Taxi Apps: The Need For a Middle Ground

Iconic LAX, no cab in sight

Iconic LAX, no cab in sight

As a suburbanite, I don’t often find myself in need of a cab. This week, however, I found myself on a day trip to LA that required two rides, one from the airport to town and one from town to the airport. I quickly discovered what the founders of Uber, Lyft and the rest of the gang have known for a long time: the taxi business is rife with inefficiencies.

This wasn’t as obvious at the airport, of course. Taxis were lined up to collect waiting passengers. With an efficient dispatcher pairing riders and cabs, it was easy to find a cab and leave the airport.

On the way back, though, we found ourselves standing at an intersection trying to hail a cab. After five minutes of no luck and mounting pressure (we had to be back at the airport at a certain time) we looked for a busier intersection. We found one and luckily hailed a cab in a few minutes.

During our waiting time I tried to download and sign up for Uber, but as luck had it, we found a taxi before I finished registration.

The ride back gave me time to think. Uber et al went the whole nine yards. They saw a problem and fixed it from the ground up: more efficient pairing of drivers and riders, more logical pricing, less inefficient driving around looking for fares by drivers, and users more efficiently getting a ride. The drawbacks of this approach are that each company has to find drivers, cars and deal with the headaches of insurance. It’s doable, but it takes work and makes it harder to scale.

What if instead of redefining the industry, we just made the existing one more efficient?

First, use existing drivers, existing taxis, even the existing fare structure, as dictated by the local regulators.

But: optimize the entire “pairing up” process with apps for both drivers and riders. Cabs can register and notify the system when they are free and where they are. Riders can use the app to hail a cab and the system will pair the two. This stops needless driving around by drivers cruising for fares (and, hey, it’s better for the environment and for local traffic!) and puts an end to curbside arm-flailing. Win-win, right?

 

Update: Of course, once I posted the above, I found the following Techcrunch article about a German start-up that is trying to do just that: Talixo is “taking a platform approach, and is pulling in both traditional taxis and private drivers to service ride demand. Its online booking engine also supports pre-booking of cabs, not just on-demand hailing. And it offers free fleet management software for providers, so they can manage their capacity and optimize routes.”

I love the added bonus of route optimization technology. Analyzing rider behavior and demand will surely provide a great benefit for providers.

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