Modernizing the Taxi Industry

modernizing taxi industry
Taxi companies have been on a constant decline since the introduction of Uber. There is no city in the world, where the taxi companies have not been a follower after the introduction of Uber. In some cities, like San Francisco, taxi companies are meeting the fate any other business in a competitive industry without government support would face; bankruptcy.
We at Ryde do not claim to know the magic formula for reviving the taxi companies across the world, but what we do know is, with the future very clearly defined, taxi’s can start preparing now for the introduction of ride-sharing services in Vancouver. By bringing all the taxis onto a single platform that enhances the communication with customers, it probably will not prevent a decline in ridership, but it might prevent the eventual onset of a bankruptcy.

Startups like Ryde does indeed need a lot of work and effort in order to convince taxi companies to consider collaborating with the platform. However, that does not deter from the fact that we are still committed to modernizing taxi industry.

Companies thrive and cross the mainstream chasm if they continue to create value for its stakeholders. If we are to succeed in this transformation, our focus will have to be on the following actors in the eco-system:

  • Customers, who will pay for the service
  • Drivers, who will deliver the service.

Without them, we will also fail, just like the taxi companies.

With the rapid adoption of technology across a wide range of age-group, it has really pushed the boundaries for newer technology companies. Such is a case for this industry as well. We will be getting compared with the gold standards in this space (Uber and Lyft). However, that is a great opportunity for a newer technology company to learn from the failures and successes of the gold standard companies.

Customer Version

Paying customers are always the fuel in the organization. With switching costs becoming increasingly low thanks to the increasing adoption of technology, Ryde will focus on the following aspects of the relationship to remind customers why taxis can be a perfect substitute for ride-sharing:

  • Reliability: Taxi companies in the Lower Mainland have consistently scored very poorly on the reliability of the service as highlighted in online reviews. 
At Ryde, we believe the biggest contributor to the negative reviews is the lack of communication about the status of your taxi. When we started with our minimum viable product, we sent notifications to the customers to keep them informed about the status of their ride, something which our customers loved. For taxi companies to succeed, they will have to leverage the power of software to create transparency in their communication with their clients, a feature that Ryde has already implemented.

  • Driver’s Information: A taxi driver has to go through many regulatory hurdles to drive a taxi. A taxi company might spend thousands of dollar on training the taxi driver, yet, they fail to communicate this to the customer. At Ryde, we have leveraged a similar concept to Uber by communicating the car (make, model and year), driver information and driver rating for the customer. Taxi drivers have a wealth of knowledge of the city’s roadways accumulated through several years of commercial driving, and yet, customers have never understood the credentials of their drivers.
  • Price Surge: Ride hailing companies have implemented a basic economics concept taught in high school, when the supply is low, demand is high, the prices rise. They call it surge pricing, but consumers can often be taken by surprise by this concept. Since taxi companies have to abide the rates set by regulations, consumers should prefer to take a taxi during periods of high demand since they will not be subject to surge pricing.

  • App Reliability: – One common complaint of customers who use taxi company’s app is that it does not work at most times. Unfortunately, the companies do not care, and only update their application on a “feel-like basis”, or about few times a year at best. Uber gets updated weekly. Why that often? Because no software project is perfect, and Uber continuously provides enhancements and bug fixes throughout the software lifecycle. Ultimately, without a software, their ridership will diminish. At Ryde, we take great pride in ensuring very frequent updates to the client facing software, and daily updates to the secret layer behind the brain of the software.

Driver Version

Because the taxi companies have invested hundreds of thousands of dollar on a proprietary dispatch solutions, adding anything new to the infrastructure will be impossible. Therefore, it is critical, during the transition period, the driver based app on their smartphone complements the existing dispatch system.
  • App Based Requests: The switch to the smartphone based app is crucial for the future, because it is cheaper to rollout updates to the platform, collect data from the phone’s hardware, and continuously work on enhancing the feature set and fixing bugs. A smartphone based application will also allow the taxi driver to understand the customer they are picking up, are they always on time, or do they consistently no-show? Ryde has already implemented this feature with the ability for drivers to add notes about their customers so all future drivers are aware of their preferences.
  • Analytics: Collecting data from the phone’s hardware will allow companies, and regulatory authorities to understand how the service can be improved. The goal should be keeping the drivers busy during their shift and reducing the time dead-heading towards a customer by matching a driver to a request near its vicinity, rather, the current implementation of queue based system. Even worse, the current regulation of geo-fencing is causing multiple vehicles to dead-head to a region where they can pick up their customers. At Ryde, analytics is close to our heart. We collect all the data about each ride.
  • Prediction: Imagine if your smartphone advises you there is a 60% chance of getting a ride in 4 minutes worth $100 based on historical trends for the region you are located in. By allowing the driver to trust the platform, it enhances the confidence in ensuring the fleet utilization rate is maximized. Although Ryde does not currently have this feature set, we do hold the technical expertise to build this component with a sufficient amount of data.
These innovations can only flourish, if startups are willing to work in this space. It is against the interest of incumbents (taxi dispatch software companies) to streamline the operations and infrastructure for taxi companies. They are in the business of selling a hardware dispatch solution with high fixed costs and monthly maintenance costs irrespective of the ride, not solutions that are cents on the dollar for every successful ride.
The core to the solution is, create value for customers and drivers, the entire eco-system will thrive.

One Comment

  1. Sajjan Grewal

    Thanks for youd hard work to provide reliable solution .It is not easy to bring all companies to one platform. Best of luck.

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