In this article, we will be learning in detail about starting a taxi business. Running any business requires in-depth knowledge, strategy, and capital. Starting a taxi company is it an online taxi business or offline is no different.

This article covers all the core topics you need to know in order to start and run a successful taxi business.

How to Start an Online Taxi Business:

What is the taxi business?

An individual or an organization owning or driving an individual vehicle or a fleet of vehicles registered under a name is called a taxi business.

There are broadly two different types of taxi businesses.

• Radio taxi business model/ individual drivers.
• Taxi companies

What is Online Taxi Business?

online business varies a lot in operations and revenue modal. When it comes to a taxi business, one can make their operations very efficient when planned properly. In an online taxi business, all the bookings and operations are carried out online by a team or an individual. Manual processes like booking through call, calling the driver frequently for their location, and manual payment process will be handled by a central system.

Below are some of the key points one must know about an online taxi business.

1. These businesses use complex booking systems to handle their customers.
2. Manpower will be less compared to an offline taxi business as most of the core jobs will be handled by the system itself.
3. The capital required to start might be high because of the additional investment towards the booking software.
4. On the other hand, the operation cost will be less as you need only fewer employers to do the jobs compared to an offline taxi business.
5. The overall process will be efficient as most of the process will be automated by the system.

Typically, an online taxi business operates around two mobile applications, The driver app, and the passenger app.

Traditional Taxi Business vs Online Taxi Business:

Traditional Taxi Business	Online Taxi Business
A taxi business that handles all the bookings and processes offline typically through phone calls or in-person booking is called a traditional taxi business.	A taxi business that handles all the bookings online and automates most of its operations is called an online taxi business.
These businesses usually have more employees in order to handle all the operations.	Comparatively, they have fewer employees as most of their tasks will be automated by their booking system.
The booking process will be complex, time taking, and hard to track.	Since all the bookings are handled by dedicated mobile applications. The booking process is smooth and easy.
The capital required to start a traditional taxi business is less compared to an online taxi business.	As the business owner needs to invest in a booking system slightly higher capital is required to start an online taxi business.
The cost associated with running this type of business is high as a huge amount should be allocated for the employee’s salary.	The operation cost is low as less manpower is required to run the business as most of the process will be automated.
Chances of miscommunication and making general mistakes are high as there is no proper system in place	The chances of making an error are comparatively less as a proper system is in place.
Handling emergency situations will be a challenge. For example, if a passenger wants to raise a dispute then he needs to call or visit the cab company and proceed accordingly. The overall process is time-consuming.	If a passenger wants to raise a dispute the passenger application will have a function to do so, immediately the situation will be notified to the respective taxi company. The SOS button is the best example.

How Does Online taxi business work?

As mentioned earlier an online taxi business will work based on two mobile applications one is the driver app and the passenger app. Unlike a traditional taxi business, all the bookings and trips will be handled by these two mobile apps. These two mobile app operations will be handled by a booking system that is controlled by the company. All the trips, bookings, driver actions, and costs can be managed by this system. Usually, this will be a web interface(Cloud-based solution) that can be controlled from anywhere. 

Passenger mobile app:

All the bookings by a passenger will be handled by this passenger app. A simple working of a typical passenger app is listed below.

1. The passenger will enter the source and the destination in the app’s interface. Based on the complexity of the taxi business the app can handle multiple pickup points.
2. Now the passenger will have an estimate of the cost and time taken for the trip. If everything is ok the passenger will initiate the booking.
3. The app will receive the OTP, estimates, and the live location of the vehicle, and the details of the diver will be sent to the passenger after the driver has accepted the trip..
4. After reaching the destination, the trip is completed and the actual cost is sent to the passenger’s app and the passenger will pay by their preferred payment method.

Driver mobile app:

Trips, driver’s earnings, and bookings are handled by the driver app. Below is a simple working flow of a typical driver app.

1. After the passenger initiates the trip and the drivers near the passenger will receive the booking. 
2. On receiving the booking request from the passenger, based on the business model it is up to the driver to accept the request or reject it. 
3. At this point, the driver will have the option to cancel the trip for any reason.
4. After reaching the passenger’s pickup location the trip is started. Always the trip will be started by the driver.
5. If there is a feature to add multiple pick-ups or drop locations the route will be optimized accordingly. 
6. Finally, on reaching the destination the trip will be completed by the driver and the passenger’s payment will be initiated. 

