A Step-by-Step Guide to Developing Your Own Taxi Booking App: Taxi Booking App Development

Table of Contents:

Why Business Should Invest in a Taxi Booking App Development
Reasons to Build a Taxi Booking App
Options Your Business Has in a Taxi Booking App Development
How Can You Make Money with a Taxi App?
The Most Popular Taxi Apps in the World
How to Succeed in Such a Competitive Landscape?
Key Features to Include in Your Taxi Booking App
How Much Does It Cost to Develop a Taxi Booking App?
Taxi Booking App Development Process: Create a Minimum Viable Product (MVP)
Taxi App Development: Final Thoughts

Transportation industry is evolving rapidly, so if you have a revolutionary app idea, you need to keep up with innovative solutions and solve people’s pain points.

These days, most of us are used to having everything within minutes. We need to commute immediately and waiting for a car for 5 minutes feels like ages! As a result, commuting has become significantly easier than before. People can use taxi booking apps that are easily available on all app stores. It is also very likely that you have at least one on-demand transportation app on your phone, right?

If you’ve ever thought about investing your resources in taxi booking app development, the time and conditions are perfect. Creating an app like Uber holds strong business potential because the global taxi app projected value for 2026 is $150 billion. This projection signifies a notable 50% growth compared to the forecasted value for the year 2023 (Business of Apps). However, you have strong competition – Uber, Lyft and Bolt are just a few providers of similar apps.

In this article, I’ll tell you all you need to know about creating your own successful taxi booking app, guide you through the development process and share some tips, and finally tell you more about how to succeed in such a competitive landscape.

Why Businesses Should Invest in a Taxi Booking App Development

Undoubtedly, taxi service providers are the primary players seeking to build a taxi app. By embracing this technology, companies offering taxi services can enhance their brand visibility, elevate customer experiences, and consequently boost their revenue streams. The ever-growing demand for such apps and the rapid expansion of the online taxi booking market make it imperative for taxi service providers to have their own apps, ensuring they remain competitive in the evolving landscape.

However, investing in a taxi app can prove to be a valuable decision even if your business doesn’t align with the traditional taxi service model. If your company is involved in passenger transportation and, for example, manages a fleet of buses, developing a kind of taxi booking app can be a strategic move to diversify your service offerings. This approach could also be equally applicable to public transport services since the core need of customers remains similar – getting from point A to point B.

By integrating various modes of transportation, such as buses and taxis (or even public transport) within a single app, customers can conveniently book rides online and track the location of their chosen mode of transport.

Not only does this streamline the customer experience but also provides valuable data insights, broadens your customer base, gives you a competitive edge, and showcases your adaptability to modern technological trends. Ultimately, such an app can strengthen your brand’s presence, customer engagement, and operational efficiency, making it a smart investment for various business models.

Investing in taxi app development is a strategic move for businesses that want to take advantage of the lucrative and rapidly growing transportation and taxi market. Let’s delve into the numbers to get a deeper insight into the taxi app landscape.

Taxi App Market: Statistics

According to Statista, the revenue in the ride-hailing & taxi market is projected to grow to $154.00 billion in 2023. Furthermore, the industry is expected to witness a steady annual growth rate of 7.04%, projecting the market size to reach $202.20 billion by 2027. The user penetration is projected to rise as well – from 21.9% in 2023 to 24.2% by 2027.

Let’s take a look at the statistics of Uber, a key player in this industry. Uber generated a staggering $14 billion from ride-hailing in 2022. The statistics also highlight that Uber drivers completed 7.6 billion trips in 2022, surpassing its previous peak of 6.9 billion trips made in 2019 (Business of Apps).

Reasons to Build a Taxi Booking App

The market is constantly growing, leading to an increased interest from companies in developing taxi apps. Whether you’re already in the taxi business or thinking about entering, utilising these apps can improve the experience for both drivers and passengers, providing various advantages. Let’s talk about them.

Passengers can enjoy the following benefits:

• Convenient and time-saving taxi ordering that allows them to hail a ride with just a few taps on their smartphones.
• Easy-to-use payment options, streamlining the payment process and enhancing overall user experience.
• Clear transparency and increased safety, as they can track their ride in real time and share details with trusted contacts.
• Accurate ride cost estimates, providing financial clarity and helping passengers plan their travel expenses effectively.

As for drivers, they also experience a range of benefits:

• Improved passenger pick-up system, optimising their routes and minimising waiting time, ultimately leading to increased earnings.
• Online payment capabilities, ensuring swift and secure transactions without the need for handling cash.
• Valuable feedback from each passenger leading to continuous improvement and better service delivery.
• GPS assistance for seamless city navigation, enabling efficient and timely pickups and drop-offs, enhancing the overall driver experience.

