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Analysis and Insight from Savvycom Team.

Mobility-as-a-Service (MaaS) is a type of service that enables users to plan, book, and pay for multiple types of mobility services through a joint digital channel. The concept describes a shift away from personally-owned modes of transportation and towards mobility provided as a service. Nowadays, when have taxi app development have begun to surpass traditional taxi services? People have started to shift from personally-owned transportation modes toward mobility solutions as a service (MaaS).

That is why online cab booking software is in high demand nowadays. Statista predicts a 2.5 percent increase in taxi app users and a 60 percent increase in ride-hailing segment revenue in 2021. This article will show you how proper taxi app development is done and give you a brief idea of how much it costs to develop a taxi app.

1. Taxi App Development Best Practices

Given the fierce competition in the ride-hailing industry, it’s understandable to look up to its influential leaders while considering how to build a taxi app. Since Uber, Lyft, and Grab are at the top of the taxi industry, they are worth investigating.

1.1. Uber

UberCab, which Garrett Camp established in 2009, is the forerunner of this ride-hailing service. Uber is now available in 630 cities and is still growing. The acquisition of related services is one of the ways this growth is taking place. Uber paid $3.1 billion to buy Careem, a Middle Eastern taxi booking app, in 2019.

There are many categories in the service to meet the needs of different users and price ranges. Uber Pool, Uber X, Uber Go, Uber Black, and others are just a few of the options. Uber is also looking for new markets to join. The organization has recently begun experimenting with parcel and food distribution like “Uber Fresh” and “Uber Eats”

Uber has evolved, and the costs associated with its development are difficult to quantify. According to NextWeb, based on Uber’s early funding rounds, the cost of an Uber app, which includes a taxi driver app and a rider app, would be between $1M and $1.5M.

The creation of the Uber taxi app cost a lot of money.The initial investments totaled several million dollars from nine investors. Consider this: Uber Technologies has raised more than $22 billion in funding to create its taxi booking app in the last nine years.

1.2. Lyft

The Lyft app was released in 2012, shortly after Uber. It started as Zimride, a long-distance ridesharing service that connects drivers and passengers via Facebook.

With a presence in more than 200 cities around the United States, the Lyft taxi booking service is now considered a direct Uber competitor. Lyft’s distinguishing feature is its ranking system, which ensures that only the best drivers are retained. In addition, the Lyft taxi app has $1 million in liability insurance. Apart from that, Lyft is thought to be less expensive than Uber; you should expect to pay about $12 versus $16 for Uber.

1.3. Curb

Curb is another taxi booking service based in the United States, with a pool of over 50,000 taxis and a few hired cars spread across 65 US cities. During the ride-booking process, passengers have three options: “ride now,” “ride later,” and “pair and pay.”

The most significant difference between the Uber app and the Curb app is that the Curb app does not have the aggressive surge pricing that Uber has been chastised for. Surge pricing refers to adjusting the price in response to demand at a particular moment. As a result, the Curb ride fare is lower, and the taxi app provides a more environmentally friendly service. In addition to the trip fee, passengers are paid a $1.95 commission.

1.4. Grab

Grab is a popular taxi booking app in Southeast Asia, with Singapore, the Philippines, Malaysia, Indonesia, Thailand, and Vietnam. This taxi app offers a variety of travel choices and payment options (a card, cash, Grab credits). GrabTaxi, GrabShare, GrabHitch, GrabBike, or GrabFamily are the mobility options available to passengers. Additionally, Grab also provided nummerous services for food and item deliveries which is extremely popular among restaurants and retail sellers.

1.5. Gett

This taxi booking service is available in over 100 cities throughout the United States and Europe. The ability to book your trip two weeks in advance and the availability of 24/7 passenger service are two of the Gett app’s competitive advantages. The Gett app does not have surge pricing, and each trip only costs a 10% commission fee. The Volkswagen Group is said to have invested $300 million in the service’s launch in Europe.

