Challenges Encountered by Online Taxi Booking App Startups and the Ways to Sort It Out

The on demand taxi hailing app startup market is over-crowded with a zillion small, medium and large firms operating from small towns to large metro cities. Obviously, this taxi market is facing a lot of challenges both inside and outside. But, the demand for it never seems to slow down. I am saying this confidently because, in the last 5 years, people think twice before buying a car because of the ease with which they get a cab for any rides. This is evident from the slowdown in car sales across the world.

So the no. of entrepreneurs and businesses entering the taxi booking economy will not stop. In this blog, I have explained the challenges faced by the taxi industry and the ways to sort it out. Entry-level taxi startups and those who are planning to launch one must know the challenges so that they can make well-informed decisions.

Why Running an Online Taxi Booking App Startup is Demanding?

Competition in the taxi market

Cut-throat competition may seem like an unfair disadvantage, but this is what drives many startups to explore new avenues and bring innovative and creative features, services, etc. And it is obvious that competition is integral to any popular businesses. 

Artificial intelligence, Machine learning, Big data, Augmented reality are some advanced new-age technologies that are being applied in taxi booking apps. The type and scope of these technologies are unlimited and it is up to you to find it. The new design and features to take on the competition must be futuristic and at the end of the day, it must benefit the users and not burden them.

Finally, the key is to make changes that are enough to stand out from others. Here are some things that can potentially give your startup an edge over others. These creative features are just the tip of the iceberg. 

  • Carpooling with split fare
  • Geo-fencing based targeted notification
  • Rider mobile no. hiding
  • Emergency panic button
  • Rider location link share to contact
  • AR-based navigation
  • VR based driver skill check

Getting good drivers

Off late there have been many instances of taxi cabs meeting with accidents and rash driving. Such incidents will surely make the riders move to alternate startups or other modes of transport. Having unskilled and amateur drivers are the reason for this. And taxi startups too are focussing extensively on background check which is good but the driver’s skill cannot be compromised.

The admin can constantly check the type of driving indulged by drivers from the admin panel and also by asking specific ratings from riders. Immediately license can be revoked for unruly drivers.

As I said earlier, you can take a look at Virtual Reality based driver skill testing where the driver applicants are subjected to simulations and only those who pass certain standards are admitted.

Get Free Demo of Taxi Booking App  – WhatsApp | Skype

Taxi allocation during peak times

This problem is more to do with the structure and quality of app solution than any other factor. A ride is allocated to the nearest taxi based on a matching algorithm. If the algorithm is made with poor code quality and small database, the time of allocating a ride extends and this frustrates riders. 

Now there are AI technologies which make the matching of taxis so quickly. For this, you need to consult your app solution development company and make re-write the matching algorithm using AI. This is one of the hidden applications of AI and machine learning.

App development for your startup

The biggest cost in starting a taxi startup is in app development. Since all the taxi startups operate using the Uber model, they need not spend on cabs or any other infrastructure. 

The app solution is comprised of two mobile apps and a web admin panel. There are two options to get the app solution for taxi startup. One is to develop it from scratch and another by purchasing readymade pre-built solutions from experienced app makers.

The former method costs around $30,000 – $40,000 and takes a lot of time which is next to impossible for many. The latter method of purchasing a solution is cost-effective and can be made live in a matter of a few days. Also, it is possible to integrate similar features from other taxi apps like Lyft, Ola, Go-Jek to the taxi app solution by the taxi app vendors. The maximum cost of it after all customizations will be $10,000. 


Funding is always a challenge for many startups and on-demand taxi startups are no different. Outside investment like venture capital, angel investment, seed funding, and private equity is difficult to get since they want someone who has the potential to stand out from others.

So being different and having the resilience to face competitors are prerequisites to get external funding. 

What SpotnRides can do for you?

Earlier I said about purchasing readymade taxi app solutions from app development vendors. SpotnRides is one such app maker. Our firm is striving in every possible way to help new and existing taxi startups to eliminate the above said challenges using our taxi app solution.

Our team is constantly working on creating niche features for taxi apps and we also consult our existing clients to get feedback. One such feature is the updated AI based taxi matching algorithm.  

SpotnRides taxi solution is a minimum viable product and open to any type of modification. So design changes, API integration, new feature addition, and other customizations are not an issue for us.

Right from conceiving the idea, customization, app deployment till post-sales technical assistance,  we will do everything at one-third of the cost required to develop from scratch.

I hope you are convinced about us and to know more about SpotnRides taxi app, its features and customization, drop a message to [email protected]. We are waiting to answer you and partner to launch never before seen taxi app.

Get Free Demo of Taxi Booking App  – WhatsApp | Skype

About the author


I am working as a Senior product developer and have developed and delivered Web and Mobile products for numerous clients.

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