Don’t wait – someone will soon come up with an idea similar to yours. The challenge is to bridge the gap in underserved areas.

The idea is the key

For example, what about a taxi app that integrates different types of transportation providers, such as traditional taxis, private drivers, and rideshare services? Such a platform could serve as a hub, allowing users to access a wide network of transportation options all in one place. By doing so, it would significantly reduce waiting time, streamlining the process of finding a ride. Users could book a taxi seamlessly, regardless of the taxi company, and choose the quickest option through a single app. This integrated approach would greatly enhance convenience, especially in areas where transportation choices are typically limited. Instead of juggling multiple taxi apps and contacting various drivers, everything would be conveniently available in a single app.

Options Your Business Has in a Taxi Booking App Development

Now, let’s discuss the two main business approaches in on-demand taxi booking apps: the aggregator model and the dedicated model.

Dedicated Taxi Booking App

A dedicated taxi booking app is a platform that is typically owned and operated by a single taxi service provider or a company. In this model, the app exclusively represents a specific taxi service. Users of the app can request rides from the fleet of vehicles owned by that particular service. The app focuses solely on providing the services of that specific taxi company, ensuring a consistent user experience aligned with the brand’s standards. This model allows the company to maintain control over pricing, service quality, and customer interactions.

This kind of app can become or be built as a SaaS solution, too.

Aggregator Taxi Booking App

An aggregator taxi booking app, on the other hand, acts as a middleman connecting riders with various individual taxi service providers. These apps do not own or operate their own fleet of vehicles but instead collaborate with multiple taxi companies or individual drivers. Users can choose from a range of available options, considering factors like pricing, estimated arrival time, and user ratings, all within a single app.

Aggregator apps offer a more extensive choice of services, enabling users to compare and select the most suitable ride based on their preferences. This model provides flexibility and variety to both drivers and passengers.

How Can You Make Money with a Taxi App? Monetization Models

Commissions

Uber, Lyft and many other popular taxi platforms commonly charge a commission fee (usually a percentage) on each ride completed through their platform. For example, they might take 20-25% of the fare, leaving the rest for the driver. In addition to commission fees, taxi apps often employ a flat booking fee that can be charged to both the driver and the passenger.

Another option is cancellation fees which can be implemented in case a passenger (or a driver) cancels a ride, providing a source of revenue for the platform.

Then, surge pricing is indeed a crucial aspect of taxi app monetization, especially during peak demand times. This pricing strategy allows your platform to increase fares temporarily, maximising revenue during high-demand periods.

Advertisements

Another money-making move for your taxi app can be partnering up with local businesses and letting them advertise within your app. Allow them to display targeted ads, promote local businesses, restaurants, and other services to users, and earn revenue from advertisers.

Partnership

Taxi apps often collaborate with hotels, airports, or events, receiving a commission for every ride booked through their apps or from their locations.

Another option to gain revenue is forming partnerships with companies to provide transportation services for their employees. This involves negotiated rates or contracts and may ensure a steady stream of revenue.

Data Monetization

Taxi apps can anonymise and aggregate user data, selling insights and analytics to businesses, researchers, or urban planners who are looking for travel patterns and behaviours. However, to avoid trust issues and potential legal problems, you must prioritise ethical considerations and adhere to privacy regulations.

Subscription

You can also opt for a subscription model with your taxi app. Let’s take a look at Uber: they offer a subscription service called Uber Pass, where users pay a monthly fee to get benefits like discounted fares, waived cancellation fees, and more predictable pricing.

If you’re interested in delving deeper into different monetization models and understanding their features, advantages, and drawbacks, I suggest giving Katarzyna Sobczak-Rosochacka’s (our Head of Marketing) article about it a read. App monetization strategies have become essential for sustaining businesses, so finding the right fit for your app type and target audience is crucial.

The Most Popular Taxi Applications in the World

In this section, I’ll discuss the most popular global taxi apps and their usage. Additionally, I’ll provide a glimpse into their financial performance in 2022, offering insights into their revenue and market size, all based on data from Business of Apps.

Uber

Uber, recognised as one of the leading and widely used ride-hailing services worldwide, operates across a multitude of countries and cities.

Revenue: $14 billion in 2022

Market share: 71% in the US; 74% in the UK; 37% in India

Lyft

Lyft is a major competitor to Uber, primarily operating in the United States and Canada.

