Nowadays, the taxi market is a high-competitive niche. And to be competitive, a mobile application is essential.
After the Uber revolution, many businesses have started to invest in ride-hailing app development and adopt the same business strategy to receive a profitable revenue.
Do you want to enter the taxi booking industry?
In this article, we are going to tell you, not only about how to build an app like Uber and the development cost but also about strategies to beat Uber and gain your market share.
Now, let’s begin.
As we said, the market for booking taxi applications has significantly grown in the past few years. Still, Uber remains the industry leader. Currently, Uber global market value in $72 billion.
- Uber generated $12 billion in gross bookings in the most recent quarter.
- Uber has completed more than 5 billion rides.
- In the United States, Uber fulfills 40 million trips per month.
- In 2017, taxi booking apps like Uber, Lyft, Ola captured a significant taxi market share of more than 40%.
- As Statista reports, by 2020, in the US, taxi service revenues are expected to reach 2.81 billion dollars
Image source: Statista
- And the worldwide taxi market is expected to show a compound annual growth rate of 9.22% by 2024.
To conclude, the taxi industry is expected to grow, as well as the number of taxi-hailing mobile apps.
Still, you can take a moment to develop a cab service app and acquire your market share.
How to make an app like Uber and stand out among competitors?
Find the answer in the next paragraph.
With over 91 million monthly active users, Uber remains the strong competitor for all taxi-booking startups.
Image source: Statista
Still, here are some ways to compete with Uber, as described below.
Your app for taxi service should be attractive for both drivers and riders. For that, you need to create a unique value proposition for both sides.
Here are some examples:
The value proposition for the customer. You should motivate passengers to use your app by offering them something your competitors do not have.
That might be:
- The option to track the driver arriving
- Free rides or discounts on certain occasions
- A fixed price for common destinations such as Railway stations or Airports.
- The in-app payment gateway for cashless transactions
- Estimated duration and cost of the ride
The value proposition for the driver. How to attract drivers to your taxi services if there are so many competitors? You can choose the following:
- Insurance coverage
- Opportunity to earn more in peak workload
- Low barrier to entry or no investments to join the business
- Flexible working hours
- Easy procedure of mobile payment
There could be even more options to attract users to your app and stand out among competitors.
Let us move on.
Apart from a unique value proposition, you can find a free niche in the taxi booking app market and succeed in it. For instance, electric cars.
Since people are more concerned with ecological issues, they make conscious choices toward the environmentally-friendly means of transport. Thus, an eco-friendly taxi app would be a great idea.
An example is Green Cabs Taxis, a leading New Zealand environmentally-friendly taxi company. The company positions itself as guilt-free because they use electric vehicles and add tree-planting donations into each fare.
But there is more.
Another perspective niche is taxi services with alternative vehicles, such as motorbikes.
The two-wheel taxi niche has low competition because offering on-demand bike taxi is, at least, unusual. There are several successful companies in this niche, which are based mainly in big cities.
Let us check some examples:
- GrabBike mobile app operates in such Thailand cities as Bangkok, Nonthaburi, Pratumtani, and Samut Prakan.
- Rapido application is available in 40 cities across India. The app counts over 2 Million app users and 10+ million rides.
- Limobike provides a bike taxi in London, UK. Currently, the company does not have a mobile app but receive applications via a contact form.
On-demand bike taxis are also available in Brazil, China, Pakistan, and the USA. Still, not all of them have a mobile bike taxi booking app. Therefore, you can launch the first bike taxi service app in your country and succeed in it.
When thinking about how to make a taxi app, you should not limit your business idea within the borders of your own country.
That might sound surprising, but there are still countries where Uber is not available. For you, as for the prospective taxi app owner, this situation creates a perfect market opportunity to build your taxi-hailing services.
Currently, Uber is not presented in Brunei, Oman, Malta, Iceland, Luxembourg, and Cyprus.
Sounds great, right?
Now that you have an idea of how your taxi app will beat Uber, let us continue.
Even with an outstanding unique value proposition, your app should be profitable for your business.
But, how to start an app like Uber and make money from it?
Read on and find out!
Uber has two sources to earn money:
- The app charges a commission from drivers
- Uber conducts marketing campaigns with other businesses.
Now, let's take a look at them in more detail.
Commission from drivers and passengers. When the driver receives an online booking via the app, Uber charge commission for each booking. The commission varies between 20-25% of the total ride cost.
Service fees. Apart from driver commission, Uber charges passengers a flat booking rate. When applying this model, you might add other costs as for security, service, or money transaction.
Cancellation fees. You can charge this type of payment in case the passenger cancels a ride.
Third-party promotional. Uber makes money from promotional collaboration with famous brands like Hilton, Pepsi, Spotify, and more.
In this case, it is a win-win situation for all parties. While Uber receives money for promotion, brands interact with app users, and the app users receive benefits, gifts, and treats from marketing campaigns.
Advertising. If you are not ready to run marketing campaigns with famous brands, you can use this option. You can charge a cost-per-click or cost-per-mile commission from local businesses for running their advertisements in your application.
Quite a lot of ways to monetize an app, right?
Now, let us check what features are necessary for your future Uber-type application.
Before we dig deeper, here's a vital piece of information about Uber. Uber developers used a set of 3 different products. They are two separate apps for passenger and driver, as well as an admin dashboard.
- Registration: User can directly register in the app using his profile on existing social media or create a new one.
- Taxi booking: User can hail a cab or book it for later. Your taxi booking app can maintain both options or have only one of them.
- Payments: Adding this feature enables to register a passenger's app and provide auto payment right from the app.
