In recent years, with the progress and development of information technology, the smartphone is playing a vital role in daily life.
Different kinds of apps in the smartphones change the ways of life in many ways.
Taxi calling app, which is known as call taxi app, is one of the most popular and revolutionary kinds among them. With a taxi app, users can search for the available taxi around them or make a pre-order. They can fix their locations by GPS or typing in the target location, by which drivers can easily reach them. Passengers have better consumer experience using a taxi app and taxi drivers can benefit from getting more business as well.
Mega Cabs and Fast Track Taxi started out in 2001 itself with small fleets. The market, however, started seeing traction only from 2006 onwards when the likes of Meru Cabs, Easy Cabs and
Savaari came up. There are now several competitors eyeing for a piece of the pie.
Phase 1 – Fully Owned Fleets
In the initial phase of the market, companies owned the complete fleet with the drivers as salaried employees. This was characterized by high capital costs to the company – car loan EMI’s, high maintenance costs. While this model facilitated rapid expansion, it also came at a huge cost. Caused high-stress levels in drivers and there were driver strikes that affected the service.
Bookings were mainly done via telephone calls and cash was the dominant model.
Phase 2 – Fleet Aggregation Model
Companies like Taxi For Sure and Ola started this model where small fleet owners or single car owners can put the company brand on the car, and get registered with them. Cars are free to take up non-company rides, but for every company-initiated ride, they pay the company a fixed percentage as commission. This model had low capital expenditure and lower maintenance costs.
Booking was done via telephone calls as well as through their websites. While cash was still the dominant payment form, in-cab POS terminal for credit/debit cards started being used as well in this phase.
Phase 3 – The Hybrid Model (Current Phase)
In this model part of the fleet is owned by the company and part of the fleet is from an aggregation model, hence providing the best of both worlds – better control on cab availability and service quality while keeping costs low.
Booking is done via telephone, website as well as mobile apps and the payments via cash, card, and wallets.
The taxi business is growing at 20 to 25%in a year. The organized taxi sector accounts for just 4 to 5%of the industry and totals $800 million. It is expected to grow to $7 billion by 2020.
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