The Rising Tide: How Taxis Can Respond as Millennials Abandon Car Ownership

Written by DDS Wireless

July 6, 2018

For previous generations, owning a car was a right of passage. Young people got their licenses and acquired their first cars just as they prepared to leave school and enter the adult world. In particular, vehicle ownership in towns where the only alternative was an underdeveloped transit system was a key to freedom.

Today, that right of passage is changing. Millennials—the generation born between the early eighties and late nineties—are starting to move away from car ownership. Not only are they encouraged to ditch car ownership by unprecedented access to technology and innovative transportation solutions, but they are also fearful of the financial responsibilities that come with buying and maintaining a car. Millennials are still responsible for a large portion of vehicle sales. In the U.S., for example, they are responsible for 30% of new vehicle sales, but they are also willing to embrace alternative transport solutions. From 1983 to 2014 the percentage of 20-24 year olds who held a driver’s license dropped from 92% to 77%.

Today’s customers hail rides using apps on their phone, book vehicles for personal trips via car shares like car2go and monitor bus movements in real time. Can taxi companies also take advantage of millenials moving away from traditional car ownership, and in the face of mounting rideshare competition, what can taxis do to remain relevant?

Replacing the Personal Vehicle: How Taxi Companies Can Attract Millenials


Research shows that a lot of millennials are working two jobs or more. Around 50% of millennials in the U.S. have more than one job. In the United Kingdom, it’s about 20%. So, it’s no wonder that they crave time-saving conveniences. Whether it’s ordering a coffee or requesting a ride, those in the 25 to 34 age range spend close to three hours per day using mobile apps to complete tasks and free up time. This is one of the most important takeaways for taxi companies: booking a taxi needs to be a quick and streamlined process through a highly customized and distinctive app. The more taxi companies can provide convenient alternatives to dial-in bookings or the antiquated street hail, the better positioned they will be to attract younger users. They similarly need to find ways to integrate seamlessly with other forms of transit—be it ridesharing or bus systems. After all, millennials don’t want to plan a journey piecemeal, but rather as one straightforward route from point A to point B.


The average taxi company doesn’t offer much choice when it comes to the vehicle and driver responding to a particular request. You have no choice but to accept the driver and vehicle that show up at your door. This lack of choice is a turnoff for millennials, who are used to being inundated with options. Car sharing company car2go, which initially offered only smart cars, has since unveiled a high-end Mercedes-Benz option for those willing to pay a slightly higher rate. The same can be said of Uber, which offers a range of options from UberX (four-passenger sedans) to UberBLACK (a luxury sedan service), with a further cost-saving opportunity to book an UberPOOL and share your ride with others. Offering a greater choice to customers is essential for taxi companies aiming to remain relevant to millennials. A sophisticated fleet management system that enables a customer to track a vehicle’s movements, connects the passenger and the driver, and allows for different forms of payment is also crucial.


Millennials depend on reviews and ratings when making a purchase. Whether it’s buying the latest piece of tech, dining out or booking a ride, millennials have embraced reviews when it comes to making just about any purchasing decision. Companies like Uber have taken advantage of this trend by allowing customers to rate their drivers. By the same token, drivers may also rate passengers, creating a transparent system that encourages good behaviour and service. Taxi companies could do more to connect drivers and passengers. The ability to read reviews prior to booking a ride, or simply to know who it is that will be picking them up, would go a long way to encouraging car-free millennials to choose a taxi.


The final lesson is perhaps the most difficult to leverage: cost is a deciding factor in decision-making. Although this isn’t unique to the millennial generation, this younger demographic is less likely than others to have established savings. The reasons are myriad, but a combination of increased debt from student loans and shrinking salaries means that millennials are always on the hunt for the best deal. This is a major problem for the regulated taxi industry, which often finds itself competing against unregulated and unlicensed ridesharing businesses that can offer a cheaper service. Ridesharing is part of a larger debate about regulation in the transportation space: the EU recently ruled that Uber should be treated like a transportation service and face the same regulations as taxi companies. Taxi companies need to continue to push for a level playing field when it comes to regulating all transport providers, not just their direct competitors. Only once rides are priced more competitively will millennials be more inclined to make use of taxis.

Getting Millennials On Board

Despite the lobbying required to bring ridesharing regulations up to par with existing taxi standards, there is much that the taxi industry can do today to attract millennials to their services. Getting millennials on board is essential to the continued longevity of the taxi industry. Progressive companies will start working now to ensure they remain relevant in the future.

Reach out to update your fleet’s mobile app, or book a demo with us today.

Image: Shutterstock / Kaspars Grinvalds

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