Taxi Apps Need To Look Globally

Eugene Suslo
Apr 14, 2015

The landscape of the taxi industry is changing and changing rapidly. There is really one force which has sparked this astonishing change, and that is Uber. Really, it was Uber that started the disruption with a ride hailing app, but it is now the job of taxi companies to finish it. There is no better place to do this than in the markets where Uber is being halted, or is not in, and that is in the “developing world.” Each time that Uber decides to move into a new country or market it seems that it is met with steep opposition from not only the existing taxi industry, but also from governments. This is where the local companies have the advantage. The local taxi companies are already operating in there respective markets, legally, and with customers. What Uber has done is opened a new world of how to hail a taxi, and with name recognition it is going to be more and more an expected form of hailing a cab. No longer are customers going to want to be standing on a corner. This is where the taxis should embrace the taxi app and compete with the main Uber advantage. This can be done in the emerging markets and developing world, as well as any markets that Uber is currently locked out of, such as Europe. This is the time for the taxi industry to finish what Uber has started and transform all taxi hailing to an app.
To understand why this is the case moving forward, we need to take a look at what the market and taxi industry hold in store for the future. It is most likely going to be one that is filled with taxi Apps. These taxi apps will be able to bring the taxi companies the ability to compete with the likes of Uber, as well as keep up with the changing industry. This is a change in the industry which is being embraced by consumers, who really think this is a breath of fresh air. This is a changing industry where mobile payments are the norm, and rating your driver and selecting high rated drivers is what consumers want. This shift in customer service is important when there is going to be extreme competition, as well as very transparent competition. Also, this change is leading more consumers to want to request a car based on their GPS location, and not from waving down a cab from a street corner. The taxi apps will satisfy this demand, and we are going to take a look at the market and see where taxi apps can satisfy the demand.

The Global Taxi Market

The global taxi market is huge and one that could potentially grow. taxi usage globally can be estimated at roughly $100 Billion. Yes, that is billion with a ‘B’. This is taxis in the developed, as well as developing world. The developing world surely has its eyes on the taxi app movement, seeing as it is increasingly having Uber move into their markets. Whether it is South Africa and Uber taking over existing taxi companies, or it is Uber launching its own Rickshaw company in India, there is more and more interest in these markets for growth. This is why we know there is a global market for taxi apps. Taxi apps can take advantage of the large industry, as well as assist the taxi companies in competing with Uber.

A look at the Taxi industry in the United States can paint a small picture as to what the Taxi battle and landscape can look like. The Taxi industry in places like New York have actually been surpassed by Uber drivers. This means there are more Uber drivers in New York City than the iconic yellow cabs. To some this is frightening and to others this is just the changing landscape. One of the reasons for this change is the desire to hail a cab with a mobil app, which the decline in the Taxi market and increase in the Uber market validates this desire. So with an estimated global market of $100 Billion, the Taxi industry looks like a very attractive place to carve out a piece of the pie. This is where the future of the taxi market will be headed, and that $100 Billion will be split between the Uber’s and taxi app companies of the world.

Taxi App Usage In Developing Countries

Taxi App usage globally is increasing, and if you include Uber it is increasing at an unprecedented rate. Seeing as there is really no accurate data on specific app usage and non app usage in the developing world, we are going to take a detour to Africa and look at how they have adopted mobile payment years ahead of places like the U.S. and Europe. By taking a look at mobile payment solutions in Africa, we can see the market potential of mobile solutions for payments, and use this as a benchmark for taxi app demand.

Africa has truly adopted mobile payment and it really came out of necessity. There was no easy way to transfer money to friends or family, as well as pay for goods. This came out of a banking issue. Enter a solution, which was mobile payment. Consumers and businesses adopted this rapidly and it is now normal and wide spread through out Africa. What does this mean for mobile payment and Taxi apps? For mobile payment it means that places like Europe, where the development is starting should take some tips from Africa, but thats a different discussion. What it means for our discussion is that Taxi Apps have a huge place in the consumer market. The desire of consumers to pay via mobile phone, which is already occurring, means that the only integration is to add cab hailing abilities.

