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There are not many players in the market who can make it big by challenging a convention. Even if they do, it is not always the first player who gets it right. We have seen Microsoft fail with tablet PCs while Apple succeeded. However, when it comes to taxi booking applications, Uber holds a very special place. It was the first to create a culture of booking a taxi using an app. At the same time, it also found its success by becoming a company worth more than 70 billion dollars.
In all of this, it cannot be forgotten that there are people who would like to stick to the traditional mode of booking taxis. Even if not for the mode of transport, they would at least prefer familiar brands.
How do Location-Based Taxi Services Work?
Uber created a flip in the way the taxi industry functions. The industry was no longer centered around the service provider but around the customer. The customer did not have to walk to a place to hail a taxi. Instead, they could book a taxi to pick them up at a specific location.
To appreciate the way Uber changed things, it is important to understand how location-based cab services work. There are three aspects that are needed for the smooth functioning of the cab service.
The user should download an application and the application should enter vital information like the user’s contact details. The application also has access to the global positioning system which can pinpoint the exact location of the user. The app has a history of all the rides the user has ever taken. There is also a facility to integrate digital payment instruments including cards, wallets and net banking.
If a user sends a request for a cab, the drivers in the vicinity receive a notification requesting a ride. One of the drivers can accept that request. When the request has been accepted, the user’s exact location will be displayed. Using mapping services, the driver can easily navigate to that particular location. Once the user boards, the cab driver initiates the ride. Based on the distance traveled and a lot of other factors like traffic and demand, the users are charged a fee for their ride.
Overseeing these above-mentioned segments is an administrator who acts like the big brother monitoring all the operations and activities in the application. The administrator has the power to add or delete users and even suspended drivers based on their behavior.
Where Does the Revenue Come From?
If not for a service like Uber, the cab drivers would not be fruitfully spending their time - they might get relatively fewer bookings. For facilitating this particular business, Uber takes a commission from the drivers. It also charges a cancellation fee from users if there is the right cancellation after a certain stretch of time.
Of late, taxi booking apps like Uber have introduced a subscription model. The users can pay a subscription fee after which they will be charged a flat amount for a specific distance. This might not look like a lot of revenue in the beginning, but the way it keeps users hooked to a brand is where the revenue comes from in the long run.
Creating an App like Uber
Ten years ago, if you were to tell that you have an idea to create a location-based ride-hailing service, it would have been quite an impossible task. The time taken for development, the resources, and the legal formalities would have been major hindrances for getting your services up and running.
However, big players have already cleaned the roads for us. It is just a matter of time before you get all the formalities done. Even when it comes to development, there are Uber clone apps available in the market. All you need to do is pick these white-label applications and rebrand it with your elements. A process that would have taken months together is now ready in a matter of days!
How Are the Locals Capitalizing on This?
We did see a while ago that there is a market for local brands. Today, these local brands are bringing the advantages of Uber but without losing their brand identity. The availability of Uber clones has given a fillip to these local players.
If some taxi company has been operating in a particular place for an extended period, people are probably familiar with the brand. If they launch their own taxi booking application, people are quite likely to engage with this brand. Even if a new player comes in, and even if it is a global leader like Uber, it might not be possible for the new player to crack the market. Trust plays a very important role in the business being operated.
Conclusion
It is only logical and expected that a global revolution will take in a local dimension after a certain point in time. Crispy fried chicken which was once a craze (because of KFC) is now available across every street corner. You are more likely to buy from an established restaurant that serves fried chicken right? In the same way, if a local player uses an Uber clone app for facilitating their taxi services, it is only expected that they will do better revenue in the local.
However, even if there is local competition, it cannot be denied that Uber stands tall when it comes to globally being recognized for location-based on-demand ride-hailing services.
Originally Published in https://www.codemade.io/why-uber-is-losing-its-grip-with-the-local-taxi-industry-going-for-uber-clone-apps/
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