Booking software(Admin panel):

The online taxi business owner or the company will have a dedicated admin panel that will have all the configurations and control over the overall process including the driver app, passenger app, and the bookings. Below are some of the core features in a typical Booking software admin panel.

1. Features to manage(add, edit and update) vehicles and driver details will be available. 
2. All the bookings including upcoming, in progress, and completed can be monitored within the admin panel.
3. And details about a particular trip including pickup location, drop location, the time taken to complete the trip, and cost will be available.
4. General settings like currency, time zone, tax, and other finance-related configs will be available.
5. All the reports like monthly earnings, yearly earnings, individual trips, and trip details will be available.

Future Scope of Online Taxi Business:

The online taxi business is one of the most lucrative businesses you can start now and see a profit. The demand for public transportation is more than ever and is constantly increasing year over year. As the taxi market is seeing drastic changes because of the evolution of mobile phones more business opportunities are created. According to stats from various sources, the Indian online taxi market was valued at INR 30.72 billion in FY 2020 and is predicted to increase at a CAGR of 12.93 percent between FY 2021 and FY 2025, reaching INR 55.15 billion by FY 2025. Even though COVID did a lot of damage to this business the market is recovering quicker than expected.

there are a lot of opportunities arising in this market every year. Some of the current business trends in this market are listed below.

1. Airport taxi business
2. Limousine service
3. Autonomous taxi service
4. Electric taxi service

Starting your own Online Taxi Business vs Registering your cars in Uber/OLA:

In the online taxi business market, unlike other business domains, one can start from scratch or they can register their vehicles under a marketplace like Uber, OLA, or Lyft. Though it may seem easy and cost-effective to choose a marketplace rather than starting from scratch there are a lot of perks and information you need to know.

The commission per ride: Businesses like uber and ola are earning on a commission per ride basis. This simply means when a particular trip costs the passenger 200$ then the company will get 40$(let’s say the commission to the company is 20%, so 20% of 200 is 40) and the driver will get 160$. Having taken away 20% from a trip is significant even though these platforms give business to the drives. In this case, having an online taxi business will have an advantage over this market if the pricing and commission structure is done right. This could be considered one of the major market gaps that businesses like Uber and OLA are still trying to optimize and individual businesses can take advantage of this.

Passenger Safety: Safety is one of the main concerns in the public transport industry even though both individual online taxi business owners and marketplaces like Uber/OLA are struggling in this area, most incidents have been reported in the latter. Because the qualifications of all of the drivers(also called radio taxis) joining this marketplace must satisfy particular criteria if they do then they are good to go.

Passenger ratings: For any business, feedback is one of the crucial factors to know what is the current position and what improvement can be made in order to better serve the customers(in the case of the taxi business its passengers). In ride-hailing apps like Uber and OLA, the driver rating is the main metric for judging the driver’s quality. It’s the only metric available for the passenger to judge the driver. Unlike an individual online taxi business, in the ride-hailing apps, all the ratings that you give might be to the individual drivers but actually, the businesses are the ones who are getting benefited.

Passenger loyalty: One of the metrics with which you can measure the success of a business is its recurring customers or customer loyalty. Generally, a taxi business operating in a city will rely on regular customers. These loyal or regular customers are different when you mention ride-hailing apps. Here is why the passenger becomes loyal because they like the driver and not the company itself.  But, people say that Uber and OLA provides good solution while recommending but in reality, it’s the driver who is providing a good customer experience. Unlike ride-hailing apps, this differentiation is significant in the online taxi business.

Trip pricing and regulations: In an online taxi business, a normal standard market price is applied, and based on the passenger’s trip the cost might be adjusted. This is usual in this business because most of the passengers are regular customers, and it won’t cost much to give a nominal discount on some trips.

Legal issues: Traditional taxi businesses are here for centuries and the markets have seen many disruptions. Legally, in the government’s view taxi business is saturated and they have clear rules and regulations to be followed. But in the case of an online taxi business and ride-hailing apps, the traditional ways cannot be adapted as it is. In this category, Uber has been facing several issues over the years.

Necessary things to start an Online Taxi Business:

Business plan

As a taxi business owner, you need a solid business plan and strategy. Considering the fact that the taxi business is in the market for centuries and there are many local taxi business owners who have a strong customer base and a profitable running business you must have a unique business idea to survive. In business terms, we call this the Unique selling point(USP).

