Why Drivers Cancel Orders and How to Reduce Money Losses With Cancellation Fee

Natalia Korol

Nov 04, 2016

 

 

One of the reasons a taxi company can endure severe money losses is through order cancellation on the driver’s side.

Any company owner’s objective is to get the most net profit of his business. Rat racing for ways to make more money and expand their business owners often miss out on one thing – maximizing revenue is also about minimizing losses.

One of the reasons a taxi company can endure severe money losses is through order cancellation on the driver’s side.

According to the recent statistics made by TaxiStartup marketing department, the average figure for driver order cancellations is around 12% of all orders. That’s a pretty big piece of a pie to tag operational side effects and just disregard.

canceled orders
Percentage of orders canceled by passengers vs drivers.

Order Cancellation Reasons

Drivers’ feedback shows that the most frequent cancellation reasons are:

1. The driver goggles the accepted order location and:

– finds it too far off;

– the order falls on a rush hour.

So, he cancels not to get stuck in traffic and risk order cancellation from the passenger as well as a possible bad rating for late arrival.

2. The driver shows up and:

– waits over 5 minutes;

– can’t reach the client on the phone.

3. Some personal issue comes up and the driver is bound to cancel.
4. The system gives the wrong client’s location, so the driver arrives, calls and finds that the passenger is in a completely different location.

Tips to Minimize Order Cancellations by Driver

Generally, company owners have little awareness of how to monitor, lower and penalize drivers for canceled orders.

Drivers, on their side, also have a vague idea about the efficient working algorithm within the driver application that will considerably reduce the need to press “Cancel”.

Let’s have a look at the list of the preventive methods for a company owner to minimize the losses:

1. Educate Your Drivers

The key point is to educate drivers to use the driver app properly. A good idea is to summon your drivers for an educational review of a driver’s manual and guide them every step of the way to handle all types of orders, their operational area and statuses.

working radius

Some handy advice you can give your drivers are:

– Don’t press ‘Accept’ if you are not sure it’s convenient for you to make the ride. You can still bid on it after checking the location if its still pending.
– Set your operational radius in your driver app as per your needs. That will limit the incoming distant orders.
– Track other drivers’ presence in the driver application map so that to examine ‘high demand’ areas and cover the locations with limited cabs presence.

2. Apply Cancellation Fees

The last, but not the least preventative measure to eliminate company money losses due to canceled orders is imposing cancellation fees.

If set in your company panel the cancellation fee logics is very simple:

The system will charge driver’s balance with a fee if:

– Driver cancels after accepting a job;

– Diver is delayed* for more than 3 minutes after estimated time of arrival (pickup time for pre-orders) and is farther than 200 meters from pickup location.

*Applies only if a passenger cancels order informing that there is no taxi.

Driver’s balance will not be charged, however, if:

– Driver cancels 5 minutes after arrival by selecting “No passenger” as a cancellation reason.

cancellation fee settings

The last, but not the least preventative measure to eliminate company money losses due to canceled orders is imposing cancellation fees.

Read the full article to learn how to set up the cancellation fee for drivers in the company panel.

3. Monitor Cancellations

You can track the cancellation rate for each driver on a weekly or monthly basis.
The ideal solution we offer is generating ‘Drivers report’. It can be downloaded from the company panel to your Google Drive. Simply navigate to the company panel and open the ‘Reports’ tab. Indicate the time period and press ‘Save to Google Drive’.
report-960

The report shows different statistics on every driver as well as the number of orders canceled by each driver.

If your driver cancellation rate is too high you might want to contact him and get first-hand feedback. This will not only make him aware of your concern but help you get an update on the cancellation reasons.

The Long Term Goals

For the improvement and maintenance of the service ratings, we highly recommend you oblige the drivers to study the TaxiStartup driver manual & handbook.