For years, one of the most reliable types of business was also the simplest: running a taxi firm. The idea was incredibly simple – procure cars, hire drivers, and then transport passengers to and from their destinations – but effective, catering to an undeniable customer demand that allowed firms to flourish with success.
In 2020, the picture is a little different. Now, taxi firms have fallen into the background, overtaken by apps such as Lyft and Uber. As a result, one of the steadiest types of business can now seem out of reach for a prospective business owner looking for a company to start. It is, however, worth asking if taxi firms have really had their day – or if this conventional business type could still perform well in the modern age.
The problems with the apps
For all of their popularity in some quarters, apps such as Uber and Lyft have not been without their problems. From reports of unlicensed or uninsured drivers to dealing with license suspensions, the apps have been controversial from day one. As a result, a not-insubstantial number of passengers are eschewing or even boycotting these options in favour of taxi firms, which are better regulated and can provide a superior customer experience without any associated controversies or concerns.
It therefore naturally follows that if customers are seeking alternatives to Uber and Lyft, then there may well still be a place for standard taxi firms in the modern world.
Considering the paradigm shift that might not happen
Since their inception, apps such as Uber and Lyft have frequently been discussed as a “paradigm shift” in terms of how people travel and access taxis – a one-way change that, after a period of time, will see the end of taxi firms as we once knew them. There’s some truth to the expectation of total dominance for the apps, but there is one serious fly in the ointment: profitability. Ride-sharing apps have struggled to be profitable since their inception; Uber, for example, is considered to be the leader in the market but the company has literally warned that it may never be profitable and issues have worsened due to the coronavirus pandemic. Such facts are not ideal for a paradigm shift-worthy business; in fact, they even hint towards the exact opposite – that Uber and those like it are a flash-in-the-pan trend.
When the so-called game-changing businesses are in such trouble, “old-fashioned” taxi firms can still find their place – consistent, stable, reliable, and free of the unprofitability that has dogged the new, high-tech options.
A question of practicality
As we have discussed thus far, there is reason to believe that taxi firms can still be a viable business in theory – so does this mean every would-be business owner should launch their own firm and then look forward to immediate success?
Not quite. We have looked at the taxi world holistically, but on a very generalised basis; caution and, particularly, research are still crucial. Before moving forward with the idea of opening a taxi firm, prospective entrepreneurs need to consider their due diligence, researching every aspect of the passenger transportation industry and considering factors such as their local area and whether there is any competition from other non-app taxi firms in the region.
However, if the research returns positive results, it is reasonable to conclude that taxi firms can succeed even in an era that once seemed destined to be defined by ride-hailing apps. Taxi firms can serve local needs well, enjoy popularity with a broad section of society for a range of reasons, and can produce excellent profitability – everything a modern business requires.