Business location: Demographics is one of the key factors for any transport-related business. So do a fine amount of research in this area before starting your online taxi business. To get a brief idea about the demand for the taxi business refers to the below graph.

The above graph is just an insight into the taxi business in different parts of the world. If you know that there is a gap in the market in your local area or district you can plan the business accordingly.

Use an Online taxi application.

As mentioned earlier in this article, taxi application(apps) is the most crucial part that makes your taxi business successful. People opt for taxi apps over traditional methods because of their ease of use and business transparency. There are two types of taxi apps that you can use for your business.

Taxi app from scratch: If you have a business model that is brand new to the market and no feature in a traditional app suits your operation process then you can opt for a taxi application from scratch. Some of the points to consider are.

1. The investment will be large.
2. It will take more time to launch your app and to get stable after the app goes live.
3. You should also plan for spending on maintenance of the software.
4. Because it is a scratch development you can customize it however you want.
5. If your business is unique in all ways possible then you will be the first to the market with an application first of its kind.

Uber clone: The best part of the uber clone is that all the features are ready to use out of the box. Even if you have a business that is slightly deviating from the traditional taxi flow you can easily customize the existing uber clone app and go live in no time. Below are some of the points to consider.

1. All the necessary features are readily available out of the box and are highly stable.
2. In the online taxi business market, Uber is the most successful app yet. Having all the basic features that Uber has is more than enough to have a profitable business model.
3. You don’t have to invest huge capital in this Uber clone app compared to developing a taxi app from scratch.
4. Maintenance and cost for customizing the existing app are very cheap compared to developing your own solution.
5. If you feel that you have unique functionality that you can add to the existing app later and you need to start your business now. Uber clone is the best solution.

Develop Online Taxi booking software vs Uber Clone app:

Online Taxi booking software	Uber clone app
Investment for developing an application from scratch will always cost more.	As the application and functionality are available out of the box the cost would be drastically low.
Even after developing an application, it will take at least 1 to 1.5 years to get stable and fully market-ready.	All the features are pre-developed and it is market ready.
You might need to pay more for maintenance of the software specifically at the starting stage of the development.	If no special customization is done, utmost you will only be charged with the AMC(Annual maintenance cost).
Unless you have a new unique taxi solution, don’t need to develop a taxi booking system from scratch.	If you are operating a generic taxi business and want to add some unique functionalities Uber clone is the best choice.
The time required to develop a taxi application from scratch is more and will vary depending on your business needs.	With the uber clone app, you can start your generic taxi business operations within 3 days.
The customizability of the application depends on the architecture and the tech they have used to build the app. But, when this is not taken into account before the development, it will be much more complicated to adapt new changes to the existing app.	The Uber app is already stable and well-thought-out architecture, so any new features regarding the taxi business can be adapted more easily.

How Ruteappz is the best choice for Uber clone app script

We at Ruteappz, consider quality as the first point while developing an application be it an Uber clone app or any other product. Our Uber clone app has all the features that a typical taxi application has and also includes in-demand market features that we think it’s crucial for a taxi business to survive. Below are the features that are available out of the box.

1. Dashboard with all necessary stats.
2. Role management.
3. Vehicle management.
4. Driver management.
5. Transactions and revenue management.
6. Zone management(Geo zones).
7. Real-time notification.
8. Driver tracking on map.
9. Google Maps and API integrated.
10. Admin booking creation.
11. Report section with export options.
12. Any payment gateway can be configured.

In addition to this, we have driver and passenger applications. All the above features are fully customizable and any additional features can be added without any hassle. We take up to 2 to 3 days to host your application based on your business needs. We operate worldwide and have around 50+ customers live and the count is increasing monthly. So without any doubt, we can guarantee that Ruteappz is one of the best solutions for the Uber clone app to kick-start your taxi business today.

Conclusion:

The Online Taxi business is one of the most profitable businesses to start now. Having a unique business plan and strategy will go a long way in terms of profitability. Businesses like Uber, Lyft, and OLA are indeed struggling in one or the other way to maintain their offering. This does not mean that the market is down this could be a good thing because you as a new business or a small business will have an opportunity to make progress. When it comes to the online taxi business booking application is the keystone. The chances that your business needs a taxi application from scratch are too less and it’s not worth the money and the time spent.

FAQs