Revenue: $4.09 billion in 2022

Market share: 24% in the US

Bolt

Bolt is an Estonian operator currently active in 35 countries in Europe, Africa, and the Middle East.

Revenue: $1.08 billion in 2022

Market share: 23% in the UK

Didi

Didi is one of the largest ride-sharing companies in China, offering a variety of transportation services, including taxi hailing, private car services, and bike-sharing.

Revenue: $19.7 billion in 2022

Market share: 91% in China

Ola

Ola is a leading ride-sharing platform in India that has also expanded its services to other countries. It provides various transportation options, including cabs, auto-rickshaws, and bikes.

Revenue: $0.17 billion in 2022

Market share: 50% in India

How to Succeed in Such a Competitive Landscape?

Regardless of the nature of the app you plan to create, understanding your target user base is a key aspect. Carefully examining their pain points and developing unique solutions is fundamental. This approach reflects the essence of successful applications that excel at solving specific challenges. This is also why commuters and travellers rely on them so much.

For example, if you build an app for women who care about luxury, convenience and safety, you need to think about them while building your taxi booking app. Instead of casual rides, you could offer premium service, including fancier cars or scheduling future trips even a few weeks in advance. The convenience of ordering such a cab with a few taps on their smartphone will always win over hailing or other transportation modes. You could also integrate the app with their trip planning applications and send push notifications about the closest driver when they might need it the most!

Key Features to Include in Your Taxi Booking App

In software development, identifying the necessary panels or dashboards and their required features is fundamental for seamless functionality. For a taxi app, it means designing distinct panels customised for different stakeholders like passengers, drivers, and administrators.

Let’s discuss those panels and key features you may want to implement within them!

For Passengers Panel

User Registration and Profile Management

A personalised profile page is a fundamental feature for users. It enables them to create and manage their profiles, providing essential information like name, contact details, and payment preferences for a personalised experience.

Ride Ordering

Implement an intuitive interface for booking on-demand rides or even scheduling future trips, giving passengers flexibility in planning their journeys. Moreover, you can use AI algorithms to help users analyse historical data, traffic patterns, historical pricing data and other variables. Based on that information, they can predict ride demands for specific times and locations, make informed decisions and pre-book rides, minimising wait times and optimising cost.

Voice and Chat Interaction

Implementing advanced features like AI-powered voice and chat assistants will allow users to book rides, get fare estimates, or ask for assistance using spoken language. Then, AI processes these interactions to provide relevant and accurate responses.

Ride-Sharing

What about enabling users to share their rides? If they’re heading in the same direction, they can book a shared ride and get out of the car along the way.

Fare Estimation

Offer a fare calculator based on ride distance, time, and any surge pricing, enabling passengers to estimate costs even before booking.

Push Notifications

Once a user has booked a taxi, send them timely notifications regarding the ride status and driver details, so they are ready when the taxi arrives.

You can raise the bar by using Machine Learning technology to send personalised notifications and promotional offers, keeping your passengers not only informed but also highly engaged. Customising offers based on individual preferences increases the effectiveness of these notifications, providing users with a great and tailored experience.

Real-Time Vehicle Tracking

Make sure you integrate GPS technology to allow passengers to track their rides in real-time, ensuring transparency and safety during the journey.

Location Sharing Feature

Location Sharing Feature allows users to send their current location through the app to friends and family, protecting them in case of emergency. Additionally, it could even allow users to create a group, like a “virtual family,” where everyone can see where the others are going and with whom!

Emergency Buttons

Emergency buttons within the app will increase safety, allowing users to quickly ask for help and send their current location to emergency services if needed.

Secure In-App Payments

Allow users various payment options (credit/debit cards, digital wallets) so they can use the most convenient and secure for them.

Bill Split Feature

Bill split feature will allow each of the passengers to pay for their own part of the ride even if only one person makes the booking.

Chat function

Consider enhancing communication between drivers and passengers to coordinate pickups and drop-offs more effectively. One approach could involve integrating a basic in-app chat system. Moreover, to facilitate communication between individuals who speak different languages, you could incorporate a translation tool within the chat functionality.

Calling Feature

Another important feature is the ability to call the driver in case of any issues with the chat or notifications. If those aren’t working properly the user might need to contact their assigned taxi driver. Offering the driver’s phone number for direct calls can be immensely useful.

Ride History and Receipts

Provide users with previous trip history and digital receipts for easy reference and expense management. You can implement Artificial Intelligence that will automate expense reporting for corporate users, categorising rides, generating reports, and integrating seamlessly with corporate accounting systems, streamlining expense management for business users.

Ratings and Reviews

To help maintain the service quality and build trust within the community, allow passengers to rate and review drivers.