So after looking at Africa there is much demand for paying via mobile phone, and if we look to countries like China, and the U.S. there is a large demand for consumers to want to hail a ride via mobile phone. This means that Taxi Apps need to provide the service, as well as Taxi companies need to invest and begin to compete with the likes of Uber.

The Uber Challenge

Uber has a very big challenge on its hands, and that is it is a disruptive technology. With being a disruptive technology, there is going to be strong opposition from the incumbents. Unfortunately for Uber, these incumbents have a very strong union, as well as a very close tie to regulators, typically through lobbying. This means that Uber is disrupting an industry that is “in bed” with regulators. There are a lot of people with a lot at stake. This being the case, Uber needs to navigate the legal landscape of each country that it enters into. This is time and money, and for the Taxi industry this is an advantage. An advantage that can be capitalised on if energy is put to it rather than fighting with Uber over legal issues.

Uber is also facing another big challenge and that is the growing amount of bad press. This press is no doubt fuelled by people who oppose the service, but unfortunately for Uber it means that it has the possibility to lose customers. Customers who view the company as operating illegally, as well as unethically. Now the Uber benefit is that it has a seemingly endless stream of money, which is from companies such as Google Ventures, so these road blocks will not last forever. Also, it cannot be ignored that the taxi industry has had its fair share of bad press in the past and there was already a negative sentiment to Taxis, which lead customers to Uber. With this all being the case, it is still possible that taxis can win the taxi war, as well as regain its lost customers.

The Local Advantage

Taxi companies have a huge advantage that no new comer to a market can have. This is the local advantage. This is the advantage that could allow the taxi industry to win the war in the developing world. Having the regulations in place and already operating legally, as well as having the customers, taxis just need to incorporate the Uber way of doing business. The Uber way of doing business is in essence making payment easier, calling a cab easier, as well as providing better customer service. These are all very easy things to accomplish if the correct steps are taken, but the taxi industry needs to be open to embracing the changing industry and compete. To this point the industry has not been able to do this, but rather just try to block Uber from entering the market so that there can be no change.

The best way for the local advantage is for the taxi industry to adopt one of the numerous taxi apps that are coming to market. This will allow a taxi company to operate such as an Uber. This does not mean build your own taxi app, because that will isolate your potential customers to your local market. Work with a taxi app company on a global scale so you can have access to your local customers, as well as the global customers. This is how the taxi companies will be able to keep up with the Ubers of the world. It is not just using the app in the local market where the local taxi has the advantage, but being able to use the app while traveling. So taking this local advantage and adopting a taxi app will allow the taxi companies to maintain their local advantage and give customers less reason to seek the new comer to the market.

Taxis Should Act Now

With the sheer volume of negative press coming out about Uber, as well as regulators becoming wise to the way Uber operates, the growth to new markets and countries is going to be slightly slower than the past. For the taxi apps, this is where the taxi app companies need to aggressively pursue the markets that Uber is locked out of at the moment, which most likely will not be long. Also, this is where the taxi app companies need to pursue the emerging markets where mobile payment is hot, as well as there is no Uber competition. There is a lot of ways that the taxi app companies can take advantage of the gaps in the Uber network and satisfy the new demand for mobile taxi hailing.

The taxi companies now have the more important task, which is to adopt the taxi apps product. Whether it is in Africa, or Indonesia, there is most likely a company that you can work with. The need is to beat Uber to that aspect of the ride hailing service game. It will take a large advantage away from them, and keep your customers happy, as well as make your dispatching of taxis easier. It is the time to adapt and move forward with the industry instead of falling like so many companies have where Uber has had the advantage. The market size and profit to be made is there, as we have seen with the $100 Billion global taxi market.

With the time being now to act with both the taxi app companies, as well as the taxi dispatch companies, this is how the taxi industry will survive a huge disruption such as this. A disruption that is changing the way consumers look at the industry, as well as the way taxis need to operate in the industry. Regulators are also having a difficult time keeping up with the changes, and in some cases being opposed to it. With this outlook on the industry and the potential to come out on top in local markets, the time is now to transform and adopt the with taxi apps.