How to Build a Taxi App In 2021

Want to know how to build a taxi app that will become the next Uber or Carb? It is a reasonable question considering how convenient and cost-effective it is to use a taxi instead of maintaining your own vehicle. The best way for a cab company to ensure this convenience for customers is to build a taxi booking app.

According to the statistics, there are around 285 million cars in the US. Imagine how many are there in the world? Still, with such numbers, people need taxis because driving your car has some significant downsides. They are challenging parking, loaded traffic, and relatively expensive maintenance. The quantity of car owners is still increasing, which means that the offering on the market, especially for crowdsourced taxi services, is growing every year. And it still can’t surpass the demand.

That is why online cab booking software is in high demand nowadays. Statista predicts a 2.5 percent increase in taxi app users and a 60 percent increase in ride-hailing segment revenue in 2021.

You can see that joining the taxi industry today is the right choice. Investing your time and money in taxi app development would be wise because we can’t imagine a successful business without a mobile app. Thus, designing an application would be a great starting point. However, it is not as easy as it seems. 

First of all, taxi application development is somewhat tricky because ride-hailing is a complex system. You need three apps. Two are for riders and drivers, and one administrative panel to control their actions. 

Even discarding the complexity of the development itself, there is tight competition on the market. There is many online cab booking software, so you need to create something extraordinary to make users choose you over the others. 

In this article, we’ll share useful tips on how to build a taxi app and prove that together with a team of professionals, you can create the best taxi booking app.

List of the Content

• Most successful online cab booking software
• How to build a successful taxi app in 2021
• Before the taxi app development starts
• Core functionality
• Taxi mobile app development process
• Taxi application development cost
• In conclusion

MOST SUCCESSFUL ONLINE CAB BOOKING SOFTWARE

In terms of the intense rivalry in the ride-hailing industry, it’s reasonable to look up to its successful representatives while thinking of how to build a taxi app. Apps like Uber, Lyft, or Carb are worth analyzing because they hold the top positions in the taxi industry. Therefore, those who are only joining it have a lot to review and learn from them.

Some people may think that “How to build a taxi app” and “How to create an app like Uber” are synonyms. A custom taxi app and an Uber-like app are two different things. They share much of the functionality and work almost in a similar way, but to avoid any misunderstandings, let’s define these things.

Taxis Vs. Ridesharing

There are two types of companies that provide passenger transportation services: taxi and ridesharing. Taxis are an older and more classical way to do cab business, but people prefer mobility and choose ridesharing over it in the modern world. It is difficult for traditional ride-hailing companies to survive when millions of people prefer startups like Uber or Lyft. But there’s a reason for it: ridesharing is cheaper and easier. So, let’s take Uber and Curb as examples of these two types of taxi apps and see how they differ.

A traditional taxi company owns its registered vehicle fleet and staff taxi drivers who are completely insured. When a user calls a traditional cab, the process goes the same as in Lyft or Uber: the administrator sees your location, chooses a driver near you, and assigns him a ride. 

The ridesharing companies provide a useful platform for both sides: riders and drivers - it matches them within an app. It allows passengers to request a ride quickly and offers private drivers to work for a commission. 

Ridesharing companies do have a small vehicle fleet, but it is more a precaution than a necessity. They can allocate the car for a driver for a specific commission, but drivers who want to do ridesharing have their privately-owned vehicles in most cases.

So, the main difference is that taxi companies provide services only to passengers while ridesharing is for both passengers and drivers.

If you’re going to develop an application of one of these types, you should know its pros and cons.

First of all, traditional taxis are safe and secure for both drivers and riders. The taxi company entirely insures its staff workers. In contrast, rideshare drivers are covered under the insurance policy only when the passenger is in the car, and their application is running. Besides, while selecting the personnel, taxi companies check the drivers’ background very carefully, including even the fingerprint check, to ensure that they weren’t prosecuted. Ridesharing drivers are subjected to verification as well, but it is objectively not so thorough. 

Suppose you’ve ever hesitated about sitting in a car with a stranger. In that case, you’ll feel more comfortable in a taxi because taxi drivers have much to lose by somehow disappointing a passenger. The reason is that it is almost their means of support, unlike private drivers who may treat ridesharing as a side job. 

The ease of use used to be a problem because remaining “faceless and nameless” while using a mobile app is easier than when you have to make an actual call and talk to people. Today, taxi companies have made a big step towards mobility and developed mobile applications as well, and Curb is a good proof for it. Thus, nowadays, there’s no significant difference in the ease of use.

The described aspects may not bother most of the users, so let’s name some more visible differences for passengers. 

