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Taxi Service Apps Disrupt the Traditional Companies

taxi appsAlthough an increasing number of taxis are equipped with embedded telematics units, this is being overshadowed by the rapid rise in popularity of smartphone-based taxi apps, which enable passengers to order a taxi and the driver receiving pick-up requests directly via their smartphone.

According to the latest market study by ABI Research, most capital cities nowadays boast a number of smartphone-based taxi service apps.

Some of the better known online services include Allocab, Hailo Cab, Uber Taxi, Easy Taxi, Kabbee, mytaxi, GetTaxi, Taxi.eu, Didi-Dache, Huaidi-Dache, MiniCabster, Chauffer-Prive.com, and Yongche.

However, not all the smartphone software applications are the same, although the majority operate on a peer-to-peer basis -- thereby by-passing the traditional taxi companies.

"Some, such as Hailo, work with the independent taxi drivers, but not the established taxi companies," said Gareth Owen, principal analyst at ABI Research.

Others such as Uber compete against both established taxi drivers and taxi companies, while a third type such as Kabbee offer a smartphone-based price comparison and booking service for established taxi and private hire fleets.

Taxi apps thus have the potential to disrupt and transform the traditionally heavily-regulated taxi market in many major cities around the world forever. However, the taxi companies are fighting back and the industry is planning to make life increasingly more difficult for the app start-up companies.

In a number of countries, the regulatory authorities plan to issue guidelines on the use of taxi apps, particularly in relation to driver distraction issues, as well as dealing with problems concerning fare payments via smartphones.

In China, where telematics is mandatory in all taxis, the authorities have banned the use of taxi apps in some cities.

Despite the regulatory uncertainty, taxi apps companies, many of which are backed by high-profile tech entrepreneurs, are now embarking on a global expansion campaign in a bid to gain market share.

Although it remains to be seen whether these companies will ultimately become profitable, the sheer convenience of these taxi apps means that very few of those who have used them will want to do without them, and so taxis apps are probably here to stay.

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