Uber and Lyft: Changing How The Taxi Business Works

The taxi industry has changed in the last few years. Cab services like Uber and Lyft rule the U.S. taxi market and have made local taxi businesses have a run for their money, bringing many of them to the brink of bankruptcy.

How Much Have Things Changed?

A study on the impact of e-dispatched rides on the greater population of local Taxi drivers, released by New York Mayor's Office, states that e-services of Taxis like Uber and Lyft have contributed to the overall congestion. The study states them as  “substitutes to traditional taxi rides.”

All this has left the local Taxi companies desperately looking for alternatives. They are continuously reaching out to new technology and drivers to survive the stiff competition they're facing. Uber has spread like a wildfire and is, as of now, present in 77 countries and about 503 cities.

The Story of Uber

In just a short span of 4-5 years, Uber has risen from nothing to now a multi-billionaire company. The prompt and cheaper service they provide gives them an upper hand with the traditional taxi service and has as result completely changed the fundamentals of cab riding. Local drivers use a traditional approach when it comes to providing services, which we can say, is outdated nowadays. That's where Uber and Lyft win the game, by providing a pocket-friendly solution making use of technology for their business.

Why Is Uber Winning the Game?

For one, Uber is playing its game right. It knows what the customers need. Focusing on safety, reliability and a hassle free experience are just some of the things that Uber knows well. Uber knows how to attract more local drivers to their business. With a well-managed system to provide service which helps the drivers manage time better, Uber and Lyft are the hot favorites cab app drivers.

At the end of the day, an Uber driver often takes home more money than local drivers. Where full-time Uber drivers in California earn around $39k per annum, the local ones can only manage $36k. Local Taxi drivers also have to face many other burdens unlike Uber or Lyft drivers. They are taken as independent contractors and have to take care of all the other expenses like gas, license, and car insurance. These expenses that total to about $200 a week makes a significant portion of driver earnings. Uber drivers are sole contractors and have to pay for gas and license but Uber covers the car insurance and they are not to pay the car registration fee.

How Can Local Taxi Businesses Stand Out?

Some local Taxi drivers have argued how companies like Uber have a tendency to evade insurance coverage, background and safety checks and other taxi regulations. Ride-sharing apps take away most customers who would have otherwise used a local cab. Uber users are mostly young people and teenagers, perhaps as they are more tech savvy.

How do you Deal with the Uber Onslaught?

What also works is that services like Uber often have cheaper per mile rate and users don't require paying a tip to the driver, a common practice in the case of local drivers. Local taxi services need to work on raising their standard to bring them at par with the ones of Uber and Lyft – and it all starts with the right taxi booking software.

Here is a look at the other things that’s needed.

Ensuring Quality

A focus on the basics is what’s needed. Often, taxis used by the local drivers are poorly maintained. Ensure that all the vehicles that are being used are cleaned regularly, along with timely engine check-up and overhauling. Air-conditioned cars would be a plus during the summers.

Change the Pricing

To compete with companies like Uber, revamp your pricing. Although many big cities charge fare by the distance, it's a common practice in the other towns to charge fare according to the pre-set prices of travel from one location to another. Go in for the former model, where customers pay only for the distance traveled.

Improve the Customer Experience

Drivers also play an important part in uplifting the whole user experience during the ride, which, in turn, helps the business as a whole. Uber tests their drivers for courteousness and ensures that they maintain decorum.

This will help improve customer satisfaction and build brand loyalty.

If you’re going to compete with the likes of Uber, ensure that your basics are proper. You can also have guidelines set up for the drivers to follow with penalizations on breaches as needed. Don’t forget to try investing in a good Uber clone app. While everything matters, it is the app that can help you to significantly up the customer experience.