The majority of the taxi app solutions listed above work in a similar way. The following is how it works:
1. The passenger requests a ride by providing the required trip details (e.g. pick-up and drop-off locations)
2. The trip fare is measured ahead of time using data from the system’s back end.
3. The passenger checks the trip’s specifics and agrees to the fare.
4. A nearby driver is paired with the passenger.
5. The driver is notified about the trip.
6. The driver examines the trip specifics and decides whether to accept or deny them.
7. The passenger is greeted by the driver, who then transports them to their destination.
8. The service is paid for automatically using a linked credit card or cash.
9. The device prompts the driver and passenger to rate each other after the trip is done.

2. Features & Monetization for Taxi App Development

For starters, in taxi app growth, creating a native app is the recommended approach. This enables developing a custom app for each operating system, ensuring improved performance, speed, security, and access to built-in smartphone features such as geolocation and maps. A traditional taxi app solution includes three distinct but interconnected components: a driver app, a passenger app, and an admin panel for business operations management.

2.1. Basic & Advanced Features for a successful Taxi App

We have compiled a detailed table of both basic and advanced features that you should consider during your taxi app development.

Passenger App Features Driver App Features Admin Panel Functionality
Registration Registration Secure login
Profile Driver profile and status Locations and fare management
Taxi booking Trip alerts and information Driver and passenger management
Fare calculation Receive and track earnings Booking management
Driver tracking Navigation and route optimization Vehicle management
Payment Driver delivery reports Review driver’s orders and payoffs
Push notifications Push notifications Check ratings and reviews
Messaging Messaging Notification management
Driver rating and review Passenger rating and review System content management and FAQ
Travel history Booking cancelation Driver and user support
Customer support (SOS button) Driver destinations Integration with Google Analytics
Passenger App Features (Advanced) Driver App Features (Advanced) Admin Panel Functionality (Advanced)
Pickup location Quest earnings Manage dispatchers
Ride cancellation Waiting time Dispatcher panel
Split payment Heat maps Manage refunds
Interactive map Forward dispatch Promotion and discount management
Future ride SMS alert settings for specific trips
Book for someone else Future ride settings
Favorite locations Country and currency settings
Gamification, discounts, referral rewards Heat map
Voice recognition Surge pricing
Waiting list Flat pricing
Hidden passenger phone number

2.2. Monetization of Taxi App

You want to monetize your app while you’re working on it. There are various ways to earn money from mobile apps, but they differ depending on the type of app and its features. Let’s take a look at the monetization possibilities for ride-hailing applications.

a/ Commission from the trips

Profits from the trips. This is a self-evident option. It’s all about the taxi industry as a whole rather than the app’s monetization. It means that the business owners receive a certain percentage of the driver’s earnings.

The passengers pay a little more than they would without the commission percentage, but the drivers’ compensation can be structured differently. A driver may be delivered the full fare for a ride and then return a portion of the money to the company, or he may be paid the net income all at once.

As an example, suppose there’s a driver balance option in an app. In the first example, if a customer pays $10 for a drive, the entire $10 goes to his bank, and at the end of a set time, he returns a certain percentage of it, leaving $9 on balance. When only $9 is on balance at first, the second option is available.

b/ Driver’s fees for using the app

Payments may be a specific percentage or a fixed amount, depending on the application. Depending on the company’s policies, a driver normally pays it once a week or once a month.

c/ Cancellation fees

This revenue is typically generated by the passenger, but some apps will choose to provide this feature for the driver. If a passenger or a driver refuses to take or offer a ride, money should be deducted from their account in all cases.

d/ Advertising

It’s one of the most popular ways to make money off tech. In the case of mobile applications, it is much simpler to incorporate. A product owner places ads in an app and charges a cost-per-click or cost-per-impression commission. However, you must exercise caution when using this technique. Consider where in-app advertisements are placed, how many there are, and how relevant they are to the app’s content.

e/ Subscription for additional services

You will monetize premium deals if you can think about them. Make it a revenue source if you can do something that your rivals can’t.

Of course, not all distinguishing features should be charged, so people who choose the standard subscription over the premium subscription would find the taxi app identical. You might also think of using a freemium model. It allows users to try out some of the additional features before deciding whether or not to pay for them.