- Push notifications: Show all the information about the trip when the driver accepts the request. Also contains the vehicle information such as model, passenger count, color, and the number of the car and average time of arrival (ETA).
- Ride History: Shows a complete transcription of previous trips.
- Fare Calculator: Helps to calculate the cost of the trip.
- Driver's review and rating: Shows customers' comments about the driver, his car, and the travel safety of other passengers.
- Pickup Location: By using the built-in GPS module, a passenger can point out his exact location without typing an address.
- Split Payments: Provides an option of separate payments between a few passengers.
- Vehicle Selection: Allows picking another driver for the trip.
- Interactive Map and Taxi Tracking: Shows all the cabs nearby and tracks the driver during the journey in real-time.
- Built-in Messenger: Ensures communication between passenger and driver right in the app.
- Gamification: Allows boosting customer acquisition and retention with badges, special offers, leadership boards, etc.
- Discount: Gives a discount for trips by adding code or digital coupon.
- Voice Recognition: Enables the usage of voice commands for taxi-hailing.
Uber's Drivers App
Some features of the driver's app may overlap with the passenger's taxi booking app. For instance, registration and personal profile editing (with an additional option of documents and driver's license uploading), push notification and messenger, etc.
At the same time, there are also some unique elements for drivers:
Makes a driver visible in an app and on the map if he is ready to pick up a passenger.
Informs about a new trip and shows payment and road details. Also, it allows for getting or canceling orders.
The app shows the path to the passenger and the best route for the trip.
It ensures the count of trip costs and discounts.
Show statistics about trips and earnings.
An admin panel is usually a web-based software that helps to store database and manage passengers and drivers' activities.
The dashboard gives a general overview of all processes, provides logistics of drivers and trips, and manages all financial issues. It also could be linked to Google Analytics tool. The last feature is essential for marketing activity monitoring and can be the starting point for the revision of the entire business process.
There is one more important thing that should be noted while planning a taxi booking app development. According to legislation in some countries, the admin dashboard is strongly required even if it seems to be functionally unnecessary in your business model.
Read also: How to Integrate Uber API to your app
To create your Uber-like app, you and your taxi app development team should go through the following stages:
This stage includes:
- Evaluation of the app business idea, market analysis for further app opportunities and niches, perspectives for revenue generation.
- Gather requirements for taxi mobile app development and improvements that can be made and investigate new, better ways to create the product.
- Defining the work scope and developing the project roadmap.
- Setting a realistic budget for the app MVP.
Here, the development team will:
- Create detailed technical specification of product functionality, the app architecture, and tech stack to be used.
- Create the project requirements such as nonfunctional requirements with the general characteristics of a system, and functional requirements that describe how a product must behave, what its features and functions are.
- Then, the team shares these documents with stakeholders. After stakeholder improvements, the steam starts the next stage.
The taxi application development stage includes:
- Dividing each project part into different tasks
- Starting to implement each task based on their priority.
- In the end, Uber-like app developer conducts unit testing to find logical errors
- Then, the app moves to the testing phase.
- After successful system testing, the app is moving to the next stage.
At this stage, the team will:
- Taxi app developers deploy the app to the live environment to ensure that it runs properly on all devices.
- Deploy your taxi booking app to App Store, Google Play, or other app marketplaces, so that users can download it.
The taxi app developer provides customers with app technical support and maintenance for the following reasons:
- After a few days after the deployment, some errors might occur
- You may add any enhancement to improve your app
- Operating systems such as Android and iOS might release new versions that impact app functionality.
And now, it’s time to use your calculators.
Because now we will estimate the taxi app development cost.
The Uber-like app development process starts with building a minimum viable product. MVP includes the app both for demand and supply and the dashboard, but with limited functionality.
For example, the first release of the Uber app didn't contain any gamification features or cost splitting. But, it helped to connect drivers and passengers and allowed to make payments right from the app.
After the first version is released, you can test the strength of the idea and market facilities and start to add features.
Uber app development cost depends on a lot of factors and features that are to be implemented.
But anyway, there is an essential set of parameters and required time for each scope of work that can be taken into account and calculated at the early stage of development.
The charts below show the average time for every stage of work.
Estimation in hours
Maps and Location
The technology of GPS tracking is used to determine the current location, find cars, and track the route. Besides, the exact journey tracking gives the taxi fare estimation.
Built-in payments let the user make a purchase right from the app. It saves a ton of time and delivers your application to a brand new level of usability.
Log in and profiles
The necessity of authorization has several reasons.
Firstly, for online payments, it is a must.
Secondly, it makes the option of ratings and reviews more personalized.
After all, it improves customer loyalty and increases their retention.
When building the first MVP, push notification is enough to set the connection between supply and demand.
Considering the mandatory time, you can use our app cost calculator and check the cost to build an app like Uber.
Funds for the project are as follows:
Still, how much does the app cost?
Well, it depends on the app development company’s rates. According to Statista, the average rate varies due to the location:
- North America — $60-250 per hour
- United Kingdom — $60-150 per hour
- Western Europe — $40-120 per hour
- Eastern Europe — $20-100 per hour
- India — $10-80 per hour
Now, let’s sum things up.
Despite Uber’s large share of the taxi-booking app market and aggressive expansion strategy, there is still a niche for innovations.
By using our guide, you can create your taxi booking app with a unique value proposition, find your niche, and apply a profitable monetization strategy.
Don't chase the features and sophisticated technological solutions. Like you, our team tends to create a solution that will fit your requirements and achieve your business goals. That is why we endorse building MVP first which can save you up to 30% of costs and time.
Have an idea for a mobile app?
Get your free quote