Ridesharing is considerably cheaper, faster, and more manageable. To prove a point, in the US, an average ride on Curb costs about $4 more (excluding $2 fees) than in the case of Uber. Waiting for the taxi will take about 15 minutes, depending on the district, and 3 minutes for a ridesharing driver. Also, using Curb instead of Uber, you may face the situation when the price estimate doesn’t match the actual price. But a classical taxi has its advantages while talking about costs - there’s no surge pricing at all. Thus, no matter when or where you order a cab - you’ll always pay for the distance you’ve passed.

One more downside of Uber-like apps is that if you ask a driver to make stops on the way, you’ll most likely get rejected. It depends on the driver, but Curb drivers would never refuse you to stop wherever you want.

Now, when you know the difference between these two types of transport services, let’s move to the part related to the taxi app development itself and see how online cab booking software works.

How Taxi Apps Work

Regardless of the app type, interacting with online cab booking software looks the same for the customers. When you order a taxi, an application follows such a workflow:

1. A passenger requests a ride by setting pick-up and drop-off locations
2. The system calculates the price
3. The system matches the driver and the rider
4. The driver receives a notification about a trip
5. He confirms the ride’s details or, as in classical taxi services, orders can be assigned automatically and the driver can’t refuse it
6. A passenger accepts the details and the cost
7. A driver meets a rider and delivers him/her to the endpoint
8. A rider pays in cash or a credit card (if a particular app foresees it)
9. The system encourages both sides to rate each other

This process is standard for both taxis and ridesharing. The only difference is if you want to make an app like Uber if the taxi service has its own vehicle fleet - orders can be assigned automatically. 

What Uber Does To Remain The Best Taxi Booking App

The taxi niche is quite competitive, and more and more startups and enterprises are entering it. With the growth of the taxi industry, the requirements change. That’s why if you want to stay in demand, it’s essential to keep up to date and implement new functionality to the existing online cab booking software.

The best way to find out how to build a taxi app that’ll be better than its competitors is to look up to those who’ve already succeeded. Uber comes to mind first. Millions of people in different countries are actively using it every day. Let’s see what Uber does to remain the best taxi booking app in the world.

Uber was the first ridesharing application. Its functionality was limited to the basic features for a couple of years, but then, Uber’s creative team understood that it’s time for a change. Since 2013, they started developing various offerings for users with different requirements. They imply different types of cars like UberBlack, UberKids, and others. 

Besides, they made some creative campaigns. UberKittens, for example. It allowed riders to request a 15-minute ride with cute kittens. All the money they then transferred to the animal shelters. 

Later on, they implemented parcel and food delivery and now even provide free rides if the volunteers send the food. More detailed Uber history is presented on their official website.

You can see that “How to build a taxi app” is not the most challenging question. “How to make it the best taxi booking app” is trickier. In order to anticipate the consumer demand, it’s crucial never to stay still and move towards new trends and business tendencies.

HOW TO BUILD A TAXI APP THAT WILL SUCCEED IN 2021

Looking up to the brands that have achieved great success, like Uber, Lyft, or Curb, is a great way to get your ideas. You can transform some conceptions they used and make it your own way. But copying the overall style and features will not make your custom taxi app successful.

Users will choose your app over the others only if you present them something unique, creative, something they’ll remember and find useful. That’s why novelties are precisely what helps taxi apps hold first positions on the software market.

Exploring this uniqueness leads to such vital points of the planning stage of taxi mobile app development as defining a niche, a UVP, and considering the expansion to other countries. 

Finding Your Niche

Exact steps lead to exact results. That’s why you can’t make something better than Uber by doing everything like Uber. Thus, it’s better to ask yourself not “How to create an app like Uber?” but “How to build a taxi app that’ll become the best one?”

Everything can be improved. Even the best ride-hailing applications have some disadvantages. By getting rid of them, you enhance your chance to develop a better product. However, trying only to improve the quality of the existing features is relatively ineffective. Instead, think about creating something unique.

There are a lot of niches in the market. Most of them are already occupied, but there are the free ones. Mostly, they offer something unusual. It can be bike-sharing, for example. It is clear they are not the most popular ones. However, you are not obliged to find a non-occupied niche and make it your only taxi business direction. Make it an addition to the classical ride-hailing service.

Try to look up to companies who have chosen a creative approach over an easy one. Here are some niche ideas for you:

• Taxi services for children or teens. Such an app might imply some additional functions for parents to control their children through a GPS as soon as they are alone in a car. Cars with children might also be restricted to a particular speed, etc. 
• Only women cab drivers. This idea might catch the attention of the progressive countries
• Electric cars only. Nowadays, when environmental pollution is as sharp as ever, environmentally-friendly vehicles would be a great option.

