The powerful combination of the arrival of ride-hailing services like Uber and Lyft was swiftly followed by a global pandemic of unprecedented scale. (Not that we need to remind you.) The impact on the taxi industry was earth-shattering to say the least. Now that most of the world is slowly and carefully adjusting to the ‘new normal’, this leaves many of us to wonder what it means for taxis. It will be a while before global travel is back anywhere near 2019 levels, which obviously has a ripple effect that will continue to impact for-hire ground transportation. Regardless, as we forge ahead in a post-Covid world, there may be unique opportunities for taxi companies to expand their offerings and reposition their services.
Here are some big questions that taxi service operators are grappling with:
- How can the taxi industry give passengers the experience they expect on an ongoing basis, while making them feel safe?
- Are passengers experiencing dissatisfaction with ride-hailing services? If so, how can taxi companies attract these passengers?
- What opportunities might exist for taxis in the post-Covid world?
The impact Covid continues to have on daily life is highly variable around the world and is also incredibly dynamic. As vaccination rates increase and governments reduce restrictions, people are getting back into doing the things they enjoyed doing in the pre-Covid era. (That simpler time often known as ‘the before times’!) In this article, we will explore the three big questions that the taxi industry is facing in the context of how things are unfolding in North America in the later part of 2021.
Question 1: How can the taxi industry give passengers the experience they expect on an ongoing basis while keeping them safe from infectious disease?
This question has two components: user experience and safety.
If we look at user experience, many passengers have gotten used to the simplicity of hailing a ride from companies like Uber and Lyft. This means simply opening an app, indicating where they’re going, connecting with a driver, and automatically paying for the trip via the app. The reality is many passengers aren’t interested in making a phone call or speaking to a human in order to request a ride. Taxi companies who are still heavily reliant on customers calling their phone number may see making this change as a massive leap, but this is honestly what customers have grown to expect. Doing research on what taxi management systems can offer you this functionality will help determine the best tech setup for your business. In making this upgrade, you could reasonably see up to 90% of your rides being dispatched without any manual interaction. You would also reap the additional benefits of eliminating driver cheats and increasing passenger happiness. Win/win!
In the context of safety, taxi operators should plan to continue with Covid-19 cleaning, sanitizing and ventilation protocols as the way forward for the industry. The reality is being in close quarters with a stranger may be uncomfortable for large portions of the general population, potentially for a long time to come. Continuing to wear masks as an ongoing standard can help with giving passengers the confidence they need in your business. Sanitizing and ventilation will support mask wearing to help reduce the risk of contagion spread and demonstrate your commitment to passenger safety.
Question 2: Are passengers experiencing dissatisfaction with ride-hailing services? If so, how can taxi companies take advantage?
When the pandemic hit and demand for rides plummeted, many Uber and Lyft drivers walked away, and some for good. Even prior to the pandemic, there had been widespread accounts that the pay and treatment of ride-hailing drivers had deteriorated over time. Now that demand has once again increased because the world is reopening, passengers attempting to book an Uber or Lyft are experiencing longer wait times and higher fares. The driver base simply hasn’t returned to 2019 levels, resulting in significant passenger frustration. Is it possible the honeymoon period with ride-hailing is over? If so, what does this mean for taxis?
Taxi companies, often well-established in communities of all sizes, have an opportunity to expand into the vacuum created by the dissatisfaction with ride-hailing services. If ride-hailing is no longer cheaper or faster (as it was often perceived to be), then taxis could reasonably step right to the forefront of on-demand ground transportation once again. The key, as outlined in question #1 above, is to offer a similar user experience as what people have become accustomed to with Uber and Lyft. This means investing in technology that allows your business to offer an app-based or digital ride request & payment experience. Promoting your passenger app will be a key component of making this shift, so having a plan in place to make sure your target audience knows there’s an app will be key.
Question #3: What opportunities might exist for taxis in the post-Covid world?
Taxi companies navigating the post-Covid world might consider expanding their service offering to include grocery, meal or medical supply deliveries in addition to non-emergency medical transportation.
Non-emergency medical transportation (NEMT) could be a lucrative option to explore. Depending on your municipality, health authority or state government, there may be a process to win contracts to provide this essential service. Being a NEMT provider could present another revenue stream for your business and allow you to increase ridership by connecting with customers who may not otherwise use your service. This could even expand your customer base, finding those who may not usually consider a taxi but could do so in the future based on their positive NEMT experience. Additionally, medically vulnerable passengers may think twice before using public transportation in the future, which could present another opportunity for taxis.
Taxi companies may also consider industry opportunities such as partnerships with entertainment companies, restaurant chains or hotels. The post-Covid landscape may also present small business networking opportunities where taxi companies could reasonably make connections with other business owners and explore the potential for partnership. This could be as simple as having a referral program in place or offering a small discount to passengers if they’re requesting a ride from a partner’s business. Having a good passenger-focused technology in place would make this easier as it supports the passenger experience factor described in question #1 above.
While the multidimensional impact of the rise of ride-hailing and the global pandemic has deeply impacted the taxi industry, there are opportunities to evolve the business and move forward in a new direction. Understanding passenger expectations, seeking out non-traditional business opportunities and being open to partnerships may all be profitable avenues to explore in the post-Covid landscape. The key, as always, will be forward momentum.