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Taxi Aggregation Industry in India Industry trends, challenges and how to overcome them

By Srikanth Lingidi

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A smartphone and a good network connection is almost all that a consumer needs today to fulfil an entire spectrum of needs.Tech-savvy Indians have an app for just about everything; from booking movie tickets to planning holidays, ordering groceries and of course, hailing a cab. The on-demand taxi industry has truly changed the way a large section of people in the country commute on a regular basis. Days of waiting in the heat for an auto or shelling out exorbitant prices for the services of the neighborhood taxi stand is truly passé thanks to the advent of cab aggregators.

However, the industry itself is full of challenges for players in this realm. As many cab aggregators have emerged in the last 5-6 years, the space is bursting at the seams with competition. Every aggregator is trying to cement its position in the market by differentiating itself with technology. However, only a few have managed to crack the secret of what works with the customers.

Let's take a look at the challenges in this space and what it truly takes to be a leader…

What's the challenge?

App-only: Many cab aggregators are available in an app-only mode. This means users have no choice but to download the app to book a cab. While smartphone users are aplenty, not all are comfortable to bombard their phones with multiple apps as they eat up memory in the phone.Confining to just the app way of booking will make people look out for more convenient options.

Cashless payments: Many cab aggregators are aggressively tying up with digital wallet companies to push cashless payments. While customers stand to enjoy benefits like discounts and cashback offers, many are still not keen to go the cashless way. They fear online frauds and want to stay away from uploading any of their personal details on the phone. A lot needs to be done to deter cash payments and increase awareness of the benefits of cashless payments.

Security concerns: For the love of driving or to eke a living, many drivers are depending on taxi-hailing platforms to earn big bucks. While this has increased job opportunities, safety and security concerns have also risen concomitantly. Many of the private taxi aggregators are operating without any permit or licence. Although most of the vehicles are GPS-enabled, it operates only till the driver keeps the mobile switched on. The moment he switches off the phone, nobody can trace him. Also, whether the panic button and cab tracking features in cabs will prove sufficient in case an untoward incident were to happen,is a question yet to be answered.

Pre-booking facility: Another major drawback is the lack of advance booking. You don't want to waste your time tracking cabs when you have to rush to the airport or pay four times the regular amount during peak hours. The surge pricing is based on the demand and supply of the cabs. These app-based cab aggregators are yet to come up with a feature, where pre-booking facility can be availed.

The reasons behind big players / aggregators are facing so many troubles;

Surge charges, Lack of security assured service, Operating without proper licence, do not have enough information about their drivers, old and polluted vehicles, untrained taxi drivers and there are many other reasons.

The way forward

While private cab aggregators suddenly became a hit among customers, none of the players have been able to capture a loyal client base so far.Taxi drivers are often seen turning passengers down or refusing to go in a certain direction. Gradually, it seems to have become a practice for them where their own preferences appear to take priority over the customers' convenience.

Similarly, many players are making their services easily available on both phone and app. They are offering pre-payment options through all credit and debit cards while also allowing cash payments. Conducting routine spot checks for all the cabs in the network has also become de rigeur amongst the most popular and reliable aggregators.

It is also fast becoming a norm to employ well-groomed, educated chauffeurs, who are fluent in both English and Hindi. Expanding the bouquet of offerings, many cab aggregators are not limiting themselves to on-demand services alone and are also providing full day car rentals, half-day rentals and special packages for 16-hour, 8-hour and 4-hour packages.

While cab aggregators are chasing targets and drivers are running behind incentives, it is the commuter who is at the receiving end. The cab industry is yet to evolve and become truly customer-friendly and only then will the eco-system prosper as a whole. However, by tying up with existing cab networks, which customers trust, by educating drivers about the importance of consumer convenience, by ensuring superlative safety measures, not only can cab aggregators successfully build a strong and loyal passenger network, they can also raise the service quality benchmark for the industry at large.

Srikanth Lingidi

Founder and CEO ApnaCabs

Srikanth Lingidi is a Founder and CEO of ApnaCabs, Govt authorized taxi aggregator
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