Defining The UVP

Suppose you’ve decided on the niche. But actually, none of them can be completely unoccupied. That’s why the question about the UVP is still relevant. The unique value proposition is a clearly defined claim that explains exactly what customer needs your product serves, what problems it solves, and why it is better than other products.
While defining the UVP, some innovative thinking would be excellent, but making up something way too offbeat won’t help. First of all, the UVP is the answer to a customer’s question, “What’s in it for me?” Thus, it should be understandable and straightforward, but still quite smart to snag clients.

To form the best possible UVP, analyze what the loopholes in your competitor’s apps are. Based on them, you can provide your users with:

• Discounts or prizes
• Fixed prices on well-known locations (e.g., an airport)
• In-app payment gateways. By the way, the opportunity to pay from within an app with an ably done payment gateway would make your app way ahead of the others. Read the article if you want to know how to add a payment gateway to an app
• No flat or surge pricing. Costs depend only on the distance. Such a decision might be difficult for a product owner because it markedly reduces the company’s net gain. However, it results in users’ trust, which is more valuable in the long run.

There are many more options for a UVP. Just do a thorough research of the competitor’s online cab booking software, and you’ll be able to answer the question of “How to build a taxi app that is different from the existing ones?”

Market Analysis

To cover up the part with the UVP, let’s say that global expansion would be one more option for a unique proposition. So, you should seriously consider it while thinking of how to build a taxi app. What startup or enterprise doesn’t want their product to become known worldwide? Global expansion is very beneficial for entrepreneurs. Brand recognition worldwide is impressive as it builds trust over your product and engages more users.

But before expanding your services globally, you should analyze the market to see what pitfalls might be there. Despite Uber being the main competitor in the ridesharing business, it is fully or partly unavailable in some countries. They are Canada, Hungary, Netherlands, some Indian and Australian regions, etc. Let’s see what’s the issue with Uber to avoid its mistakes.

Uber used to employ unlicensed drivers, which was unacceptable to many countries. Violent actions on the drivers’ part were the reason to ban Uber fully in India, and the restrictions in Canada are based on numerous conflicts between drivers and riders.

By conducting more thorough user and driver verification, you can avoid some mistakes, but the problem with licenses doesn’t go away as some countries prefer providing classical taxi services instead of Uber, and there’s not much you can do about it. So, while thinking about global expansion, choose the countries carefully.

The expansion to the foreign market also leads to some extra spendings during the taxi application development. The app that’s going to be operating in other countries, so it should be multilingual, include various currencies, and take into account specific market requirements. 

It might seem like an unnecessary investment, but the global expansion will lead to huge rewards in the long run. 

BEFORE THE TAXI APP DEVELOPMENT STARTS

Before you start to create a taxi app like Uber, you should do some preliminary research. First, it includes choosing a software development company that can be trusted. They will work on your project all along the way, so it should be a team of specialists who know their business. Secondly, an SDLC model and an engagement model are crucial aspects that affect the final result, quality, and delivery speed. However, you shouldn’t worry about it because these points will be discussed during the pre-development stage with the taxi app development services provider.

Let’s concentrate on the more specific questions that will be raised before the development itself starts.

Choose The Business Model

Needless to say that when you work on building an application, you want to monetize it. There are many ways to receive money from mobile applications, but they vary depending on the type of app and its peculiarities. Let’s see what options of monetization are available for ride-hailing software.

Commission from the trips. This option is quite self-evident. It is more about the taxi business altogether, rather than the monetization of an app. It implies that a particular percent of the driver’s income goes to the business owners. 

The riders just pay a bit more than they would if there weren't a commission percentage, but as for the drivers, it can be implemented differently. A driver might receive the full price of a trip first and then return some amount of money to the company or receive the net income at once. 

To illustrate, given that there’s a driver balance option within an app. In the first case, for a trip that costs $10 for a customer, all $10 goes to his balance, and at the end of a certain period, he returns a particular percent of it, and $9 remains on balance. The second option is when only $9 appears on balance initially.

Driver’s fees for using the app. It depends on the application, whether payments will be a particular percentage or a predefined sum. A driver usually pays it once a week or once a month, depending on the company’s policy.

Cancellation fees. This revenue more often comes from the rider, but some apps might want to implement this function for the driver. In both cases, when a rider or a driver refuses to take or give a ride, money should be taken from their account. 

Advertising. It is one of the most often used types of software monetization. It is even easier to implement in the case of mobile apps. A product owner runs some advertisements within an app and sets a cost-per-click or cost-per-impression commission. However, when using this strategy, you should be careful. Consider the placement of in-app ads, their amount, and relevance to the app’s content.

