How Taxi Booking Mobile App Businesses So Profitable

The online taxi booking industry has grown at a rapid pace in the last decade. Much of that growth can be contributed to the simultaneous rise of smartphone, mobile apps and GPS technologies.

According to Statista, ride-Hailing & Taxi segment amounts to US$316,908m in 2020 and is expected to show an annual growth rate (CAGR 2020-2024) of 4.5%, resulting in a market volume of US$377,817m by 2024. In global comparison, Asia pacific region has the fastest growing market and is expected to reach $53.8 billion by 2023.

There are many new players entering the ride-hailing segment all the time in different parts of the world

Let’s take a look at the top taxi booking mobile app businesses in the market right now:-

• Uber

• Lyft

• Grab

• Ola

• My Taxi

Of all the businesses mentioned above Uber is the most popular with its presence in 65 countries and 600 cities worldwide.Currently Uber has a market volume of $72 billion. Still, despite the dominant position of Uber and other popular ride-hailing companies, plenty of startups continue to enter this highly profitable niche.

Also Read :- https://www.fatbit.com/fab/guide-to-build-an-app-like-uber/

The stomping grounds for such startups are generally the cities that haven’t yet witnessed the introduction of ride-hailing services and as such offer little to no competition. Such locations offer perfect opportunities for startups to test their ride-hailing business idea; here startups, especially those from the same region can apply their local knowledge to best effect and start generating popularity for their solution.

Why are Online Taxi Booking Businesses Surging in Demand ?

Ride-hailing services are quickly becoming ubiquitous in all the major cities around the world. Following are some of the factors that contribute to the popularity of online taxi-booking businesses:

• Online-taxi booking apps are quite easy to use. Now travelers can book nearby taxis online from any location just with few taps on their smartphone.
• Online taxi booking businesses offer various kinds of discounts, allowing riders to save on their travel, which ultimately adds to their appeal.
• Online taxi booking businesses have created job opportunities
• Online taxi booking businesses offer a range of car models to book from. It’s a great option for riders who are particular about travelling in specific types of vehicles.
• Entrepreneurs can manage operations online for the entire fleet from a single location.

Why Offline Taxi Businesses Should Adopt The Online Mode?

Given the rising demand for on-demand taxi services, the offline taxi booking businesses should consider going online. By embracing the mobile app technology to power their business, they can realistically multiply their revenue and reach a user-base that’s currently aware of their services.

How Does an Online Taxi Booking Business Earn Money ?

This is the question that most entrepreneurs grapple with when looking to start an online taxi booking business. So without further ado, let’s discuss the revenue channels of online taxi booking businesses :-

Commission

Commission on rides is the main source of revenue for any taxi booking businesses. Ride hailing companies charge a certain percentage of earning from drivers. Also, customers pay into the platform for using the services at the time of booking.

Surge Pricing

The fare on rides is increased from normal during peak hours or certain situations when the demand is high such as in bad weather.

Advertisement

Advertisement is also a vital medium to earn money for online taxi booking businesses. They partner with big brands to advertise their products or services through the platform.

Cancelled Rides

Online taxi booking businesses set a certain time period within which the customers can cancel the rides booked by them. Once that time-window lapses, the customers have to pay cancellation charges.

Luxury Cars

Some customers like to travel in luxury cars. Such rides are available at premium prices and serve as a major revenue generation channel for ride-booking businesses.

How to Start Online Taxi Booking Business

To start an online taxi booking business, first of all entrepreneurs need to do market research about the region where they are trying to start their business. The region needs to be well suited for the growth of a ride-hailing startup. At the very least, the following two criteria should be fulfilled.

• Availability of drivers within the region
• Fewer or no international players within the region

Once the market research is done you need to come up with a strong USP for your online taxi booking business. Entrepreneurs need to understand the customer behaviour to create a USP for the business, which going forward can also help differentiate them from other players in the market. To start an online taxi booking business entrepreneurs need to launch a taxi booking solution consisting of a rider app, driver app and a web admin panel.

Using a Readymade Solution

Using a white label and customizable taxi booking software such as VivoCabs is a perfect solution to kick start your mobile app business.

A readymade solution can not only save thousands of dollars that are spent on custom mobile app development but it can also give you speed to market which can be the difference between success and failure of your ride-hailing business. It offers you all the key features that are needed to run a taxi app solution, enabling you to gauge audience response and adjust your successive product development/marketing strategies accordingly.