Driverless Cars & The Taxi Industry

A comprehensive look into driverless cars

Published on 18.11.2016, in Market news

One of the subjects closest to my heart in the evolution of the taxi industry is the what, where & how that autonomous/driverless cars will bring. By all accounts it would seem to be when as opposed to if, so what impact could this have on the industry?

For me the biggest strength that the taxi industry currently enjoys is the customer/consumer base (including corporate accounts) that the taxi companies have. They have a large base of regular customers (cash, card & account) and the question to me isn’t so much what sort of impact are driverless cars going to have on the industry but more like how are the taxi companies going to hold on to those customer bases and change their businesses quickly enough when the time comes to ensure that other massive companies with their eye on the driverless car market don’t steal them from them.

It’s all going to be about planning and timing. Get the former wrong and they’ll be left with a load of drivers in old vehicles that nobody wants, get the latter wrong and you could either end up broke (too early) or broke (moved too late) with a load of autonomous cars on their hands having lost their customer base to the early movers.

Are the changes autonomous vehicles introduce going to be an opportunity for the taxi industry or will they ring the death knell for it? I believe that all depends on how and where they have placed themselves.

The way that I see it is that hundreds of thousands of independent taxi companies on their own don’t have a chance. All of the major car manufacturers, Uber, Lyft, car rental companies, Google and many others are all positioning themselves for a play in this new market.

It doesn’t take a genius to work out that they will focus their attentions on the most profitable markets first. That’s likely to be the biggest cities. So the taxi companies in the biggest cities will have the least wriggle room in terms of timing, they will need to be as ready as the huge industries and companies mentioned above. Those outside the biggest cities will probably have a bit more time to see how things are panning out.

But all things being equal I see one key factor at play here – sufficient availability of autonomous vehicles.  As a big player you will be able to contract manufacturers years in advance (much the same way as airlines do with Boeing and Airbus today) but how will all of the relatively small taxi companies figure in this and how is it all going to pan out?

What will happen if a company like Google stockpiles autonomous cars and floods cities with them in one go and targets all of the people using their search engine? Mass movement of a customer base is my guess.

I believe that with the above in mind taxi companies should be joining together now to form strong groups with massive potential buying power. They should be getting a seat at the tables where all of the key strategic discussions are being held on autonomous vehicles and they should be mapping out how a world where people don’t own their own cars may look.

My own view is that car clubs would seem to be the most obvious model to arise from these changes. Instead of buying a car you would pay a monthly fee (& perhaps an introductory fee) that would get you X hours of use in a car per month with a guarantee that you could get it with Y minutes of advance notice. The higher the monthly amount you pay then the quicker you are guaranteed a vehicle at short notice and the more frequently you can use the service.  Perhaps you could pay less to be part of a car pooling type service where you share cars with other people.

If I was a taxi company owner pondering the long term view I’d be thinking about how I could get my current customer base in to my Car Club of the future. Perhaps starting slowly now with loyalty schemes that reward customers with a free journey for every X journeys done, perhaps I could even disrupt the taxi pricing model of today and introduce a flat monthly fee for a guaranteed number of fares each month.

Also as per a previous article I wrote owners could consider introducing a peer to peer and/or rideshare car pooling model to their customers who want cheaper, shared transport. Thereby moving with the times and maintaining or even growing their customer base while evolving towards the autonomous car club model.

I believe that as a taxi company owner if you’re not thinking about it then you’ll be left behind as it’s all about timing.

If you are a taxi company owner please feel free to contact me to discuss how iCabbi could help your company evolve in these challenging times on


Bob Nixon

Sales Director & Co Founder

Bob is the Head of Global Sales, and a co-founder of iCabbi. Bob gives a detailed look into 2016 and how 2017 looks for iCabbi and the industry.

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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