Subscription for additional services. If you can think of some premium offers, you can monetize them. If you can offer to the users something that your competitors can’t, make it a revenue stream. 

Of course, not all distinguishing features should be chargeable because, for those users who prefer the usual subscription instead of premium, your taxi app will be similar to the others. You can also consider such an option as freemium. It allows users to try some extra features before they decide to pay for it.

As for the premium features your cab-hailing app might imply, use your imagination and try to envisage what the riders might need and would be ready to pay for it. In light of the constant furry, your audience might find useful features that allow them to save some time. For example, a subscription for some trips they often take. You may also offer hidden phone numbers, super-fast taxi arrival, etc.

Do The Market Research

Market research is a crucial step in taxi application development. The understanding of what you can offer to your users that others can’t is achieved through the thorough competitors’ analysis and market audit.

Let’s start with the countries you’re going to deliver your product to. The USA and China are the two most significant contributors to the taxi business. Thus, choosing only them to launch your business might not be a reasonable choice. They might indeed be your main focus, but you should still consider global expansion.

Next points you should analyze include value proposition and niche analysis that we’ve already discussed. Apart from it, think about your primary resources. They include absolutely everything you might need during your product’s development and marketing (skilled staff, data analytics, risk capital, etc.) Business partners, key activities, marketing channels should be examined as well.

Market research, by the way, is among the taxi booking app development services. As a customer, you may explore all named points before you address the taxi app development company, but in any case, specialists will do it with you during the discovery phase. It is the first stage of software development when business analysts, project managers, designers, and other team members gather to do a thorough research of the market and discuss business strategies with the client.

Considering Hybrid Development

iOS and Android are the most popular operating systems. Users of both of them need taxi apps. Developing a ride-hailing application is quite expensive itself, and native development might not be the best option. If you’re willing to reduce the development cost, consider hybrid development.

In short, native development implies that you will have to build two separate iOS and Android applications. It means that you’re passing through the whole development process twice. It results in almost doubled costs for coding, design, and maintenance. 

Hybrid development allows using 80% of shared code to launch the app on both platforms. Apart from cost savings, you receive the final product faster. If you’re worried about the performance and its look, we’ll assure you that modern technologies allow creating cross-platform software that feels and looks native. 

Predicting Challenges

In the development process, you’re going to meet some challenges, and if you don’t anticipate any of them at first, you might get confused about how to deal with them. Thus, the best strategy to overcome the main challenges is to think ahead about what problems you may face.

The main challenges may be:

• Severe competition
• Engaging drivers and riders
• Gaining the users’ trust and excluding safety concerns
• Expansion to the global market

The competition has been discussed already. If you create an outstanding UVP, reasonably approach the whole taxi application development, and choose a skilled taxi app development services provider, there won’t be any problems.

Speaking of the unique proposition, you should remember that your product will become the best taxi booking app only if you pay enough attention to engaging both riders and drivers. This business has two groups of users, and the needs of each of them should be satisfied. Think about what you can offer to the drivers, so they choose your company to work in. For example, you can enable them with full access to the app without any fees for a certain period. The opportunity to earn more than on other platforms even for a restricted period might engage a significant number of users.

The critical aspect is trust. Why can your app be more trusted than others? What issues might appear while using other solutions? To solve safety concerns, consider meticulous verification for drivers, specific demands to vehicles, and others.

HOW TO BUILD A TAXI APP: CORE FUNCTIONALITY

The final product for taxi-hailing consists of three apps:

• Driver’s app
• Passenger’s app
• Administrative panel

The functionality for each of them differs at some points. Missing some functions is a dead-end, so exploring what features these apps need is crucial.

User Application

Core features of a passenger’s app are limited to:

• Registration
• Profile
• GPS navigation
• Push notifications
• Booking cancelation
• Cab booking
• Travel history
• Trip awaiting timer
• Customer support
• Driver rating

Advanced functionality may become your trademark. Here are some options for a passenger’s app:

• Interactive map
• In-app messaging
• Alerts of route change
• Driver choosing
• Favorite locations
• Discounts
• Voice recognition
• Split payment
• Various payment options

Driver Application

Driver’s application implies such features:

• Registration
• Profile
• GPS navigation
• Push notifications
• Booking cancelation
• Money balance

If you want to diversify a driver’s application, consider adding such functionality:

• Interactive map
• In-app messaging
• Waiting time tracker
• Route optimization (for example, bypassing loaded traffic)

Administrative Panel

The administrative panel has such functionality:

• Drivers and riders management
• Secure login
• Managing locations
• User support
• Rates control
• Roles and permissions

TAXI MOBILE APP DEVELOPMENT PROCESS

There is a chance that a customer doesn’t know how to build a taxi app. The process is indeed complicated because many people work on different tasks, many operations are occurring. Thus, we’ll shortly describe how the process goes step by step, so you know what to expect from a taxi booking app development services provider.

