An increasing number of taxis and private hire vehicles are being outfitted with embedded telematics units, systems that allow drivers, fleet operators, and insurance companies to access analytics from traffic patterns to driving behaviors and fuel consumption. However, the person at the pedal of telematics growth in the industry isn’t the cabbie, his manager, or even their insurer: it’s the passenger, rigged up with a smartphone app that allows them to locate and order rides.
Smartphones will drive telematics penetration in taxi and private hire vehicles to 21% globally by 2019, according to analysis by ABI research. However, the most popular apps are bypassing traditional cabs and taxi companies altogether. Apps like Uber and others offer for peer-to-peer hiring and ridesharing models that could radically revolutionise–and possibly disrupt–the heavily regulated taxi market.
“Some [apps] such as Hailo work with the independent taxi drivers, but by-pass the taxi companies,” said Gareth Owen, principal analyst at ABI Research. Others like Uber compete directly against established taxi drivers and companies, providing “on demand” black car services booked entirely through the app. Only a third type, including apps like Kabbee, work through established taxi and private hire fleets, providing comparison and booking services for users.
Uber, however, is getting all the press, but not all of it has been positive. Recent high profile stories about unsolicited promotions from celebrities angling for free fares, underhanded and possibly illegal attacks on competitors, and even the killing of a child by an Uber car in its home base San Francisco have thrown into question the ethics of the £2 billion, Google-supported startup.
Even as Uber seems to self-destruct, taxi companies are on the offensive, hoping to spin notoriously strict cab laws to their favor and the regulate apps like Uber out of existence. They’ve been lobbying regulatory authorities to issue guidelines on the use of apps in taxis, under the banner of reducing driver distractions, and about payments smartphones.
In China, where telematics systems are already mandatory in cabs, cities have already taken action to ban some taxi apps: Authorities in Shenzen have banned all apps that hail cabs, while governments in Beijing, Shanghai, Wuhan, and Nanjing have issued strict regulations regarded them, including rules that outlaw bidding among cab companies. However, these cities also recognise that their technologically literate, well-wired citizens won’t be kept away from new technology that eases their journeys through China’s crowded cities for long. As it cracked down on independent taxi apps, Beijing issued it’s own batch of officially credited systems, connected to a united booking platform and bundled to taxi control centres.
Meanwhile, taxi app companies are so assured of their success, despite the uncertain regulatory climate, that they’re pouring billions into expansion, each jockeying to gain control of the chaotic market. ” “Although it remains to be seen whether these companies will ultimately become profitable, the sheer convenience of these taxi apps means that very few of those who have used them will want to do without them, and so taxi apps are probably here to stay,” adds Owen. If cab companies want to stay competitive, they’ll have to do more than simply cry for regulation: they’ll need to work with startups to develop their own apps to compete in an increasingly smartphone-driven vehicle hire market.
L. V. Smith
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