How To Make A Taxi Business Profitable

Posted by Mushahid khatri on May 16th, 2018

With the likes of Uber, Ola and Lyft ruling the roost in the Taxi app Solution business arena, it becomes tough for small players to keep up with the pace and also remain profitable at the same time. You just cannot be “another taxi company” which provides very generic service. The secret to staying in the race is to build a strong foundation and set a game plan right from the beginning which could be the deciding factor in the success of your taxi business.

 Below graph shows general attitude of customers towards ride sharing market:

 

Image Source: seekingalpha.com

Goldman Sachs says that the ride-hailing industry is ballooning and will reach 5 billion by 2030.

The US Bureau of labor statistics predicts that the employment for taxi drivers and chauffeurs will rise to 20% by 2020, giving you hope that you are in the right business.

To make your taxi business a success, here are some of the things that you need to consider.

1) Market analysis

The most crucial thing to have a profitable business is to know your market well. Understanding what your competitor is offering, will help you compare your own business with their’s and chalk out a plan. You should delve into the nitty-gritty, instead of having a superficial view of the market. So, spend as much time as possible at this stage and gather crucial insights.

2) Know your audience category

As a taxi owner, you need to focus on your target audience and advertise your services accordingly. Customers of a taxi service can further be divided into:

 a. Rich customers - They want exclusive service in terms of better cars and drivers. Drivers they can choose, car amenities, and an exclusive VIP number to call in case of queries.

Such customers don’t bother about the price. What they want is an experience. If you act just as “a normal company,” you can lose out to them.

b. Frequent business travelers - They travel a lot and so value their time. To them the deciding factor when choosing a corporate taxi solution provider is predictability. They want to be sure that your driver will reach them on time, everytime. They generally pay through their corporate account and if they find your service satisfactory, they will be ready to pay a premium price for it.   

c. Daily commuters - Their only goal is for you to take them to the train station on time. They don’t really care about the cars and/or drivers.

d. Local riders - These rides are taken by customers, who either don’t own a car or own a car but doesn’t want to take it out. Usually they are very price sensitive and not loyal.

e. Senior citizens - They generally have canes/walkers/wheelchairs. They want drivers who are attentive and help them out during the ride.

f. Students - They are the cheapest customers to have with whom you can’t build a long-term repeat business. They are never loyal.

And then there are bar crowd, hotels/convention centers and hospitals. Each group should be targeted separately.

3) Fix your business model

You need to think about how much you wish to participate in running your taxi business. You can either lease the vehicles to the drivers or carry out a partnership with them to share the fares. Depending upon your budget, you can also purchase a new fleet of cars or hire a fleet on an annual basis. You can also purchase cars from auto auctions.

4) Invest in technology

Mobile applications have become a necessity nowadays for taxi business. Passengers find it more convenient to book a ride on a taxi app like Uber. Focus on creating your own image through your Taxi solution.

Your business can also invest in a taxi dispatch system to improve the efficiency of your tracking and dispatch processes.

5) Get Customers

 1. Online Advertising

  • Social networks – Create communities in social networkssuch as Facebook, Twitter, YouTube and Instagram to target customers. Your page should constantly display some informative and entertaining content that appeals to your new customers like promos, videos, contests, etc.
  • Web Desk solution – Provide an online booking tool (Web Desk) on your page, through which customers can place orders 24/7, simply by clicking a button.

 2. PR & Media – Make your company stand out, by reaching a wide range of audience through PR in local media. Share your story in local publications.

 3. Online promotion – Advertising is the most effective way in online promotion. Give ads in the channels where you will find your type of audience.

  • Google AdWords

Google AdWords and PPC [pay-per-click] can give you a lot of traffic if done in the right way.

  • Advertising on Facebook & Instagram

Create an Instagram account or connect your existing Instagram account to your Facebook page. Now you can place your advertisements for Instagram in Facebook Power Editor. Set aside a small budget, target audience, locations and placement for the same.

If people don’t download your app, chances are still they end up ‘liking’ it. This creates a database of potential customers.

 4. Exclusive service

Some hotels, restaurants, and other public places, tie up with particular operators who give exclusive and guaranteed service to customers when they need it.

 5) Fleet Branding

You can choose to wrap your vehicles on the road, which will be visible to thousands of people every day. This way your brand will become more recognizable.

 According to an independent study conducted by the American Trucking Association:

• A wrapped vehicle that traveled in and around a major city generated more than 65,000 visual impressions per day;

• 98% of consumers feel that fleet graphics created a positive image for the company;

• 96% said fleet graphics had more impact than other forms of outdoor media (billboards, for example).

 6) Follow-up with drivers

An app will always offer the customer the facility to rate a driver. Once you see poor ratings for a particular driver, you can talk to him and solve the issue however big or small it is. This means you have only the best drivers working for you.

 7) Win Customers

Launch a campaign of referral program, with initial coupons. These coupons can be given to an initial group of people who will start spreading the word  – referral holders invite their friends, who in turn invite their friends.

8) Facility for Credit Card Payment

Most customers like to go cashless today. Credit cards are used to a large extent, while shopping online or offline by customers. So, make facility for credit card payment in your app.

How can our Taxi solution help you?

YelowTaxi is a white label taxi software solution that includes fleet management, dispatch and booking solution designed and developed by Peerbits. It is meant for businesses of all sizes and shapes that manage a fleet of vehicles. The solution is delivered in the form of various mobile and web apps.

Our solution is scalable and works fine with as many additions in your fleet of vehicles as you want to. YelowTaxi is fully customizable to your branding requirements and business rules. As a business owner, you will access to the admin panel; can override rules and make exceptions to the fleet operation.

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Mushahid khatri

About the Author

Mushahid khatri
Joined: May 16th, 2018
Articles Posted: 1