TAXI HAILING APPS: Will we ever see a successful driver led taxi app again?

As the dust beings to settle on the pandemic, focus returns to the sustainability and future of the taxi industry. One of the most hotly debated topics amongst cabbies sat on taxi ranks remains about how we will serve our customers digitally.

Many taxi drivers like the idea of a driver owned ‘co -op’ taxi hailing app, but the reality so far is that they fail to live up to expectations. So, what is holding the idea back and can it ever be successful?

If the product looks professional and ticks a lot of the USP’s demanded by cabbies, the recruitment of drivers should be simple. Especially if the app model is based on taking a percentage of the taxi fare, rather than a membership fee.

If the model is based on a membership fee paid monthly or annually then drivers will more likely want to see a return on their investment faster. That return needs to be jobs being offered to them via the app or proof of how their money is being spent to attract more work on the app.

After the first hurdle of attracting drivers to a platform, then comes the biggest and most challenging hurdle of all. Attracting passengers.

In a bloated ride-hailing and taxi market even those with huge marketing budgets struggle to be heard. Convincing passengers to change from a taxi app that they trust and like, will rely on it having an overarching benefit to force them to change. Unfortunately for many passengers, a driver-owned app is way down their list of priorities when choosing their form of transport to get around.

Price, fleet coverage, service levels and now also the environmental impact of the journey, far outweigh the fact that taxi drivers are the ones behind the app they plan to use.

According to a spokesperson from Black Cab Now, the number one factor that has stopped most driver owned taxi hailing apps is the failure to get passengers to use the app. A spokesperson said: “Their route to market has always been to try and get cabbies using their app who will then try to urge passengers who get into their cab to download it.

“The problem with this is that it relies too heavily on the drivers, it makes growth too slow and you still end up with the majority of London remaining entirely oblivious to the app’s existence.

“As such, the app doesn’t generate much business at all, and black cabbies are sat twiddling their thumbs waiting for something to happen.

“This inevitably will mean that the company cannot afford to keep running the app or keep carrying the costs. Inevitably they fail.”

Based on this, can a driver-led taxi app ever succeed? Yes of course it can, but it must learn from the past successes, and more importantly past failures.

The taxi industry has had several success stories throughout its iconic history. There were market leaders that brought new technology to the industry and had that vital unique selling point to entice passengers. ComCab and Hailo are two prime examples. The key was the offer of something new to the market. Re-inventing the wheel and offering the same technology and service already being provided to customers is unlikely to disrupt those already established in the market.

Dr Michael Galvin, a taxi industry and mobility consultant from Mobility Services Limited, said: “The history of the London taxi industry is peppered with the cooperative spirit. Groups of taxi drivers formed formal and informal

cooperatives to get radio circuits, associations, newspapers, Knowledge Schools, credit unions and importantly cab trade charities and the rest off the ground.

“Many of these pioneering individuals went to great personal expense, displayed huge passion and commitment in order to get their idea, goal, ideal off the ground. Most had reasonable success, especially the cab trade charities, even if in later times their efforts resulted in radio circuit mergers, acquisitions etc.

“The real point here is that culturally there was an appetite for putting effort, unpaid hours and sacrifice for the good of others and to achieve a goal. This was a time long before social media, mobile phones and email, which has made the coordination and organising of these things relatively easy when compared to earlier times.

“So why was this possible at the time? Was the demographic the enabler – many ex- servicemen, children of the blitz, former evacuees, many ex- trade unionists, a big percentage of the industry from a Jewish heritage? Could the lack of big business, private money and investment in the industry have been the fulcrum? Or were the incumbents of the industry at that time just a unique collection of idealists and pioneers who thought and believed that to quote an overused mantra – ‘we were better together’?

“So what of today? Many have spoken of getting together, a group of cabmen and women, and developing an app. Could that same cooperation transform into a co’app’eration? Who would lead it? Has the culture moved on and instead of getting your wife and kids putting cards through people’s letterboxes whilst drivers run miles for nothing to cover a job to ‘build up the work’ do people instead expect to raise £m’s and sit in an office with staff doing it all? Has the industry’s culture moved away from ‘better together’ to ‘better alone’? Has our institutional memory erased a cottage industry approach and replaced it with a venture capital mindset?

“Perhaps the past has had an impact on the present – the rows and arguments, the infighting and the envy of many of those cooperatives may have dampened the enthusiasm for leaders to emerge and for the sacrifice and commitment of the few for the many. Whilst involved with cooperatives myself the key lesson I took was that a small amount (money, effort, labour, brainpower) from many quickly came to a big sum. The diaspora of a cooperative can be infectious and powerful and big burdens can be lightened with many shoulders. The key of course is that some must lead and others follow and support. Maybe as a culture getting behind a dream, an ideal, a seemingly crazy idea is no longer possible, attractive or a good sacrifice of money, family time or free time.

“Cooperatives may seem old fashioned, out of vogue and at times unwieldy but they might still be the framework on which the taxi industry can build and develop. Only time will tell.”

Running a taxi app in today’s market is an expensive and specialised area. A team of energetic and enthusiastic jack of all trades can put together a nice-looking white label platform, but it will struggle to surpass a team of experts who can deliver something unique.

Without outside help, the taxi trade may struggle to build a service that meets both the needs of the driver and the passenger. A team of taxi drivers may instinctively look through rose-tinted glasses and create a model that leans to the drivers’ requirements rather than the customers.

So, what can be done? The taxi trade needs to deliver something new to its passengers that cuts through the noise of current offerings and in the meantime the search for the taxi hailing app Holy Grail continues.