When it comes to premium features for your cab-hailing app, use your imagination and try to imagine what passengers may want and be willing to pay for. Because of the constant furry, your audience might find features that save them valuable time—for instance, a subscription for some of the trips they take frequently. You could also have secret phone numbers, super-fast taxi delivery, and other services.

3. Taxi App Development Process

Before we get into the cost of taxi app growth, it’s essential to understand how the app software is made. The procedure is divided into a few global stages, which are as follows:

  1. Discovery & Market Research phase
  2. Development – includes testing and deployment processes
  3. Maintenance and Support
  4. Marketing and Promotion (Digital Marketing & SEO Services)

3.1. Discovery Phase

Though it may not seem so, the discovery stage is just as critical as the others. Some people believe it is not worth investing money in, but it ultimately saves many lives.

During the discovery process, a customer and a service provider collaborate to create a shared understanding of a potential app and specific guidelines. Business analysts, a project manager, a product owner, and designers are all actively working at this stage.

During the discovery stage, the designers’ goal is to imagine what other team members explain verbally, and during production, they design the entire cab booking app. They create graphs, maps, wireframes, and mockups as needed.

3.2. Development Phase

The software goes through the same stages regardless of the SDLC model, but some methodologies are more versatile than others. Consider the term “agile.” It has proven to be a reliable and trustworthy approach. The customer relationship is its primary emphasis. Agile provides for deviations from the original plan to meet the needs of the client. Unlike the Waterfall model, for example, Agile allows specialists to improve the app’s layout in the middle of production.

During the development process, a taxi app development company sends out a trial version of the app to various platforms to see how it works. As a client, you will check it out and let the development team know if anything is to your liking. If that’s the case, they’ll publish the final version on the AppStore, and support, maintenance, and updates will begin.

3.3. Support, Maintenance, and Updates

This stage necessitates the least amount of customer participation. During the assistance, repair, and upgrade phases, the service provider’s team is in charge of everything. It begins soon after the product is launched and continues for years. Our experts will update a taxi app on a regular basis, fixing glitches when they arise and improving it.

4. Taxi App Development Cost & Timeline

The production team is the first and most significant price shaping element. The experts who will make up your team will be determined by the project’s details. Developer wages are not the only factor that goes into determining the final price, but they are a significant one. The following is a list of the basic team members:

  • Business analyst
  • Project manager
  • UX/UI designers
  • Back and frontend developers
  • QA specialists

During the pre-development stage, the project’s timetable is estimated. When specialists have gathered all of the criteria, they will call the anticipated period. It is dependent on the app’s features. We can only make an educated guess at the time frame because we don’t know anything.

A driver’s app would most likely take three months to create, two months for a passenger app, and one month for the dispatch panel. With these figures, you can estimate how much money would be spent on wages. Learn more about Savvycom IT Outsourcing Costs!

Here at Savvycom, we’ll offer the final estimated numbers to those who don’t want to do some evaluating. Depending on whether you take a hybrid or a native approach, the price can vary. Let’s look at the raw numbers now that we’ve discussed the benefits and drawbacks.

In case of native development:

  • An MVP with basic functionality would cost about $40k per platform
  • More complex app with advanced functionality – $100k-$150k per platform

In case of hybrid development:

  • An MVP with basic functionality – $45k
  • Taxi app with advanced functionality – $125k-$175k

5. Conclusion

Don’t forget to think about the taxi-hailing service’s potential. As previously stated, the world is embracing cheaper and more convenient mobility and transportation solutions. And with the future advancement in autonomous vehicles, eliminating the need for a driver, reducing running costs, and eliminating parking space issues. Tesla Inc. and General Motors are now working on self-driving cars as part of a collaboration with Lyft.

To summarize, taxi app development necessitates a significant financial and time commitment. It’s critical to find competent and dependable taxi app developers. A software development team that is supportive and technologically forward-thinking should be the first pick.

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Savvycom is right where you need. Contact us now for further consultation:

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