Intercity Cabs
Shared economy or collaborative consumption has been enabled more after the arrival of technology, mobiles in our pockets and the internet.
“Shared economy” is a concept where an individual can share, rent and borrow goods and services on a peer-to-peer basis. This helps in the excellent use of underused resources owned by individuals. These underused resources can include things like cars, homes, tools and even skills. Many businesses are based on the concept of the shared economy. Companies like Airbnb, Uber, Stashbee, Fon, Spotahome etc., leverage the shared economy model.
Today, we will talk about online taxi companies in the shared economy. We’ll be zeroing in on their intercity travel offerings.
Hailing a taxi has become a daily staple for some people. Having to reach your destination by car without the hassle of owning one. Renting a cab is both a practical and a savvy solution. By opting for a taxi, you avoid the hefty costs associated with car ownership, such as the initial investment and ongoing expenses, making it a smart choice for travellers.
Online cabs
Taxi services were only a very convenient option for transportation after the emergence of popular taxi aggregators like Uber and Ola. There were several hurdles associated with using them. One of them was its unpredictability. Hailing a taxi on the street or calling for one was unpredictable and time-consuming. Along with this, there was a lack of transparency, reliability, and convenience, but with the arrival of the breakthrough of taxi giants, the whole landscape changed. Booking and finding a car have become much more accessible, anyone with a smartphone could book a cab comfortably, and safety was also a concern while travelling on public transport. With the arrival of companies, that issue is also addressed to a certain extent.
The comfort and transparency of prices even added more people to the segment of people who opt for taxis for intra-city travel. As a result, more people started using the service and, interestingly, started opting for taxis for comfort and affordability. Before the emergence of online ride-hailing companies, many people used to rely on auto-rickshaws for Intra-city transportation.
Autos and bikes also started registering themself on ola and uber, but still, they find these aggregators disrupt the market and lower their income. The Online cab booking breakthrough was possible in India because companies provided better services at comparatively less price for intracity travel. But what happens when someone has to travel intercity?
Intercity Travel
While large companies offer intercity travel services, they have yet to achieve widespread success.
Intercity or outstation travel has yet to receive a good response from the public. The public has not received it well, primarily due to high fares and negative experiences. From reading numerous reviews on various platforms, it is evident that several common issues are recurring among users of these services.
If we see, local companies that operate at the local level often perform well in intercity taxi services. One key factor is their ability to offer affordable services as they are able to efficiently serve the same routes.
Intercity Market
The outstation travel market in India, valued at USD 66 billion and encompassing private and public transport options like trains, flights, and 4-wheeler taxis (including online players like Ola and Uber), is expected to grow. Outstation bus businesses currently hold the largest market share at 46%. Increased demand for more public and private transportation options for outstation travel is anticipated.
Lack of facilities for outstation cabs
Travellers from tier three or two cities often need to travel to tier one cities where the taxi giants like Ola and Uber already operate. However, a significant limitation is that these companies only provide outstation services between cities they already serve. As a result, if someone wants to travel from a tier one city to a tier two or three towns with no service, they cannot book a cab. This leaves these individuals unable to fully utilise the service and effectively left behind.
Many online sites claim that they provide one-way taxi services to the user to the places where online taxi aggregators do not operate.
While they claim it, their price says otherwise. The one-way fare they show is equivalent to a two-way ride.
Also, local companies provide intercity taxi pooling, which makes people’s travel a lot more affordable. However, online taxi services have become much more complex because they offer door-to-door pickup and drop; pooling means the extra distance to pick up and drop off multiple riders.
Finding cabs or busses during festivals becomes impossible if you haven’t booked the service in advance. People travel on overcrowded trains to their hometowns, willing to pay double the amount.
India has a lot of migrant workers and students who come from tier two or three cities to pursue their dream. The number of people moving in and out of the town can be studied as to how the pattern changes during the festive season. Is there some equilibrium?
This is something how things operate when you book an online taxi. Outstation or intercity also works similarly.
After completing an intercity trip, drivers usually return to their home or base location. They may also accept more trips if they wish, but only if the pickup and drop-off locations are within the service’s area. However, there is no guarantee that the driver will be able to secure a return trip from the drop location back to the city.
When a customer books an outstation taxi from City A to City B using the transportation application, the system will simultaneously search for a return trip from City B to City A. This allows the cab to be utilised for both trips, reducing the customer’s cost and maximising the driver’s earning potential. In addition, the booking schedule for the return trip can be decided based on the driver’s preference, whether on the same day or alternate days. This system ensures that the cab and the driver are being utilised to their fullest potential, benefiting both the customer and the driver.
Furthermore, this system can also benefit the driver’s daily routine and work schedule. For example, when a driver is en route from City A to City B, they can receive a booking request for the return trip from City B to City A. This means that as soon as they reach City B, they can immediately start their return trip, optimising their time and utilisation of the cab.
The idea I initially came up with may have limitations and difficulties in implementation. While writing it, I realised this, but the cost fallacy bias kept me focused on it. The solutions I have devised to address the problem may be overly complex and introduce new issues and challenges.
The texts suggest that it may be necessary to reevaluate the initial idea or approach the problem from a different perspective if the solutions devised are overly complex and introduce new issues. These points provide actionable insights for problem-solving, reminding one to carefully consider the practicality of solutions before proceeding with their implementation.