Customer Support

Last but not least, offer an in-app support system, enabling passengers to seek assistance, report issues, or provide feedback.

For Driver Panel

Driver Profile and Verification

First of all, drivers should have the option to sign up and submit necessary documents with personal information and vehicle information for verification and safety reasons.

Accept/Reject Ride Requests

Provide an option for drivers to accept or reject ride requests based on their availability and proximity to the passenger. Another option is to use AI algorithms that will intelligently match ride requests with available drivers based on factors like proximity, driver ratings, and user preferences.

Additionally, it’s important to consider the legal aspects and licensing requirements for managing rides. In some cases, in areas outside major cities, ride cancellations often occurred because drivers lacked the specific licenses needed for some services. Implementing a system that ensures drivers have the appropriate licenses for the requested service can help streamline operations and prevent such issues, improving user experience at the same time.

Navigation and Route Optimization

To assist drivers in reaching destinations quickly, integrate your taxi app with GPS tools (like Google Maps) for efficient navigation and route optimisation.

Earnings and Trip History

Display a summary of earnings, trip history, and payout details to keep drivers informed about their wages and performance. Additionally, what about implementing an AI feature that will provide the driver with insight into the earnings and predict future pay based on the past months’ activities?

Chat & Call Function

Think about implementing a straightforward in-app chat feature to facilitate communication between drivers and passengers for coordinating pickups. This chat function could also integrate a translator tool, ensuring smooth communication between users who speak different languages.

Calling Feature

Another option is to provide a calling feature that allows a quick call between the user and the driver while the taxi is on route. This enhances real-time communication and coordination, making it easy for both parties to connect.

Virtual AI Assistant

Consider incorporating a virtual AI assistant, available in the form of either voice or text chat. This assistant could engage in conversations with the user, gather relevant information, summarise the details, and add necessary notes for the driver. This additional layer of assistance would definitely enhance user experience and ensure clear communication between users and drivers.

Driver Availability Settings

Allow drivers to set their availability, switch between online and offline modes, and manage their working hours. Everyone wants to maintain a work-life balance these days, right?

For Admin Panel

Dashboard and Analytics

Admin Panel should include an overview dashboard with key metrics and analytics to track app performance, user engagement, and financial data. It could allow to generate detailed financial reports, and track revenue and expenses. An additional option could be implementing AI predictive analysis to predict when more people might use the app based on past data.

User and Driver Management

Enable the admin to create, modify, and manage user and driver profiles. It should include tools for identity verification, background checks, and resolving disputes. To take it even further, you can use AI that automates identity verification processes and flag suspicious activities for further review, enhancing security and efficiency even more!

Fare Management

Make sure admins can set base/ceiling fares, dynamic pricing (like surge pricing during peak times), and discounts for users. You can also use AI algorithms here that will analyse demand patterns, traffic conditions, and historical data to optimise pricing strategies, ensuring competitive fares.

Promotions and Marketing Management

Admins should create and manage various promotions such as discounts, coupon codes, or referral programs to attract and retain users. Then, AI-powered recommendation engines can suggest personalised promotions based on user behaviours and preferences, maximising their effectiveness!

Feedback and Reviews Management

Provide a system to view and moderate user reviews and feedback to enhance service quality. Think about processing these reviews, and categorising them into positive, negative, or neutral sentiments. Additionally, integrating a tool like Brand24 for internet monitoring can enhance the feedback system by tracking and analysing online mentions and discussions related to the taxi service. This analysis would help the admin identify areas for improvement and respond to user concerns effectively.

Support or Helpdesk

Support or Helpdesk feature equips admins to handle support requests, inquiries, and issues from users and drivers. As Natural Language Processing (NLP) can understand and respond to user messages effectively, AI-powered chatbots can provide instant responses to common queries, guiding users step-by-step and relaying complex issues to human operators.

How Much Does It Cost to Develop a Taxi Booking Mobile App?

The expenses involved in developing a custom taxi booking app can vary greatly depending on several key factors. Before you start building a taxi app, you need to make some key strategic choices. These decisions will impact the overall cost, schedule, and number of experts you can engage or hire.

Scope of the Project

In defining the scope of your project, you need to first decide between developing a comprehensive application or building a Minimum Viable Product (MVP). The comprehensive application would involve an extensive set of features and functionalities, covering the wide range of capabilities for a fully-featured taxi booking app. On the other hand, developing the Minimum Viable Product (MVP) assumes focusing on creating a simplified version of the app with only the core features essential for its basic operation.

