5-point plan for taxi companies to succeed in the Uber age

"Looking at Uber’s dominance as a cab company CEO, though, the question remains: can they combat the ride-sharing giant and, if so, how?"

Published on 19.07.2018, in uber

In an article for TechCrunch, journalist Tim Goodwin crafted the go-to parlance on the prevalence of digital disruption.

“Uber,” he writes, “the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory.”

Uber is (almost) everywhere – but despite flying high, there has been a long list of scandals and disasters, not least of all accusations of sexism, underpayment, sexual harassment, safety fears, and (bizarrely) spying on Beyoncé.

However, the controversies have done little to slow Uber’s march. Its 2018 Q1 financials reported strong sales growth (revenue is up 55 percent) despite the fact that the company actually lost $4.5 billion in 2017.

Regardless, Uber’s rise has been meteoric – and it’s one any CEO would be happy with.

Looking at Uber’s dominance as a cab company CEO, though, the question remains: can they combat the ride-sharing giant and, if so, how?

1. Prioritise customer safety

One of the reoccurring issues of Uber is its safety concerns. Theoretically, most people are eligible to become an Uber driver – which opens an enormous can of worms.

Indeed, a CNN investigation revealed that at least 103 Uber drivers in 20 major US cities are, “accused of sexually assaulting or abusing their passengers in the past four years.” Lyft, on the other hand, had 18 incidents matching the same criteria – and that doesn’t include drivers who have been robbed and murdered by customers.

Cab companies must work towards making customer and driver safety a priority, with stringent background checks, including fingerprinting all drivers. It’s important for taxi companies to make their cabs as safe as possible. And if you’re already doing most of this, make sure you’re promoting it!

The regulatory environment in all markets iCabbi serves should cover these bases, however, in some instances, regulation and safety requirements may vary. Likewise, employers should be aware of evolving technology that can assist with risk management and include them as standard requirements when purchasing or leasing vehicles.

Having a trusted brand is also important – and you already have that advantage. Be transparent with your client base, be reliable, and bring value to the client.

2. Fight fire with fire

Despite its transportation links, Uber has positioned itself as a tech company. However, the European Court of Justice, the highest court in the European Union, dealt a blow to the ride-sharing company by declaring it as a regular taxi company.

The case stems back to 2014 when a Barcelona taxi drivers’ organisation complained that Uber creates unfair competition as it doesn’t have to abide by the same regulations as other taxi services. 

In late December 2017, the European Court of Justice ruled that any company that intends, “to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys,” must still be considered, “a service in the field of transport.”

For its part, Uber publicly acknowledged the need for regulation and a spokesperson said, “this ruling will not change things in most EU countries where we already operate under transportation law.”

While the ruling may have been seen as a positive for cab companies, the effect has been limited as Uber relaunched its peer-to-peer system as a regulated taxi and private hire business in some European cities, and it already operates under national transport laws in areas such as the UK, France, and Germany.

Cab companies will need to be proactive rather than reactive in their quest to combat Uber, and start thinking more like transportation network companies. Consider a TNC model or a hybrid model that has advantages lauded by ride-sharing companies: e-hailing, credit card details saved on file, technology to facilitate efficient pick-ups and drop-offs, transparent/visible pricing, and an agreed route mapped out before pick-up.

Technology is the great enabler of a robust TNC/hybrid setup, which leads nicely onto:

3. Take advantage of available tech

Traditional cab companies work on a relatively simple basis: call or book a cab online; the cab is scheduled from available drivers within a certain proximity; the customer is collected, dropped off, and charged.

It’s a legacy system that will go the way of the dinosaur with e-hailing and emerging technologies.

A cloud-based dispatch system like iCabbi may be the difference between extinction and survival in the Uber age, with transparent pricing, an intelligent voice assistant, passenger and driver apps, API integration, and a fully automated system.

The benefits are two-fold: streamlining the company’s operations while giving increased visibility to customers via the app to track the arrival of the driver, or get a Dynamic ETA. In addition, fleets can take advantage of iCabbi’s promo codes functionality (see point 4!), as well as the updated Business Accounts functionality on the app – helping taxi companies win and retain more corporate account work.

It's a particular boon for small to medium-sized businesses which may be struggling against e-hailing behemoths as an automated taxi system gives system stability, reduces costings and improves the bottom line.

You’ll save time too as the system will handle tasks around staffing issues, availability, route planning, resourcing, and driver performance.

4. Install a loyalty programme

While attracting new customers is the life blood of any business, retaining them is integral to cash flow.

A data dive in 2016 showed that 70 percent of the value for one iCabbi client was coming from just 30 percent of the customer base.

A loyalty programme could be key to retaining loyal customers and stopping them from defecting to Uber or similar ride-sharing apps.

Customers value increased service levels and will appreciate an easier life, be it in the form of 10 percent off their next trip or an exclusive tier system prioritising high-value customers in busy times. Investing in a good website and/or an app is the way forward for cab companies, as this is the foundation on which you’ll build a successful business into the future, and these will also help to underpin your marketing efforts.

Customers could be rewarded for referring a friend, joining a company/family plan, installing the app, or sharing about your taxi company on social.

5. Consider active marketing

Your marketing is your most solid route to your customer. For starters, invest in a good website and an app, such as iCabbi’s solution.  User-friendly experience benefits customers and drivers alike. Google AdWords and Pay-Per-Click can put your website in front of potential customers who search for terms like: ‘book a taxi’, ‘cab company’, ‘cab number’.

Likewise, create social media pages and update them with interesting content around your company. Consider targeted Facebook ads: for example, if you know a musician is playing a big gig, you could target the area with messaging about booking a cab home.

Consider the aforementioned referral or loyalty programme. Do flyer drops in your service area and print business cards to hand to customers.

Marketing the ease of payments offered by iCabbi is a solid move too. “By using the latest payments technology your passengers can pay faster than ever before,” points out Andy George, Product Manager at iCabbi. “No more worries about machines not working or pin pads not having enough battery for drivers and taxi company owners alike,” he adds.

With apps like Uber and Lyft on the up, it’s a tough time to be a cab company – but smart technology, solid marketing, and putting the customer first will be your avenues to emerging ahead of the pack.

How it all comes together

Ride-sharing can be a scary prospect for some. But not for Bill Yuhnke, owner of Liberty Yellow Cab in Western New York. “My business has actually increased. In a way I have to thank ride sharing,” he says. That’s because, in response to the threat offered by companies such as Uber and Lyft, Yuhnke innovated.

Liberty Yellow Cab now offers a customer-friendly app and online booking provided by iCabbi.

“The cab industry had to get better and I think we did,” he confirms. Now, drivers are coming back to Liberty Cab and the business is great shape, compared to other companies who are still struggling to adapt.

Want to maximise your taxi business in a disruptive market?

iCabbi can help you to innovate. Get in touch today to find out more, or to book a demo.

taxi automation

Shane McDonnell

Director of Marketing & Communications

iCabbi is the leading global innovator in cloud based dispatch systems, created with and for enterprise taxi partners to drive business growth.

The platform offers full visibility and control of business and is designed to reduce operational costs, increase efficiency through automation and drive customer satisfaction.

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