(English) Bahrain Taxi Success Story

Natalia Korol
фев 23, 2017

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The reduced rates strategy that earns drivers more money — Bahrain Taxi success story.

bahrain taxi success story

About the company: Bahrain Taxi has grown to be one of the most widely used taxi service providers that offer rides in Saudi Arabia and across the island.

Size: 577 drivers

Active application users: 10,000

Founding date: 2011

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Challenge

Bahrain Taxi placed a request to develop mobile applications, that would make it easier for drivers and passengers to book and track rides. Previously the company was reliant upon alternative solutions and apps that were not built for taxi business, but after a period of time, it became impossible to grow and expand without an advanced technology behind.

Bahrain Taxi founder Waleed Fakhroo noticed: ‘We’ve chosen TaxiStartup after trying most of the famous cloud-based taxi management solutions around. Firstly, we were attracted by the friendly interface, which was almost exactly the design that we were looking for. But the main factor for taxi fleet management solution is the tracking quality and vehicle position’s accuracy. What is more, TaxiStartup software is a customizable platform, meeting all the requirements of a specific company.’

bahrain taxi success story
When Uber began to appear in Bahrain, not many entrepreneurs knew how to beat this growing transportation network and win the market.

Solution

Cutting Off Rates = Making More Money?

For those who haven’t heard of this trick, it’s a pretty interesting strategy. What this strategy involves is using the same vehicle class with different rates.

Thus, Waleed created 2 vehicle classes: Premier Taxi and Promo Taxi, consisting of same cars and same drivers. The only difference was in rates and pricing.

• Premier Taxi charges the passenger on the government meter and provides the advantage of future bookings.

• Promo Taxi uses a virtual taxi meter with its own rates that are cheaper than the government meter.

As you can imagine, nobody likes having their pay cut. That day was not a happy day for drivers. But Waleed was sure that lower prices would increase demand and, thus, allow drivers to make more money.

Result

There are still a number of drivers who do not want to make discounts at all. But Waleed doesn’t force them, as he wants to keep all the drivers.

The drivers have the possibility to enable an additional vehicle class if they want to take extra orders anytime in the driver app.

As time goes by, this change becomes inevitable:

1. Influx of Promo rates orders

The drivers who haven’t accepted the promo rate at the beginning started to change their mind on seeing their fellow drivers making more money with lower rates.

2. Two rates for passengers’ choice

Cheaper rates but high waiting time or premier service with more cars and minimum time to wait.

bahrain taxi success story

According to Waleed’s data, most of the customers prefer to wait 5-10 minutes more and get a cheaper rate even if it’s just 15% — 20%.

The new Promo pricing attracted a big number of new passengers who hadn’t used the local taxi service before as they couldn’t afford the official standard taxi meter rate. The customer influx resulted in more jobs and profit increase for drivers.

With this strategy, Uber loses the battle now. Even if Uber cuts the rates, it may increase the demand during the slower times, but it doesn’t solve the problem of taking orders in the areas where they have no cars, regardless of what the demand is.

‘We do not have that, no matter what the demand is, the passenger is getting the same rate within two options,’ assures Waleed. ‘With 500+ drivers, we have the ability to cover the whole region.’

P.S. If you would like to share your story with TaxiStartup society, please feel free to contact me at natalia@taxistartup.org