After the massive revolution set by the Uber in the cab booking industry, many startups, entrepreneurs and businesses came something with the same idea for their products and services to repeat the success in many different business models. Not only did Uber provoke thousands of other small businesses and entrepreneurs to start an on-demand taxi booking app and other services but also told what kind of business strategy should they embrace in order to enhance customer satisfaction and profitable revenue. A quick stats by Statista, By the year 2020 – 2022, alone in the US, it is projected that the revenue of taxi services would reach 2.72 billion dollars.
In this article, we’ve covered the potential value propositions for both riders and drivers, let’s take a look at the revenue model a successful taxi booking app business.
To make this as easy as possible, let’s take a closer look at the well-known American Uber taxi app. Let’s find out what their source of income is!
Revenue Models for Taxi Booking App Business
Taxi booking business can earn their revenues in multiple streams. Before look into it, the study of the standard plan to create steady inflow and profit is needed. On the basis of the customer requirements, the taxi booking app provided diverse levels of services.
Different Vehicles for a Different Type of Customers
Do you remember the times when everyone was traveling in the same typical yellow or white taxis? These are now because today customers can choose the type of vehicle they want to drive themselves.
- Revenue from Individuals
In the lowest view, taxi, one of the transport modes to support the movement of the peoples from one point to another. This mode of transport can be expanded for a large group of people movement. The movement may be two points of the city or between the cities. In addition to that, the sharing of ride experience with someone to the other peoples help to gain more revenue.
- Revenue from Services
The taxi booking platform inherits the number of services. If we look into Uber, they expanded the services to different kinds of peoples. Example: Uber Black, Uber X, Uber Go, Uber Luxury. These are all created wide revenue for the service providers.
For example, there are Uber Black – for those who prefer to drive in a black car, Uber Taxi – for those looking for a more economical solution, and Uber SUV – for those customers who want a luxury ride. Uber offers its customers the opportunity to choose the type of vehicle they want to drive themselves, giving the whole thing a completely new taxi booking experience based on specific customer segments. Providing the same services to different peoples and different domains help to earn more revenue.
- Dynamic Pricing Model
It is otherwise termed as surge pricing. Here, the price is not fixed. It can be dynamic based on traffic, demand, and supply. An essential aspect of the Uber App is its convincing pricing.
An essential aspect of the Uber App is its convincing pricing. Usually, taxi companies raise rates for their travel expenses when demand is higher than supply. Uber’s contrast, prices depend on the density of traffic and the travel time from one ride to another.
In the price per kilometer automatically changes depending on the number of available drivers and requests made by customers who need a ride. This pricing algorithm is designed to encourage drivers to get on the lane when they need it most.
Uber now also offers boats, helicopters and other additional transportation. They have also set up a motorbike pickup service in Paris, a delivery service in San Francisco and in some cities even an ice cream cart delivery service and more to follow. However, these options are only available in specific cities but represent new sources of income as a supplement to the existing business model.
How SpotnRides Increase Revenue for Taxi Booking Business?
Following their successful blueprint of Uber, we have developed product names “SpotnRides” to satisfy all the requirements and benefits for any startups or business owners to launch their on-demand business with any kind of business and revenue models. Our product can be customized with any language and currency including any features requested by our customers.
With the above basic features, there are also different channels used by the cab services to create revenue. They are listed as follows:
- Customer Segmentation
On the basis of certain preferences like behavior, financial status, customers are categorized into various groups. This practice requires the entrepreneurs in the taxi business to develop the fittest strategy according to customer behavior. A demographic distribution such as the categorization of peoples on the basis of age, location, lifestyle is the one way of categorization to add the revenue. Decision making through interactive conversations between the customers and the app service providers is the other way to boost up the revenue.
- Customer Data processing
Maintaining a robust database is the key factor for increasing the revenue of the taxi book app. If the frequent user’s database maintenance is achieved in a perfect manner, then the outstanding services are delivered to the customers and that boosts the revenue effectively.
- Charges via Subscription/cancellation
In recent years, the lot of e-hailing services introduced the subscription model especially dedicated to daily customers. The introduction of a subscription plan does not only enable the users to pay the flat charges for the same services. It also sets the time limit for a minimum number of subscriptions to ensure continuous usage and yields better profit. In the same way, setting the time limit to cancel the rider that reduces the wastage of resources.
Those who are looking to launch their business, feel to discuss with us about your business model and we will help you to launch your next level new venture with the working revenue models.
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