Exclusive reasons on why people prefer on-demand taxi services over traditional taxi services

4 mn read

The world has changed in a lot of ways compared to a decade. Of course, change is inevitable. But having a single invention change the lifestyle of many people is somewhat unimaginable. And the invention, as you have guessed, is- mobile phones or smartphones to be exact. Just like the name suggests, it has changed our’ work hard’ life to a ‘work smart’ life. We have so many facilities offered by it and the one thing never to be excluded is the on-demand services. 


Be it food, apparel, or even to hire a taxi, everything is possible with the touch of just a few buttons. Many industries are having their best time by getting massive exposure. One of them is a taxi booking business.

Before app-based taxi booking came into reality, there were only limited options like calling a driver for pick up or contacting a taxi booking agency. But with these mobile app solutions, riders are having a massive relief as they don’t have to hesitate to book multiple vehicles. They can book a cab from anywhere at any time.

There are many entrepreneurs there looking for the best opportunity, and you are one among them. Then, launch a ride-hailing app sooner to enter into the taxi industry. 


Not just in some countries, but the riders from across the world, prefer these apps. Now let’s look at their market share.


Market share of the on-demand taxi booking apps:


The on-demand ride-sharing apps were introduced to the world in 2011, and they gradually started to gain their shares in the market. They accounted for 50% of all the for-hire trips by 2017, and by 2019, the percentage increased by 74%. Some shreds of evidence show us that the on-demand services have increased the productivity of approximately 30-50% in comparison with the conventional taxi booking services. 


Why are on-demand taxi apps better than conventional taxi services?


So let’s look at what are the aspects that have made the riders choose these apps instead of the conventional services.


Broader area coverage: 

Conventional taxis are always confined to only specific areas. So, them reaching the scale effects is much likely. Whereas the on-demand services, by offering services to the larger size and they can drop in more vehicles for needs. By this, they have a fair ability in matching the supply and demands of users in the metropolitan areas and also letting drivers compete for the customers.


Fewer regulations:

When we consider the conventional services, they are usually regulated, meaning that their areas of services are defined and also that the vehicles are controlled by quotas, and the fares would be set. The framework of providing restrictions to supply, foods, and market areas led to users having only limited choices. It can be considered colossal incapability for having a competition.


Comfortable driver and rider matching:

The on-demand taxi services usually depend on the updated matching of the rider and driver quickly. This is possible because of the advancements of technology and applying them for real-time supplies and matching demands using geo-locations.

The matching depends upon several factors that are further optimized and updated. For example, the customer closer to a vehicle would reach immediately than a customer farther away, reducing the travel distance. Another option depends on the willingness of riders to share them with other riders.


Compared to this, the conventional services, only assign the drivers on an impromptu basis like street-hailing, which is though efficient, would not work for today’s increasing complexity in demand patterns and the expectations of the passengers to have a ride within some minutes.


Flexibility in fare and supply: 

The ability to quickly adapt to real-time changes is what makes on-demand taxi services more efficient. Due to the wide range of vehicles and their ability to increase fares according to the situation using yield management strategies like surge pricing, they offer users a ‘give or take’ option.


Example: Users will be notified regarding the increase of the fare, from which users can either choose to travel at the higher fare, or choose to wait until the cost of the ride lessens. As seen from the supply perspective, it is understandable that higher demands mean higher supplies, and they need additional drivers to meet the demands. 


But conventional taxi services, because of their regulations, offer just a limited number of vehicles and drivers as they often work in shifts, won’t be able to adjust to the demands.


Benefits of the on-demand taxi booking apps:


Increase in efficiency of drivers:

The driving way of drivers varies from person to person. Therefore, it is essential to manage the productivity and efficiency of the drivers. Unlike on-demand taxi apps, the conventional taxi services won’t provide the riders with an option to leave feedback. There would not be any way to know about the bad experience and who is at fault. But now with these apps, from the time of booking to until the trip is over, everything can be checked.


The satisfaction of the customers:

Using these car booking apps, the booking experience for the riders can be smoother, quick, and intuitive than the traditional taxi services, where they have to call and book a service. These apps are now offering the best user experience, and people choose to get their rides at their doorstep, unlike the period before.


Safety of the riders:

Using the real-time navigation feature in the app, the riders would not have to worry about their safety, as they can share the status of the ride, right from the pick-up to until they reach their destination with their friends or families, who can, in turn, keep track of the same.


Less fare:

Due to the instant updates of the ride or the driver, which the riders can track through the mobile app, they will have the ease to connect and follow the driver. Apart from just improving the driver’s performance, this will reduce the estimated time of arrival, thereby decreasing the overhead cost for the ride. 


Also, apart from these, the ride-sharing services enable a better and flexible allocation of the workforce. Because the drivers would get to decide the time they are available and can do this as a freelancing opportunity.




The success of these apps has led to the development of similar such apps, and if you are an organization looking for the development of an on-demand taxi booking app, then the right choice is the Uber Clone app for you. 

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