The main reason taxi companies fail to exist (spoiler: bad marketing)

Liz Shvyndikova
Sep 07, 2018

In the last couple of years, the number of app-based taxi companies is subsequently growing. Yet not all young companies manage to be a success. Why so?

The answer is rather surprising: buttoning up one’s pockets when it comes to marketing drags new businesses down. While everyone wants to know why is Uber so successful, very few are ready to market their services in the same clever way as Uber did. Crazy, right?

Taxi market is rather saturated in 2018, especially when you think of all the on-demand companies emerging. The presence of the market giants such as Uber and Lyft and a high competition level in the branch makes marketing a necessity for every young taxi company.

Besides, more and more consumer behaviour researches state that the new generation of buyers only buy from the brands they trust. Guess what? The level of trust is resulting from how the brand communicates, and this is about marketing.
importance of marketing in business
Turns out, companies ignoring marketing are doomed in the long-run. As a matter of fact, they are often unable to make ends meet after the first 18 months operating. No marketing and poor marketing are on the top list of the most wanted business killers.

At TaxiStartup, we care about our customers’ success. A beautiful technological solution is just a part of it. The real key to success is good marketing.

How bad marketing can influence a taxi business?

First of all, it is marketing that attracts clients to your business. Accordingly, without a good marketing plan, there’s no need for hiring drivers or growing your fleet. Lack of marketing activities makes businesses piteous no-names doomed to vanish in disgrace. Bad marketing, whether done consciously or unconsciously, equals to a very disadvantageous business decision. Marketing investments are investments in the company future.

Bad marketing comes in all shapes and forms. An old ugly logo or app icon, a dying Instagram account, a poorly planned social media influencer campaign, lack of app store optimization for your white label taxi app, you name it. All so easy to happen to anyone, all very dangerous for your brand image and customer acquisition.
why is uber so successful

Why bad marketing happens?

Poor marketing can happen for many reasons. Very often it’s simply because companies think they have enough more urgent challenges and marketing needs can be addressed later. Another reason for bad marketing strategy is the aimlessness of the marketing activities.

The first reason can be traced back to a short-sighted decision making. The second one is probably even more dangerous and usually demonstrates company having low interest in researching the target audience, planning a budget, and adapting to the market needs. And this is the highway to… well, to nowhere.

Marketing activities with no clear objectives, no clear target and no brand language are killing young taxi businesses. Uber (or any other giant company) is celebrating their success because they do know exactly what they’re doing: they target, brand, plan and measure.

No taxi marketing at all

Small and starting businesses tend to see marketing expenses as something luxurious they won’t really need at the early stages. There are many other things to do, and everything requires investments. Marketing budget becomes residual.

Consciously choosing to launch the services with a non-branded app is another poor decision taxi companies make. The logic behind it is clear: trying to save money on launch and invest in branding later. Unfortunately, it’s a wrong assumption, because launching with no brand hurts company recognizability and consequently holds taxi businesses back from promoting their apps.
why is uber so successful
At the later stages, total panic breaks out when it becomes clear the revenue is not growing as well as it was planned. Unfortunately, panic is not your friend when it comes to developing a meaningful strategy, and this is why panic-driven marketing cannot be productive by definition.
taxi marketing
What are the good practices then, if you wish to avoid these widely-made mistakes?

  • Have a marketing plan based on research already before launch.
  • Plan a budget for essential marketing activities.
  • Allow professionals to do the branding, at least for the most visible solutions such as the booking app and website.

“Doing random stuff” taxi marketing strategy

Recognizing how important marketing is for a business is the basics. Data-based planning of the marketing activities is the next step. You’d be surprised to know how many companies just do things and make decisions without any research whatsoever. What exactly does go wrong?

  • Targeting fails. Relying on a guess is not a good way to figure out who your clients are and what they need.
  • Thought-through strategy adjustments become impossible. When instead of analysis one is driven by feelings in their decision making, results are predictably unimpressive.
  • Investing in marketing activities becomes a “spray-and-pray” job. Instead of focusing on the channels that work, one goes on investing a little here and a little there. Frankly speaking, it’s a waste of money.

Here’s the thing: only research at all stages will allow you defining which marketing expenses are really necessary and which can be easily eliminated.

Successful taxi marketing strategy requires a lot of analytical activities carried out — it’s the only way to ensure there will be returns on your marketing investments. Do not believe anyone telling they can do the marketing in a couple of days, without a thorough research, at a low price.

Get your marketing strategy straight

Getting right to the point, researching plus creating a thought out strategy is the only recipe for good marketing. The “random marketing” approach is what makes taxi companies spend money on the nonsense that fails to deliver.
To start shaping a waterproof marketing strategy, use this checklist.

  • Start with mapping out all the marketing activities needed for your business growth.
  • Consider the market specifics and the characteristics of your target audience — this is needed to forecast realistic ROI.
  • Estimate marketing budget.
  • Hire professionals (preferably local) to carry out the plan. Working with a marketing agency helps to cut the costs and spare precious time.
  • Measure and analyse the results of the marketing activities (set KPIs and stick to them).
  • Adjust your marketing strategy based on the analytical data.

Of course, it’s much better to think of this all before the launch. The sooner a company integrates proper planning, researching and measuring, the greater the profit will be. But don’t worry: in case some bad marketing has already happened to your business, there are still chances for salvation. Just stop focusing on finding out why is Uber so successful and work out your own marketing strategy to take over the market

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