Six years ago, taxi apps were still “yellow pages” on the smart phone. Since then, the technology has developed with the velocity of sound. This raises new customer needs and attracts external providers with simple ideas and liberal economic ideologies on the market. A journey through time. Suddenly the taxi industry, or rather the smartphone apps ‘driving’ or ‘hailing’ the cabs, have become an extremely sexy newstopic.
The Economist, BusinessWeek, New York Times, not a month passes or there is a juicy taxi-app story. Either generated by the extreme funding for new apps or by the resistance they elicit from the sometimes rather sedate and sleepy taxi industry, doing business like it has always done: on their terms and locally.
With the latest generation of apps the battlefield has become truly international. And a relatively local taxi trade, wringing its hands, finds it difficult to counter. It would welcome a next generation app, which compares prices too, if only to show that in terms of price/quality a taxi ordered or ‘apped’ from a taxi or private hire company is not a bad proposition.
Only the last two years the number of taxi-apps has exploded. The early taxi-apps were never in the forefront of Taxi Tech: in fact, these apps were relatively slow to develop in the wake of many other apps. But their impact has been enormous.
The latest in apps threatens to shake up the foundations of the industry – not just by offering semi-illegal cheap car-sharing, but even in completely legal ways, by changing the ordering or hailing process. In six years’ time apps have completely changed the taxi landscape.
Not only from outside the industry, but also from within, as many early apps were developed by individuals or companies closely connected to the industry. Hailo, MyTaxi, GetTaxi and TaxiMagic (from 2007 onwards) are good examples of early pioneers. Later hundreds of apps, many white label varieties, not always giving the same stable quality as the brand-apps, joined the fray (like Lyft en Uber).
Technology and ideology
A timeline of taxi-apps is not easy to draw. Around six years ago, the first taxi-apps hit the streets and the smartphones. Compared to the slick versions we have now, they were clunky and usually nothing more than a list of taxicab companies in a sort of Yellow Pages format. You could call or connect with any of them.
That period (Taxi-apps 1.0) lasted a relatively short time. Soon a tap on the app connected the user to a particular cab company and not much later ‘tap to hail’ became the rage: the app hailed a cab. Either from the entire fleet available or (with Taxi -apps 2.0 and beyond PHoto : Ecco / Fotolia TAXI JunE / 2014 11 a company or industry-app) from a carefully selected group (affiliated companies), the TaxiMagic – an earlier developer in the field- approach and strongly linked to the taxi industry – piggybacking on ‘friendly fleets’ for growth.
Not only general company apps came to the market – connecting the customer to the taxi via a radio-circuit or a company. Taxi-apps MyTaxi and Hailo proudly claimed that they would connect the customer to the driver, putting a large bomb under the radio circuit structure in many countries. Drivers usually pay 10% of the trip to the app-company. In no time Hailo signed up 60% of London black cab drivers. Initially Hailo claimed it was the ‘black cab’s friend’, as they were taking passengers out of private hire and putting them back in black. Recently Hailo announced it would also recruit private hire drivers.
Apart from that many companies proudly launched their own apps – often lacking in sophistication compared to the dominant apps. IT-startups like Uber, Lyft and Sidecar – originating in the USA and particularly in the San Francisco area and strongly backed by venture capitalists – from 2009 onwards added yet another twist to this story: they proclaimed themselves as being ‘disruptive’, aiming at destroying the regulatory framework of the taxi and private hire industry.
Not only did they aim their apps and activities initially at private hire companies (for instance Uber- Black for the black car industry), but they also launched private shared-ride systems which clearly went into the dark side of regulation.
Their claim was simply: “There is a need for IT-based transportation that doesn’t fit the regulatory system – so the syatem needs changing …” That’s where technology met ideology, because the IT-startups clearly very much believed in liberal economic thought. It also led to the most fiery clashes with the trade they saw as obsolete: the taxi and private hire industry. Add to that their deep pockets …
In the mean time the taxi industry hasn’t exactly sat still: inspired by the largest Paris taxi company G7, E-cab was created, now a separate company based in Dublin. E-cab is one of the first international taxi-apps emanating from industry strengthening its international ranks.
Taxi.eu provides the same platform, but differently from E-cab, is linked to the technological platform of FMS Systems, with soft and hardware in about 110 cities in Europe. More and more taxi companies and radio circuits with affiliated drivers are now subscribing to these systems, whilst marketing their own local brands and apps.
When it comes to service delivery, several app companies like MyTaxi and Uber, have branched out into deliveries. It will not be long before the app companies with their vast databases, will be mining these to initiate other (transport) services.
The large amount of data generated by the apps, enable the app-companies to provide good quality and to monitor flawless service-delivery. And before we forget the technological side: what is an app of the last generation? – A strong GPS tool with the proper algorithms is a requisite to triangulate the exact position of the customer with reference to the position of the cab(s).
– Live tracking on a map is no longer an interesting gimmick: the customer likes to see his cab is coming.
– Possibility of advance booking, multiorders and particular types of taxis.
– A form of taxi radar: an overview of available taxis nearby.
– Accurate information about the driver: photo, name, telephone number (for queries) and an average rating.
– A quality rating: once the trip is over, the passenger can rate the driver with a star-system. Favourite drivers can be stored.
– A solid payment system via the app: by card or by transfer and in some cases with bonus airmiles.
– Some apps can –cloud-based- be used to dispatch other taxis with.
Add to this, the IT-companies own refinements (like Uber’s surge pricing, taking into account weather and supply predictions) can give one app the edge over another. The spread of taxi apps internationally begs the question of whether one app (on Android or iOS operating systems) will become dominant globally.
It will also be interesting to see whether for instance Chinese apps will start playing a part in the international struggle. Most taxi regulators and taxi trade insiders expect a period of intense competition before a certain balance might set in. Question is whether the taxi industry will manage to regain the upper hand again.