One cab company’s response to Uber: too little, perhaps a bit late

When Uber, Lyft and the other ride-sharing companies launched a few years ago, It was pretty clear to see how their model would completely disrupt (I apologize, the word is overused, but it fits here) the taxi industry. Riders’ frustrations at the inefficiencies of the system (wait at corner, hope a taxi passes by, or call a dispatch center, hope they understand where you are and really send a cab as promised) coupled with a regulatory-imposed scarcity drove riders everywhere to try the new services. And they liked the experience. So much that taxi medallion costs in New York, a definitive desirability indicator, dropped in value by around 23% since their all-time high in 2013. Uber launched in New York in May 2011 so it’s safe to say that adoption and widespread use of the new services did not happen overnight.

In this long adoption period, it seems like the taxi industry spent its resources fighting the ride-sharing apps on the regulatory front and it seems to still focus efforts there (most recently in France.) Yet a few cab companies have decided to fight back by improving their product and service. MetroCab in Boston is one that is trying to improve both by launching an app. I downloaded it while in Boston and while I think this is a good start, there’s still room for improvement.

MetroCab of Boston's Taxi booking screen

Book a taxi in the MetroCab app. Simple and focused functionality.

First, app permissions include location and identity. Not asking to access “unnecessary” information such as contacts or calendar earns them a plus in my book. Second, the app, in a good way, is very focused on one important functionality: booking a cab. Users have the ability to save commonly used locations and routes but the app isn’t great at autocompleting locations that aren’t address based, such as hotels and tourist attractions, focusing instead on street addresses. I suppose that for users that are local residents and don’t have much variance in their routes, this is sufficient but to an outsider it seems lacking. Citymapper, an app used by tourists and locals alike, does a great job at finding locations by name, not only by address. But this is a minor complaint. Another disadvantage is that users need to book a cab without knowing in advance how long it will take the cab to arrive. While this is standard cab operating procedure, ride-sharing companies provide this service.

The good is that there is an app! Waiting on a corner, trying to hail a cab is a thing of the past. The big disadvantage of the MetroCab app is more on the strategic level than the product one: it is only for MetroCab taxis. While MetroCab bills itself as the “largest taxi-cab fleet in greater Boston” it is only one of seven different companies in Boston. Riders tend to be brand-agnostic when riding in a cab, so not including all cab companies in the app could hinder cab availability and delay pickup times. That, in turn, could cost them riders. What it means is that strategically, MetroCab places competition between taxi companies above competing with ride-sharing apps, and that could cost them dearly.

Finally, one thing that the MetroCab thankfully doesn’t have is surge pricing. Uber takes pride in its surge pricing strategy, saying that it brings out more drivers when demand for them is high. This article says that instead of getting more drivers on the road, surge pricing “re-distributes drivers already on the road.” Either way, cab companies are, in theory, ignorant of demand and pricing stays constant. Regulation in this case provides riders an advantage. Regulation also theoretically does a better job at screening drivers and providing for insurance, two challenges facing all ride-sharing companies. Conversely, if MetroCab and other cab companies improve their product, the benefits of regulation might give them the advantage over ride-sharing in some markets. Wouldn’t that be interesting?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s