the competition is fierce, keeping your business operations and service string is quite essential to stand out in the game. Using an efficient system for your taxi services is very important. If you want strong operations for your taxi business, you need to consider excellent Car condition, responsible drivers, customer queries, and outclass services

  • Marketing

Marketing your taxi business also play a significant role in making or breaking a company. Marketing techniques bring your available services in front of potential customers that increase the chances of bringing more business.

  • Safety and Security:

One of the problems Grab solved is of safety. Grab come up with a solution to meets the needs and desires of users and take care of customers’ safety and security.

Passengers in these countries prefer booking bikes. Therefore, they aim to launch the region’s first bike booking app in Malaysia, Vietnam, and Indonesia that do not stick in jams and reach the destination in less time. The company is not in tight competition with Indonesia’s Go-Jek, predicting that they will capture 50 percent of the market share in the motorcycle taxi segment of Indonesia. But Grab’s recent track record makes it hard to dismiss.

Grab’s Tan Hooi Ling identifies passion as the essential ingredient for every individual who is thinking of starting a start-up because they want to solve problems of people, provide them trusted services. If you have an idea of taxi startup, you can move forward to start this business successfully.

Finding an ideal technical solution for the app-based business is possible by finding a white label service provider company that provide efficient solutions. We provide white label ride-hailing systems for startup companies. You can get a white label taxi app solution from us that works efficiently in booking a cab. We provide a permanent solution and end to end services under one roof that will help you to operate your business well. If you want to know how to manage on-demand taxi business, you can signup for a demo to grow your taxi business.

By cabadmin 0 Comments

What is the importance of marketing in making a Taxi Company successful? (Hint: Avoid Bad Marketing).

Over the past few years, app-based taxi companies are increasing in number rapidly. Not only there is an influx of new Taxi App Companies but the overall industry revenue is also growing. Latest trends show that the revenue in the ridesharing segment amounts to US$17,191m in 2018, which is expected to rise to US$30,329 by 2022.
revenue stats in the ridesharing segmentThe industry stats are favorable for taxi businesses. However, all new taxi companies could not become successful. What is the reason?
The answer is quite surprising: Very few business owners are ready to market their services like Uber to become successful. However, they want to get the market share which Uber has captured. Crazy, right?

The ride-sharing market is comparatively saturated in 2018, which shows the significance of marketing for every new taxi company to compete against market giants such as Uber and Lyft.

In addition, the graph below showing consumer behavior illustrates that most of the consumers buy from the brands they trust. Do you know how to develop trust for your brand? It’s about communicating your brand message, which is the result of marketing activities.
People that buy from trusted brandsTherefore, companies without marketing are doomed in the long-run. In reality, those businesses often lead to failure after a few months of operation. We at Cab Startup, care the most for our clients’ business success. We provide an all-in-one on-demand technological solution, which can enable you to conduct effective marketing activities.

How Bad Marketing Techniques Effect Ride-Sharing Business?

Firstly, marketing is the key to attract clients to your business. Hence, without a good marketing plan, making efforts to grow your business is in vain. Lack of marketing activities leads to business failure that vanishes in disgrace.

Ignoring marketing is a wrong decision and a big obstacle in your business success. In other words, you can say that investments in marketing is the investment in the company’s long-term growth and success.

Bad marketing comprises of various forms and shapes that include inappropriate logo or icon, poor social media campaign management, lack of app store optimization techniques and a lot more. Poor marketing techniques can destroy your brand image and customer acquisition efforts.How Bad Marketing Techniques Effect Ride-Sharing Business?

Marketing Mistakes Leading to Taxi App Business Failure:

Giant companies celebrate their success because they have a clear target, plan and marketing activities. Reasons for the new taxi businesses failure is associated with no clear objectives, no clear target, and no brand language.Marketing Mistakes Leading to Taxi App Business Failure:Here is how marketing mistakes can lead to business failures:

  • Very often, companies think that marketing is not more significant and can be addressed later.
  • Marketing strategy is carried out without proper planning and goals.
  • Business decisions are made keeping in mind short-term benefits only
  • Business owners have no interest in researching the target audience.
  • They ignore planning a budget and a road-map for success.
  • Launch the services with a non-branded app.

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Consequences of ‘No Marketing’ for Taxi Businesses:

Small businesses consider marketing expense as an extra burden that is not important for business survival. They think that the budget for marketing is a residual. Moreover, they keep branding for a later stage, which is a big mistake as people cannot recognize the company and taxi businesses stay behind in promoting their apps.

At the later stages, bitter reality comes in front of the business owners when revenue does not increase according to the expectations and planning, that marketing strategy they adopted was panic-driven and unproductive.
Consequences of 'No Marketing' for Taxi Businesses:

Effect of ‘Random Marketing Activities’ on your business growth.

Is doing random marketing stuff the only marketing strategy for your taxi app business? If this is true, then doing nothing for marketing is better than performing random activities. You should realize the importance of a proper marketing plan and strategy.

Random marketing operations affect your taxi business by:

  • Unimpressive results. If you make marketing campaigns and design activities solely on your intuitions then it can have adverse effects on your set KPIs.
  • Failing to achieve your targets. Guesswork will waste your time and money. You might fail to grow your customer base and revenues.
  • Investing in everything ‘marketing’. If you are investing in every marketing channel, you are wasting your marketing budget. [Key takeaways: Focus on marketing channels that work best for you and your target market]

You know what? Research and data analytics is the base for creating a good marketing strategy. If you have not defined your set goals and path to achieve the targets, then you might develop a negative perception for your taxi business among your customers.

