The rise of the online ride-hailing businesses like Uber, Grab and Ola have changed the way people travel from one place to another.
The online ride-hailing business has grown rapidly in the past decade and is expected to reach a market volume of US$318,765m by 2023. It has become one of the most prominent business ideas to launch a startup.
Audiences of all age groups and gender are utilizing and benefiting from the business.
Reasons Why Ride-Hailing Business is so popular among riders:-
- People prefer booking a taxi online to avoid high traffic
- Travelling through cabs helps to get rid of parking problems mainly in big cities.
- It is very easy to book taxi online via mobile applications
- With the advanced features, travelling has become more secure through these mobile apps.
- No discount offers are provided by ride-hailing companies for customers on rides.
- Visitors while travelling to different cities could easily travel within the city by booking taxis online and do not have to face any risk of fraud or being charged extra money for transportation.
Benefits for Drivers, Too
- Ride-Hailing business has created new employment opportunities for drivers.
- Now drivers do not need to wait for long hours in taxi stands for work, instead, they start getting online booking from any location where they are located.
- Online booking has increased the range of customers.
- Drivers also don’t need to spend much on their marketing.
- The ride-hailing mobile apps allow the driver to work at any time, it’s up to the driver when to show availability to accept rides online.
- The loss on the discount offers used by riders is borne by the ride-hailing company and drivers are paid for those rides.
How Do Ride-Hailing Companies Earn Money?
This is the question which comes in every entrepreneur’s mind planning to launch an online taxi booking app. After all the discounts offered by the companies to the customers and marketing at a large scale the ride-hailing companies like Uber, Grab and Ola are still earning high profits. Let’s study the revenue generation channels of ride-hailing companies.
- The main channel of earning revenue is through commission on each ride. Companies charge some % of commission on rides booked from their platform.
- Ride-hailing companies charge high prices for rides when there is an increase in demand due to bad weather or peak hours.
- Some passengers prefer premium cars on rides. Ride-hailing companies charge high prices on booking of these rides.
- Advertisement is also a major channel of generating revenue, companies partner with brands to promote their services on their platform.
- Some platforms also charge the cancellation fee if riders cancel the ride after some time period without providing any specific reasons.
Key Factors While Starting a Business
To start your entrepreneurship journey in the industry, first of all, you need to consider these factors:-
- To start a ride-hailing business one needs to perform thorough research about the geography of the target region. Some of the areas to focus on could be:
i) Population of city
ii) Is the area large enough that people need to book taxi online
iii) Does the area have an airport, colleges and offices as people more often look to book cabs for visiting these places.
- Availability of drivers is key for business. It is highly important that drivers are available in adequate numbers.
- The awareness of technology among the audience must also be taken into consideration while starting a business.
- If you are planning to launch an app on a single platform for eg. Android, then you must establish the popularity of the platform in the targeted region.
How To Launch
To start a ride-hailing business you need a mobile app for drivers, riders along with a web admin panel to manage all the operations such as managing accounts of rider/drivers, Transaction management, Fare management, Geo-Fencing and much more.
The mobile apps for a rider, drivers should support some key features to run a profitable business such as:-
- Fare Estimator
- Real-Time Tracking
- Cab Selection Type
- Confirm/Cancel a trip
- SOS
- Promotional Code
- Trip Navigation
- Booking History
- Ratings
The Advantage of Opting For White Label Solution
To build mobile apps and admin panel you can go for custom development from scratch. Another option is to buy a readymade taxi app solution like VivoCabs, which enables you to launch a startup in less time without spending too much on development.
Although it’s not a walk in the park, you need to choose a readymade solution smartly. You can consider these factors to choose a solution:-
- Is it White-Lable
- Is it customizable
- Does it support multiple payment methods
- Does it offer technical support?
Final Thoughts
By following the aforementioned points, you’re sure to enter into the online taxi booking industry with higher chances of success. If this blog proved useful to you in understanding the business model and mechanism of taxi booking apps or if you’ve got some questions to ask then please feel free to let us know in the comments section below.