TAXI 2.0: Turnkey solution for taxi and limoOpportunity execution project
Executive summaryNew technology quickly takes over taxi and limotransportation industry. Startups like Uber and Hailo arechallenging the incumbent brick-and-mortar taxicompanies on new ways of running this century oldbusiness. For smaller taxi companies it is becomingincreasingly more complicated to survive.Taxi 2.0 provides a range of tools that help cab and limocompany owners compete in this new world, cut theiroperational costs, and attract and retain more customersby providing a superior experience for the passengers.
Fundamental problemTaxi today is a commodity, price is usually the same, sopassengers will use a service which is the most convenient forthem. New technologies opened new ways of ordering a cab ora limo, using mobile devices, SMS, online, social networks. Endcustomers desire a more predictable service, linkage withairmiles programs, ability to choose a car (luxury/regular, acceptcredit card, etc).If taxi company owners want to survive in this new world, theymust adopt the new technology. Taxi 2.0 helps them getthere, and a very low cost allows even smallest operators tohave a competitive presence in the local markets.
Product overviewTaxi 2.0 consists of 3 products, which could be used together orseparately.1. Web-based administrator console. It includes all the necessary toolsto effectively operate any taxi or limo business:• Real-time GPS-based driver tracking• Comprehensive pricing engine (zone—to-zone, distance-based)• Customer management and order entry• Invoicing, reporting, and notifications management (both driver and passenger)2. iPhone and Android application for drivers• Receive and accept new orders in real-time, without involving a dispatcher• Control the order execution, track waiting time• Receive detailed information about the customer and the trip• Communicate the exact GPS location of the driver back to the server3. Web, Mobile Web, iPhone, Android, and Blackberry apps for passengers• Order a cab in real-time without calling anybody, on-demand or future dated• Track the order status, receive notifications• Pay with a credit card• Widgets for hotels and restaurants that taxi company is partnered with
TeamOur core team is quite small, and as you can tell it is a familyoperated business. We have, however, 3 other partners, eachfocused on its own region: USA, UK, and Italy. They act as resellersand more importantly as priceless industry advisors/mentors. Denis Ryzhikov Worked on senior delivery management positions in international software vendor companies, mostly in telecommunications industry. Denis also has a strong technical background and acts as solution architect for the product. Having to travel a lot and the desire to improve his airport commute has incepted the whole idea. Olga Ryzhikova Olga has been running a software outsourcing company and her good relationship with offshore development centers in Eastern Europe helps us find and manage the right talent at the right price.
Business model Marketing Strategy Since we are still in a beta mode, we’re not advertising ourselves widely, and first turning our existing handful of customers into happy success stories that we can further build on. This is how we got these handful, in the order of effectiveness (starting with the most effective): 1. Our driver app that was published in app store attracted the majority of leads; We were able to put a good description on it, added nice screenshots, and we had more than 100 registrations in the short period of time 2. We’ve used Mailchimp to send feature update newsletters to everybody who’s registered, where we’ve explained the toolset a bit better, what was added new in it. We then tracked the open rate, and who exactly has opened an email, and we would reach out to those folks first. 3. Our website taxi20.com along with a limited Google AdWords campaign generates a good visit rate. Unfortunately, the conversion stays quite low, we’re trying to understand why and improve on itSales StrategyWe have found the following strategy to be the most effective. It doesn’t allow to scale fast, but we’renot ready for that either.1. Monitor who would have recently registered2. Take those who’s been the most active (created orders in the system, setup company, drivers, etc)3. Contact them using the phone they’ve provided and discuss how we can help4. In 99% of situations these people will be the decision makers, since they would own the company
Costs & revenue To support the company at its current state, not taking into account future scaling, we are incurring the following annual costs: -$10’000 royalty payment for using Google Apps for Business -$15’000 salary costs for our offshore development team -$1000 server hosting Currently the startup is 100% funded by its founders Denis and OlgaRevenueOur revenue model assumes 1% commission on every order made through any of our Taxi 2.0products. An average taxi company would own about 20 cars, each generating about $2’000 ofrevenue monthly, which would translate to about $20 per car per month, or $400 for a companyof 20 cars. When talking to the actual prospects, we’ve figured that the range of willingness topay is somewhere between 15 and 25 dollars per car. Also we’ve understood that the percentagebased payment works better than a monthly subscription, since there is a clear dependency onhow successful is the taxi company. If they’re running on their quite time, their payments to us godown accordingly.Other potential source of revenue could be advertising on receipts and through the customerapp, once we have enough passengers using it.The potential market size in North America is about $100 mln, and about $200 mln in Europe.
Partners & distributionThe product is mainly distributed through web as well as through Apple Store andGoogle Play. The application is marked as available in every country.Throughout the execution we were able to attract several partners in specificregions. These partners usually own a local cab or limo business but want to goabove and beyond their existing niche by adopting the new technology. This hasdriven us to open a new distribution type through white labeling ourapplication, so that our partners can re-sell it to local companies under their ownname and pricing model.Our pricing model makes it compelling for the partners to add their ownmargin, since most of our competitors charge from 10 to 20%. Since we onlycharge 1%, our partners have quite a bit of freedom to get a good share in this.
RisksOur main risks right now are, in the order of severity:Market. The Taxi 2.0 industry seems very hot, and there are a lot of well fundedstartups flowing in. Most of them capitalize on the basic idea of ordering taxithrough a mobile phone, and rarely go beyond that by ordering a full turnkeysolution. We manage this risks by actively engaging local partners, rapidly learningfrom our customers and establishing ourselves in local regions, which aren’t takenover by any competitors yet.Financial. Absence of funding doesn’t allow the founders spending 100% of theirtime on the idea, which slows down the progress significantly.People. While we have good team of developers and architects, we’re lackingenough sales force to promote our software worldwide.
Driver app screenshots Driver GPS coordinates are communicated to server every 5 seconds, so dispatcher can see all drivers on a live map All assigned jobs are Driver promptly sends Order pricing isdisplayed for the drivers his updates calculated automatically
Web tool screenshotsReal time order booking calculates route and estimates charges based on the pricing rules
Web tool screenshots Driver position is updated every 5 seconds. Job summary isshown when clicked on the driver’s marker. Time to next job is auto-calculated and highlighted if not enough time