Trust is the key element to acquire customers for a longer period of time. Remember? You can develop solid trust only with a defined marketing plan and strategy.

Role of Successful Marketing and Taxi App to Ensure Success:

Implementing basic marketing techniques is the initial step. The next step is to apply advanced marketing techniques depending on real-time data. Making decisions purely on guesswork often fails. Find real-time data to know your clients and their needs is vital to move towards success.

Market analysis is essential for decision making rather than doing marketing on assumptions. Doing a thorough research of important marketing techniques that can bring good results or hiring a taxi app white label solution provider and marketing company to do the job is a wise decision.

A successful business requires marketing based on real-time data, implementing strategies, and the use of a white label solution for your taxi business to get long-term success. It ensures that your business will get more returns over investments.
To ensure taxi business success, you need to:

  • Do research thoroughly about the target market, competitors’ position, and make a marketing plan before launch.
  • Set a budget for marketing activities.
  • Choose professionals to do the branding at least for the taxi booking app and website.

Conclusion:

Do market research and make business decisions using the facts and analytical data. Consider the market specifics and the characteristics of your target audience to forecast ROI. Decide on a marketing budget and hire a professional company for marketing services and taxi app white label solution. If you want success in your taxi business, signup to get outstanding services today.

Uber Business Model

By cabadmin 0 Comments

Why startups fail and how to run a successful business

How to Run a Successful Business

Generally speaking, more startups eventually fail than succeed, and while it is sad to see an idea fail it is also crucial to learn from the failure. Usually, the question becomes ‘what factors contribute to why startups fail?’ But the more appropriate question should be ‘what we can learn from failed startups?’ More often than not, some reasons contribute to a startups failure, and these same reasons are learning opportunities for you to improve the chances of success for future business ventures. The purpose of this article is to learn valuable lessons from failed startups, understand why startups fail and how to run a successful business by applying these lessons. Below are the lessons you can learn from failed startups:

1. Receive customer validation for your product/service

One of the main reasons why a lot of startups fail is that they produce their product or start offering their service without even first making sure that the customers in their target market want what they are offering. Therefore, before doing anything else, make sure that you understand your customer’s wants and needs without copying what some other company is providing or has attempted.

As an entrepreneur, you should always do something that is unique and different from the competition. Embrace that and always test your service or product on a small scale before going big and spending too much time and money.

Cost to build Taxi App Like Uber

2. Keep your operating costs as low as possible

At startup level, you don’t need luxuries like fancy offices and nice chairs. You should keep a close eye on every operating expense. Surprisingly enough, you can negotiate prices for almost all expenses. No matter how small the negotiated discount, take it because ultimately it will add up to a lot of saved money that can be used later on a rainy day, or rainy month(s).

3. Make sure you are not serving a small market

While it is essential to serve the market that is interested in your service or product, it is equally important to make sure that said market is not too small to support profitability or growth efforts.

Hence, it is crucial to remember that there is no such thing as too much market research on a startup level or any level for that matter. Market research can help you understand if the target audience will welcome your initial launch with open arms. Also, research the prospect for future growth and the efforts your competitors are making in the market.

4. Double down on sales when things get rough

When things get rough, the wisest thing to do is cut down on costs as much as you can. This situation requires you first to be proactive and then ready to do what is counter-intuitive. Spend more money on sales. Put all your focus on sales because if you have a decent product or service and you are still not generating enough revenue, then the problem is concerned mainly with sales. So, hire and invest in an excellent sales and marketing team.

5. Understand the importance of co-founders and put together the perfect dream team

An entrepreneur understands that he or she is not capable of performing all the tasks required to run a thriving startup. Specific duties may lie beyond a founder’s capabilities, so it is unwise to run a startup as a one-man operation; this is why most successful startups are a team effort.

Every member of the team brings a unique skill to the table and you, as the founder, should have the ability to put together a dream team of excellent individuals, and you should also be able to harness the team’s strengths to lead the startup to success. Technical skills, creativity, communication skills and other traits are highly valuable and should be sought after when putting a team together. Also, remember to allocate specific tasks to people based on their unique strengths.

6. Focus on the company’s finances

Raising funds can be an excruciatingly long process. You can pitch your ideas to over a hundred venture capitalists, and maybe only one of them might find it interesting enough to invest in, so be prepared to stare into the eyes of defeat on a regular basis before finding a victory.

Remember that without money you can’t sell your product or service to even the first customer. You also need enough funds to keep your startup alive till you are healthy in profits and additional funds may be required for growth, emergencies, etc.

7. Marketing, marketing, and marketing

Assume you have an excellent product or service that caters to a broad market which is readily willing to accept it, but your startup still fails because the audience does not know about it; a primary attribute contributing to this failure is an ineffective marketing strategy. Many startups fail because they do not invest too much in marketing and rely on word-of-mouth alone. Word-of-mouth can only get you so far, so you should plan a massive and effective marketing strategy.

The internet is an excellent tool for digital marketing, but it is advisable for you to hire marketing professionals with experience in digital marketing who can bring you the benefits internet marketing has to offer most cost-effectively.

Final Thoughts

As you can see, failures can prove to be valuable learning resources, and the lessons they teach are essential in how to run a successful business in the future, along with following other good startup practices such as writing a good business plan, etc. However, it is still best to learn from the failures of others so that you avoid failures of your own.

By cabadmin 0 Comments
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