Most of the people in busy cities have a lack of public parking spaces. That’s why they prefer cabs to commute around in their daily lives. It’s easier and more economical to book a cab than taking your car to shop and pay hefty parking charges, if it’s available.
Having said that, we cannot discuss the modern concept of taxi services without talking about the two giants –Uber and Lyft. Operating in two entirely different business models, Uber and Lyft solve a common problem for the people in the cities, towns, and many tourist places –they provide hassle-free and quick ways to book a commute online.
Interestingly, online cab facilities are no more limited to occasional commutes around and outside the city limits. Instead, apps like Uber and Lyft have become a part of our daily commute schedules. Since online cabs are now more convenient, quick, and economical, commuters today prefer cabs to their own cars.
Besides, a significant amount of temporary settlers who can’t just buy or take their cars everywhere they visit, use popular taxi booking apps as a standard way to travel everywhere they go. Whether you visit in an Asian country from the US, or vice-versa, you have Uber as a familiar face almost everywhere you go around the planet. If not Uber, the first thing you try to find out is if that place has some local alternative to Uber.
Are you thinking about building an online taxi-booking app?
Are you running a traditional taxi company and thinking about upgrading to the online model? Are you considering building an Uber-like business from scratch? This article will impart some critical lessons that you must take into consideration in either of the cases. We will know how the giants and successful businesses before you did it and build perfect taxi app solutions to connect cab drivers and passengers in real-time.
Top players in the taxi booking apps market
Although giants like Uber and Lyft dominate the market in the US, the global scene is a little different. Uber covers most of the global market well, but it gets close competition from the local businesses. In fact, some of the local companies have been growing big and they are now competing with Uber in the international market as well. Take Ola- an Indian Uber-like cab-booking app for instance. After giving a big competition to Uber in India, the local online cab operator is now also functioning in the UK.
Let’s see what these big businesses can teach us about this very lucrative business model, and how you can make an app like Uber or Lyft to run a business.
Uber
Started back in 2009, Uber is now the most popular ride-hailing app in the US and most countries on the planet. Besides sharing over 70% of the US market, it operates in more than 600 cities and 65 other countries. Last year, when Uber went IPO, although it received an underwhelming valuation of $82.4B, it still was a big number.
However, the market cap of Uber Technologies has only reduced over one year. Today, when I am writing this article, the current market cap is resting at the $62.09B mark. Experts say that Uber has been spending much more than what it is making.
However, it doesn’t mean that the online taxi market is at any threat. In fact, Uber’s diminishing share is due to its immediate rival Lyft, which is growing at a much faster rate than Uber. It could be a good sign that the market is still competitive and other players have their chance.
Lyft
Launched just after 3 years from Uber, Lyft is yet another popular ride-sharing app in the US. In 2018, Lyft was valued at $15.1B, which is huge considering that Lyft operates in the US alone. While the overall workflow of the Lyft’s app is very similar to Uber’s, it follows somewhat a different business model.
The vehicles and drivers used by Lyft are mostly private car owners, who share-rides with others to make money from their cars. While Uber is more about ride-hailing, Lyft presents itself as more of a ride-sharing and car-pooling app. Gradually, Lyft is growing big in the US, and its share price is not far behind Uber.
Lessons to learn from online Taxi booking businesses
If you are thinking about investing in this market and starting a similar ride-booking business, you must keep the following lessons in mind to gain success:
Focus on customers genuine problems and formulate a model on solutions
The biggest lesson that the success of Uber and Lyft teaches us is offering a stable solution to the passengers’ existing problems. They found loopholes in the traditional taxi business model and addressed them in their online alternatives.
- Customers need cabs around the clock
- Taxi operators controlled the cab fares
- Door to door cabs was even expensive
- Passengers could not choose the vehicles
Today, with Uber and Lyft, passengers can avoid all these drawbacks of the traditional taxi-booking model. Online cabs are available around the clock and passengers now can book cabs from the comfort of their homes. Besides, there is a central fare calculation model, hence the cab drivers cannot charge unfairly from the passengers in desperate situations.
Simplify the existing cab booking model with simpler and convenient alternatives
The biggest issue with the ways passengers hail a cab is the struggle to find a cab. Standing on a street and looking for cabs going your way become even complicated in the odd hours, especially at night. Uber and Lyft took the entire process of finding and booking a cab to its simplest level by accommodating everything in a mobile app. If you have the Uber app, no matter where you are, you can always find a cab that goes your way.
Besides, the apps have been updating their workflow regularly and trying their best to give a series of easiest possible steps to find and book a cab. Just open the app, enter your pick-up point and destination, mark both the points using an integrated map, select the type of ride and vehicle, and the app takes care of the rest.
Let the passengers be in control of their rides by providing them as many options
The ride needs of every commuter are not the same. In different circumstances and at different budgets, passengers seek different types of rides. Make sure that you are offering something for everyone in your catalog. That’s what Uber and Lyft do.
- You need a cab to commute in the city- there is an option
- You need a cab on an hourly basis- you have one
- You need a one-way cab to the airport –there are airport rides
- You need a big vehicle for a family trip – you can book SUVs and Vans
- You don’t want to book an entire cab– you have shared-rides or pool cabs
In short, when passengers feel that they have control of their experience, they favor you. Give them all the options, even better options than the traditional model to get traction. I mean, in the early days, how many times you remember giving a rating to a New York yellow cab driver. Never, I guess. With Uber and Lyft, passengers get everything they want with a tap. Even when they want to register a complaint about a bad cab experience, it is just a tap away.
Don’t beat around the bush to develop an app from scratch, there are easier ways available
There is no doubt that Uber spent a fortune, first to formulate their business model and then developing a platform for it. Fortunately, if you are thinking about making an app like Uber, you need not spend even a fraction of it.
The best way to build a platform like Uber in 2020 is to purchase an Uber clone script for a few bucks and customizing it to fit your unique requirements. An Uber clone would hardly cost $500-$1000, while building the same thing from scratch is over a $100,000 project. Therefore, you should research and test out popular Uber clone scripts in the market.
A typical Uber clone script would consist of a full package with mobile apps for passengers, drivers, and an admin panel. Most of these scripts have all the Uber-like features out of the box, while they also provide open source-code access to let you make the customizations on top.
So don’t beat around the bush or try to re-invent the wheel. Use a script to build your platform, and you can save a lot from your investment budget. It’s a lesson you should definitely take from the business models of the top players in the market.