For a deeper understanding of estimating costs and considerations for developing a Minimum Viable Product, I recommend reading my comprehensive article, which includes an example related to a taxi booking MVP development cost.

Choosing the Right Development Partner

Choosing the right development partner and understanding various outsourcing models, such as onshore, nearshore, and offshore, are essential in the process. That’s why, I recommend you to read Mike Popov’s insightful article, in which you will find a comprehensive explanation of outsourcing models with the advantages and disadvantages associated with each.

Another crucial aspect is deciding between working with freelancers or software development companies, as each option has its pros and cons. To delve deeper into this topic and make an informed decision, I suggest reading another article on choosing between freelancers and software development companies.

To further enhance your understanding and ensure you make the best choices for outsourcing your software development projects, I encourage you to explore Mike’s detailed guide on outsourcing software projects. This resource will provide you with valuable insights and assist you in making decisions that align with your project requirements and goals.

Feature Complexity

Feature complexity significantly impacts development costs, as more complex features require greater investments and resources for successful development.

Also, keep in mind that estimating costs accurately in software development is challenging due to numerous variables and uncertainties. For this reason, I even created a dedicated article that discusses this topic in detail, explaining the common issues with estimating projects. By reading it, you can learn more about how to read estimates and what to watch out for comparing them.

However, you can obtain an accurate cost estimate by carefully evaluating the complete scope and tasks involved in developing your taxi app, considering fundamental features specific, and assessing the complexity of integrating these features. Moreover, working closely with the development team will definitely help you obtain a more precise cost estimate that is in line with your project requirements and financial parameters.

Taxi Booking App Development Process: Create a Minimum Viable Product (MVP)

In this section, I won’t go into the intricate details of every step involved in developing a taxi booking app. If you want a comprehensive understanding of the development lifecycle, I have a dedicated article guiding you through the process – feel free to explore it. However, here I’ll emphasise the importance of starting small and adopting the MVP approach.

Low–Cost Non-Development MVP

In the journey of developing a taxi booking app, starting with a Minimum Viable Product (MVP) is a smart approach. Your MVP can take various forms, such as a social media post, a landing page, or utilising no-code solutions. Leveraging them at the beginning will enable you to validate your idea without a significant initial investment.

However, if this all sounds new to you and you’re not familiar with the whole idea of MVP, you can check my article in which you find the MVP definition and reasons why you may need it.

Simplified Version of Your Taxi App

Once you have validated your idea, you can start the MVP development part as a simplified version of your app.

Uber’s Case

A great example of this strategy can be seen in Uber’s early days. The Uber MVP’s core feature was to just enable users to book a ride by specifying their location. Then, the app would locate a nearby cab and dispatch it to them. With their focus on testing ride-sharing demand, they limited the service only to San Francisco and New York, effectively managing the number of initial users.

Despite its simplicity, this MVP was instrumental in validating the Uber founders’ idea and gathering crucial feedback for app improvement. It provided a solid foundation for Uber, allowing for additions like in-app tracking and fare estimation as they evolved.

As you see, the strategy for creating an MVP differs from making a comprehensive application. To gain valuable insights and avoid common pitfalls while developing an MVP, refer to my article, where I provide guidance on what to be mindful of during the process and offer suggestions for effectively addressing these challenges.

Fundraising’s Tool

The MVP stage is crucial in determining the viability of your taxi app idea, and feedback from actual users will be priceless for future improvements. Moreover, an MVP can serve as a tool for fundraising, be it through crowdfunding platforms or attracting potential investors.

If you want to learn more about how to raise funds for your app idea, don’t hesitate and read Jakub Drynkowski’s article (CEO at TeaCode), in which he shares his experience and knowledge about fundraising strategies.

To sum up, starting with an MVP in the development of your taxi booking app allows for a cautious and cost-effective approach, ensuring that you validate your concept and gather essential feedback before making substantial investments in development.

Taxi App Development: Final Thoughts

The transport sector is growing rapidly, reflecting the growing demand for taxi booking apps.

If you already own a transport company, having a customised taxi app not only engages existing customers but also opens the door to attracting new ones. The situation is similar even if you are just entering the transportation industry. A well-thought-out taxi app can make a significant difference in the extremely competitive transportation industry.

To ensure the success of your taxi app, the most important thing is to thoroughly research your target audience. Understanding their specific needs and preferences allows you to tailor the application to their requirements. By providing a user-friendly app with numerous benefits, you can expect greater customer satisfaction, greater loyalty, and a deeper understanding of your audience.

If you have any questions about the development process, please contact me on LinkedIn or via email at [email protected]. I wish you all the best in your taxi app development journey!