There are three main stages in app building workflow. They are discovery, development, and maintenance. Let’s look into each of these steps.

Discovery

The discovery stage is as important as the others though it may not seem so. Some people think that it’s not worth spending resources on, but eventually, it saves many. 

During the discovery, a client and a service provider work together to form an understanding of a future app and develop particular guidelines. Team members who actively work at this point are business analysts, a project manager, a product owner, and designers. During the discovery stage, the designers’ goal is to visualize what other team members describe verbally, and at the point of development, they do the full cab booking app design. They develop diagrams, charts, and later wireframes and mockups.

Taxi app development company forms a Software Requirement Specification document. It contains all data about the future app, including even the smallest details. Specialists start filling it in since the very first meeting with a customer.

At the end of the pre-development stage, both sides receive a clear understanding of the application logic. It is thoroughly described in the SRS document and supplemented by wireframes, mockups, and other additional files.

Development

This stage is probably the most demanding. While coding, programmers use the SRS document where all the software requirements are captured. QA engineers regularly test the app to make sure everything works correctly.

Taxi app development companies use different SDLC models. SDLC stands for software development life cycle. An SDLC model defines what steps specialists do to achieve the expected result as a final product. Mostly, the stages are the same. They are:

1. Requirement gathering and analysis
2. Design
3. Development
4. Testing
5. Deployment
6. Maintenance

Regardless of the SDLC model, software passes the same stages, but some methodologies are more flexible than others. Agile, for example. It has established itself as a credible and robust methodology. Its primary focus is the customer relationship. Agile allows shifting away from the initial plan in favor of the client’s needs. With Agile, specialists can make some changes in the app’s structure right in the middle of the development, unlike the Waterfall model, for example

During the development, a company that provides taxi app development services launches the app's demo version to different platforms to see how it functions. As a customer, you try it as well and let the development team know whether you approve everything. If so, they launch the final version to AppStore, and the stage of support, maintenance, and updates begins.

Support, Maintenance, and Updates

This stage requires the least customer involvement. The service provider’s team is responsible for everything during the support, maintenance, and updates phase. It starts right after the product is released and lasts years after it. Specialists systematically update a taxi app, fix bugs if there are some, and make refinements. 

TAXI APPLICATION DEVELOPMENT COST

We’ve discussed how to build a taxi app step by step, and we’ll now see how much it’ll cost. We can’t name a defined price as there are too many changing aspects that form it, but let’s do a preliminary estimation.

Development Team

The first important price forming factor is the development team. What specialists will be in your team depends on the project's specifics. Developer salaries are not the only thing that constitutes the final price but is an essential one. It differs very much depending on the region, so we’ll use the statistics relatable to the US to be precise. Altogether, the elemental team composition and presumable members’ salaries are:

• Business analyst - $60
• Project manager - $60
• UX/UI designers - $50
• Back and frontend developers - $70 per each
• QA specialists - $40 per each

Presented numbers are hourly rates. They are valid for specialists with about four years of experience.

Taxi App Development Timeline

The project’s timeline estimation is done during the pre-development stage. When specialists gather all requirements, they have the foundation to name the anticipatory duration. It depends on the app’s specifics. Not knowing all that, we can make only an approximate estimate of the time frame. 

Presumably, a driver’s app development will take three months, two go for a passenger app, and one for the dispatch panel.

With these numbers, you can evaluate how much costs will be incurred for the salaries.

Final Price

For those who don’t want to do any evaluation, we’ll give the final approximate numbers. The price will differ depending on whether it is a hybrid or a native approach. We’ve already talked about its pros and cons, so let’s see the raw numbers.

In case of native development:

• An MVP with basic functionality would cost about $80k per platform
• More complex app with advanced functionality - $200k-$300k per platform

In case of hybrid development:

• An MVP with basic functionality - $90k
• Taxi app with advanced functionality - $250k-$350k

Development costs may rise if a customer seriously approaches the project and chooses a company that will take care not only of the development but the marketing campaign as well.

CONCLUSION

Now you know how to build a taxi app that will become successful and gain users’ trust. The process is complicated, but with the right team it won’t be as difficult as it seems at first. Our specialists will help you choose the best technology stack, SDLC methodology, and engagement model.