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How taxi industry can fight back on ride sharing apps

Taxi industry – or yellow-cab industry as it’s more affectionately called in the US – has been challenged by industry insurgents like ride sharing giant Uber. And it’s been a rough ride. According to New York city’s data the total amount of trips fell 8.8% year-on-year in 2015 as ride sharing companies ramped up their services in the city.

Last fall there was a news article about taxis finally trying to beat Uber at its own game. New apps, Arro and Way2Ride, acted as prong in this counter with similar functionalities to Uber: consumers can use apps to hail the taxi online. Simple and convenient?  Maybe. Is that the silver bullet the industry is looking for? You’ll be the judge of that. But few questions while you’re making up your mind:

How will you get your app to your customers’ phones? How do make sure your app is the one that they’ll use?

After all, their phones may look like mine below:

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Image: My collection of convenience.

And then third, data from Les Taxis Bleus, leading taxi company in France which launched their mobile apps already in 2010.  Six years after, Les Taxis Bleus says 10% of orders come from mobile applications and the growth seems to stagnate.

Sounds like a click when you’re expecting a bang.

“80% of customers want a taxi right away”

In taxi-ordering business orders matter

According to Les Taxi Bleus 80% of people want a simple thing: they want their taxi right away. Yann Ricordel, CEO of Les Taxis Bleus says: “We wanted to treat these impulse purchases with the distribution method as simple as possible. The challenge was to hide complexity and to provide a seamless experience without any hick-ups.”

Their solution was a connected button that they offered to hotels, restaurants and shops to order a taxi for their clients.

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Image: courtesy of Les Taxis Bleus

Ricordel continues: “We offer the button free for businesses. Our business model is to provide a volume of additional fairs to our network affiliated drivers, who pay us a fee. The new device is less expensive than developing a mobile app and make it known. Moreover, it is an engine of partnerships, as places of passage can contact us to install the buttons. Each new installation of a button, our sales teams travel to explain the technology and service. A perfect excuse to build relationships and build brand awareness.”

And the result? “Six months after launch, we deployed fifty establishments per month. We’ve measured a business growth of 25% with the button user establishments. It is a real commercial success, with exponential growth. This was not the case with our mobile apps launched in 2010. Access is faster, simpler and more obvious than with mobile applications,” Ricordel explains.

Oui, but that’s happening in France, you may say.

For the sake of comparison, let’s take couple of examples from the US.

Regency Cab in the US has seen an increase of 100% in fares in locations where their bttn’s have been deployed.

San Diego Yellow Cab: “We’ve placed our buttons in the existing businesses that always used our service. It’s much more convenient for the client to press a button versus making a telephone call to order a cab. We’re receiving an average of 500 trips per from the newly deployed buttons.”

So is this the silver bullet you and everybody else in the taxi industry is looking for? Quoting Ben Horowitz, co-founder of the renown venture firm A16Z:  “There is no silver bullet. There are only lots of lead bullets.”

Fire them wisely.