The taxi industry has been disrupted by technology, most prominently in the guise of rideshare platforms such as Uber, Lyft and DiDi. Uber has hit taxi drivers in the pocket with salaried drivers seeing an income fall of around 10 percent.
Stats show a 50 percent rise in the number of self-employed drivers in Uber-dominated areas too, according to research from Dr. Carl Benedikt Frey.
But it’s by no means a case of rollover and die for taxi companies. Technology is there for the taking. Fleets can fight fire with fire by applying the very technology that’s threatening to render them obsolete, such as iCabbi’s dispatch system, business intelligence tools, and real-time passenger and driver apps.
And it’s not just about catching up. Taxi fleets are in a position to take a stronghold in the new age of mobility if they can stay abreast of developments in transport technology and make these work for taxi models.
So just what are the emerging trends cab companies need to know about in the short to medium term? And how likely are they to actually take off? We’re putting them to our in-house mobility expert Bob Nixon to gain his insight.
Read on to find out which trends Bob debunks and which ones he feels are most relevant for taxi companies right now.
Trend 1: Going green with electric cars (and a greater proliferation of customer wants)
The trend: No doubt, the future is green. While climate change has been a hot-button topic for the last few years, environmental stewardship has come to the fore for consumers.
It’s not enough anymore to espouse company values – consumers want to see action. A huge part of that is reflected in the move towards greener living with recycling and sustainability emerging as prescient concerns for the modern world.
Electric cars typify that trend, and it’s something that’s increasingly relevant for taxi drivers as countries around the globe legislate for rechargeable vehicles
Norway leads the way, with the highest number of electric vehicles per capita in the world. With over half of new car sales in Norway made up of electric vehicles, the country is believed to be about 5-10 years ahead of the pack. The Norwegian government’s longstanding strategy to incentivise electric vehicles has paid off - it’s been on their agenda since the late 1980s.
Countries looking to emulate this success have much to learn from Norway’s EV regulatory practices and many have followed suit.
The incentives are there to buy electric, so what are people buying? When we think of electric car manufacturers, Tesla jumps straight to mind.
No doubt this reputation owes much to Elon Musk’s attention-grabbing media PR stunts, such as the time he sent a Tesla into space. But while he’s dominated the headlines around the world, the electric car business has been booming for other manufacturers too.
The iCabbi expert opinion:
Electric taxis are a logical next step for fleets given consumers’ increasing demand for stewardship, brand values, and a greener future.
One of the long-standing concerns for taxi companies thinking about EV is range - and rightly so, because the availability and geographical spread of electric vehicle charging points could limit a taxi’s range to urban clusters.
A further drawback relates to the time it takes to fully charge an electric car paired with the reality of relying on public EV charging points, and the plethora of uncontrollable variables that brings into play: demand, maintenance etc.
So, electric vehicle infrastructure can be a deterrent. However, the proliferation of EV charging points (not least through privatisation), and advancements in fast charge EV technology will move at a quick pace.
Unsurprisingly, the EV manufacturers are on the case. Renault, for example, is increasing the range of its electric vehicles, the ZOE and Kangoo Z.E, and concurrently developing more dynamic electric motors, such as the new 80 kW R110 on ZOE. It’s also rolling out new connected services for easier vehicle charging. Users can obtain charging information in real time or control operations from a distance with their smartphones.
Electric cars are part of the green agenda for many countries, so the political will is there to make it happen. Taxi drivers and taxi company owners can benefit from schemes that incentivise electric vehicle adoption, and it’s time to start making plans for this.
The EU, for example, proposes strict targets of 40 percent of car sales being electric by 2040 – which means cab companies need to take note.
In Ireland, taxi drivers are set to receive a €7,000 grant for switching to electric cars while in the UK, the first “Go Electric Taxi” scheme rolled out in Coventry in 2018. In the scheme, drivers are offered incentives including extended test drives, £2,500 off their first electric taxi orders, free charging during the trial and zero commission fares on e-taxi app bookings.
And it’s not just happening in Europe: in the US, electric taxis are already in operation, including Electric Cab North America, whose distinctive cabs provide zero emission micro-transit services to dense urban areas.
As far as this trend is concerned, the future is now. Electric taxi fleets tick the boxes for regulators and will sway customer loyalty based on environmentalism. Taxi companies should be thinking about getting out ahead of the pack because electric vehicle transition will be coming whether it’s sooner or later.
Trend 2: Autonomous vehicles
The trend: Autonomous vehicles are already a reality: Copenhagen’s Metro is automated and driverless, with Hitachi Rail Italy winning a contract to supply Denmark’s Metroselskabet with eight new autonomous trains for the M1/M2 lines by 2020.
A decade on from its beginnings as Google’s self-driving car project, Waymo isn’t far from becoming a commercial entity: members of the public have been travelling in its driverless Chrysler Pacifica minivans for some time, with the company releasing a promotional video in March 2018.
Nissan is preparing to launch its own self-driving taxi service in Japan, with a roll-out of some services expected by 2020. It partnered with DeNa to launch its Easy Ride robot taxi service on March 5th last year.
Rounding out the impressive roll-call of tech companies is GM, which intends to launch a line of self-driving Chevy Bolts in 2019, ahead of its main rival, Ford, whose fleet of pedal- and steering wheel-less cars won’t be ready until 2021.
It’s a race to the top – though the push for autonomous vehicles hasn’t been without its hiccups. Uber has laid off its self-driving car safety operators in Pittsburgh as the company re-evaluates its autonomous vehicle strategy on the back of the highly publicised fatal crash in Arizona in March of 2018, and a Tesla driverless car was responsible for a second fatality in California.
