Impact of Uber on Taxi Industry- Revolution in the Taxi services Business

Impact of Uber on Taxi Industry – Revolution in the Taxi services Business

Uber’s entry into the taxi business destroyed the monopoly faced by the drivers. Earlier to Uber’s presence, the taxi services were very expensive and deficient without a digital platform for booking rides. 

But now, the traditional taxi services are facing hard competition and challenges due to the rising demand for Uber rides. So, they are trying to adjust their business model to survive the competition. But every effort seems to go in vain with the robust business model of uber.

Uber has brought the biggest revolution in the taxi services model. The prices and safety it offers to its users have increased its market value. Seeing the flexibility it provides to its customers, most people turn to this platform.

Facts about Uber – A digital ride-sharing platform

Uber is a ride hailing taxi app that operates worldwide. Uber has transformed the transportation world. Uber uses smart technology to dispatch  drivers on passengers’ requests. The smart app smoothly handles the whole ride-hailing process, including the payment. Users also get discounts and coupons that help to attract and retain customers. It promotes cashless payment.Check out the in-depth Uber tutorial and user guide on the website if you want to learn more about how to use the Uber app or how to request a ride using the Uber app.

How does Uber Work?

  • You can install the app then first, and you need to create your account. For this, you need to provide your personal details and card details for cashless payment for rides.
  • When you need to book the ride, put your location pickup location. Then you can choose from the different ride options. Also, you can choose the uber pool option if you want to share your cab with other passengers. And this way, you can also save money as uber pool rides are comparatively cheaper.
  • Generally, uber cabs are 5 to 10 minutes away from the passenger’s location. When you book a ride, you see the cab and driver’s details along with real-time location tracking. The app informs you when the driver arrives.
  • After enjoying your ride, you can pay using the same app. Also, you can give ratings based on your experience. Moreover, you can also give a tip to your driver.

So, with all these positive impacts of Uber, the start-up entrepreneurs are also interested in starting their own on-demand taxi dispatch software for their taxi booking business to generate high revenue like the uber app.So,the uber rides have given a new shape to the taxi booking services which benefited both the customers and the drivers.

 Analyze the Market before Uber’s Entry

Uber and traditional taxi services both charge the customers based on distance and time. However, both the systems considerably differentiate from each other, which motivates the customers to choose the best one which is usually Uber these days.

Taxi services came into play in the late 1800s, but with Uber’s launch in 2010, the demand for traditional taxi services have declined significantly. Taxis started losing its customers with the existence of uber. The reason is less flexibility and convenience offered compared to the uber ride services.

Unlike uber, the traditional taxi business did not offer multiple payment tiers. So, the passengers were bound to a certain fixed behaviour for payment. Earlier to uber, the taxi services were local without the economics of scale. However, uber riders are available across the world.

Seeing the facilities that uber offers to its customers, it is not wrong to say that drivers earn more than when there were no uber rides. Also, with uber, customers got door to door ride services in a cost-effective range and with the expected time to reach the customer’s destination in advance, which was not possible earlier.

What are the Strategies Uber Uses in the Taxi Industry to Rule the Market?

  • Unlike the traditional taxi rental business, Uber has cut various transactional costs. But with the traditional taxi booking system, you have to pay a certain fee at every step of reserving the car. So, customers are free from these extra costs.
  • The emerging technology broke all the barriers, and uber has utilized the most of it in offering the best customer experience for ride-booking services. For example, GPS technology is used to monitor the ride and reduce travel time by offering the shortest routes.
  •  Uber offers a flexible pricing system, with no fixed pricing like the traditional taxi services. So, uber can lower and raise the prices depending on various factors. So, in the long run, people find it an affordable option.
  • Uber’s business model facilitates the users to rate their riding experience. So, the drivers have to maintain the quality of their services. So, users get the best services in return for what they pay.

Explore the Impact of Uber on the Taxi Industry

Uber offered a new landscape to the taxi industry by providing full-time jobs to drivers. Then another change that is observed with the advent of the Uber rides greater the number of people making requests on the application, the more the prices will climb up. 

In other words, uber has affected the old economic concept of supply and demand. So, there is no doubt that Uber disrupted the traditional taxi business.

Competitive Prices

Uber has different pricing schemes depending on the location. Uber has a business model that raises prices at peak hours. So, it is an added advantage for the drivers that they cannot enjoy traditional taxi services. On the other hand, the other taxi ride companies are doing hard to overcome the competition given by uber.

Increasing Income

Uber drivers can earn better than the other taxi drivers as uber drivers can make the best of their time using the uber software. With the increasing demand for uber rides, more and more drivers are collaborating with uber so it offers a higher employment rate than the traditional system.

Flexibility and Safety for the Drivers

Using the uber app, the drivers can feel safer as the riders need to register on the app using their details. So, drivers are not carrying a stranger as all their information is saved on the digital platform. 

It also offers complete flexibility as drivers don’t need to carry the cash for change. Also, they don’t need to worry about unpaid rides. So, drivers can report the unsafe and aggressive behaviour of the riders. And the same thing applies to the users.

Wrapping Up

Uber has become one of the most popular cab services providers globally. It has solved various issues of customers and drivers that they faced while using the local taxis. The growth of uber’s business model has inspired many startups to opt for taxi dispatch software to explore more opportunities in the ride-hailing business.

So, this is the reason that the traditional taxi booking system is vanishing with time. After seeing the above-mentioned facts about impact of uber on taxi industry no entrepreneur can resist taking his taxi services business to the digital platform.

For this, you can reach an experienced mobile app development company that can provide you with an uber-like app to run your business online. Of course, you need to get proper information about certain facts that can contribute to your business’s success such as features, target audience, pricing and marketing to grab your deserving place in the taxi services market.

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