The iCabbi expert opinion:
Autonomous vehicles are already happening – but the questions of legislation, safety, and perception remain pertinent.
A 2017 Pew Research Center report found that while two-thirds of Americans think self-driving cars will dominate the roads within the next 50 years, fewer than half would choose to ride in one.
In the wake of separate Uber and Tesla fatalities, the reception is likely to be even more strained. We’re talking about major social and cultural shifts as well as technological ones and so it will be generational for sure and uneven across the globe.
There are political and regulatory factors at play too. Given the newness of self-driving cars and the tech that powers them, legislation still needs to be put into place to support them. In the UK, legislation to promote the safe use of driverless cars is under development by the Law Commission to be ready as early as 2021, with a “modern and robust” package of reforms as part of public transport networks and on-demand passenger services.
The US Congress is also focusing on developing a national policy, with the SELF DRIVE Act passing through the House of Representatives and the AV START Act pending with the Senate – though the suggested reform isn’t without its critics.
While a lot of work is underway in America to launch driverless cars into consumer markets, I don't think it will be the first country to roll AV into the mainstream. China is more likely to do so and I reckon we’re looking at about 2024/5. There’s a number of reasons for this from technological leadership and consumer trends in car ownership to acceptance rates.
By contrast with the US or northern Europe, Chinese people are almost twice as trusting of autonomous cars. That’s according to a recent survey by TUVRheinland. The technology is also evolving at a rapid pace.
China was never a big player in the car manufacturing industry, however, the skills required for autonomous vehicle production are technological as opposed to traditional mechanical engineering. This therefore plays into the country’s strength. So, I’m certain China is set to take a large share of the EV industry.
What taxi companies need to understand is that self-driving cars and autonomous taxi fleets are inevitable. However, the quandary remains in the legislation, and following that, adoption rates because there’s far more in play here than just technology.
People, as we know, are far harder to predict than technology and although we’re talking about driverless cars here; they’re not peopleless. Taxi companies need to keep a close eye on AV developments, but for me, the next logical step is a move to EV – electric vehicle taxi fleets.
Trend 3: Alternative travel
The trend: Is it a bird? Is it a plane? No, it’s…an Airbus flying car.
Airbus is making steady progress on its electric-powered vertical take-off and landing aircraft – which isn’t actually a flying car, despite public perception. Its Vahana project aims to realise the concept of personal flight, with the aircraft offering a single-seat, tilt-rotor vehicle.
Automated aerial vehicles are also gaining some traction with fledgling taxi start-ups Joby Aviation and Kitty Hawk receiving $2 million in funding from the US military in 2017. Larry Page, Google’s co-founder, is also bankrolling Kitty Hawk in the hopes of creating Cora, a pilot-less air taxi.
In a serious move towards realisation, Kitty Hawk has been testing Cora flying taxis in New Zealand, where it intends to launch its first commercial air taxi service.
On the ground, or should we say on the water, hydro-taxis are a much less extravagant alternative option, though they are most broadly used as a tourist trap in sightseeing expeditions.
The iCabbi expert opinion:
Flying cars are a misnomer: most are actually aircrafts, so they’re a trend that’s unlikely to take off.
As with autonomous cars, automated aerial vehicles are coming down the line – with commercial launches expected small-scale in the next five years. But, as with autonomous cars, perception and legislation are imperative to its success.
Will the public actually have access to personal flight or will it be a ‘big boy toy’ for the Elon Musks of the world? It’s early days yet but fleets of automatic sky taxis are likely a long way from realisation.
It will be a whole new ball game for transport regulators, and perhaps more difficult too in the absence of a fixed roadway system. Think of the disruption caused by the recent drone interference at London airports and it becomes pretty clear that a new frontier-ship of cowboy flying taxis is untenable.
Flight pathways will no doubt be set journeys from one station to the next and will initially be a tourist/novel experience – I’ll definitely be in the queue!
For taxi companies operating right now, I wouldn’t be too concerned about competition from flying taxis in the near future. Nor would I be too anxious about early adoption: the investment required to get flying taxis off the ground – excuse the pun – will be prohibitive to even the largest taxi fleets.
Advancements in autonomous flying vehicles will be led by an oligopoly of global tech and aeronautics companies, so I reckon we’ll be at their mercy as to the business models for commercial flying taxi fleets.
Trend 4: Merging traditional taxi companies and TNCs
The trend: Transportation network companies (TNCs) have taken over the cab industry, with Transportation/Mobility as a Service (Maas) becoming a key outlet. Ride-sharing, taxi apps, and digital systems are at the cornerstone of modern transportation with new start-ups and established companies pumping major bucks into pet projects.
Toyota is investing $1 billion into Grab in a move to conquer the MaaS field in Asia. Grab runs online-to-offline mobile platforms in transportation, food and package delivery, mobile payments and financial services in 217 cities in southeast Asia. It acquired Uber’s southeast Asian assets, positioning it as a ride-hailing champion in the area.
Toyota and Grab have been in collaboration since August 2017 and the new capital intends to fully realise MaaS as a concept, with a more efficient, mobilised society.
It’s a move to mobility that’s happening around the world: despite multiple PR disasters, Uber is on a continued march to becoming the Amazon of transportation, with cars, trucks, autonomous vehicles, bikes, and scooters in its publicly-available fleet of third-party transportation.
The iCabbi expert opinion: Ride sharing, taxi apps, and third-party transportation are the new normal. Traditional cab companies will die out if they don’t embrace the kind of digitally-inspired change that smart technology offers its customers.
Many taxi companies are fighting back either by taking an ‘if you can’t beat them, join them’ approach or by using sophisticated technology – and indeed even developing their own innovative solutions – to compete.