TECHNO TIMES 2019: PREDICTIONS FOR A
NOT AT ALL QUIET YEAR AHEAD…
Happy New Year to you all. As you of course know, 2019 in the Chinese Zodiac is the Year of the Pig… whereas some might say the economic uncertainty in Britain means it could be the Year of the pig’s ear! Whilst aiming to avoid
yet another mention of the B-word, here’s some crystal ball gazing on what might emerge for the cab sector in yet another transformative year.
ALMOST EVERY WAY OF GETTING AROUND TOWN WILL BE OFFERED
Transport players will scramble to offer ‘multi modal’ transport options, whether it’s the arrival in the UK of e-scooter hire platforms such as Bird, or Ford running its Chariot local minivan service…to the point that ‘walking’ will look so last century! Packaging these various options within one app will be attempted, as evidenced by Uber’s latest mission to be the ‘Amazon of transport’ (which one day Amazon itself might aim to be). Whether customers will favour a single app with multi modal options vs. using specialist apps for each mode is still to be proven. That leads onto the next prediction…
ALMOST EVERY WAY OF BUYING TRANSPORT WILL BE TRIALLED
Lyft, the other US ride-sharing giant, has been trialing a monthly subscription service for a package of trips ($199+ a month anybody?), whilst Drover enables customers to subscribe Netflix-style to car ownership. 2019 will see increasing experimentation in bundling different or complex transport purchases into a simpler tariff structure. Meantime, Uber has announced it is launching a customer loyalty points scheme in the US where customers can earn discounts and upgrades on future cab trips – you can be sure they will bring this to the UK. How can private hire firms respond? By ensuring you stay responsive and always optimise the quality and price of your service, diminishing any customer stickiness to on-demand platforms that typically offer price surges and variable quality.
TECHNOLOGY WILL FINALLY BE THE DRIVER OUTSIDE LARGE UK CITIES
To date, booking online via an app or website has become more of a habit in the
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major conurbations. This year, customer expectation in the smaller towns and cities will also be to book cabs online. As a result, the spotlight should also brighten on the better cab dispatch systems, as digitisation of cab fleets will increase. Last year saw Renault-Nissan purchase iCabbi and Cordic receive venture capital investment, so it will be interesting to see how other dispatch systems respond to this challenge and opportunity. At the same time, targeting and sourcing customers online cost- efficiently will be much more complex and expensive, as digital channels become more sophisticated to manage. The benefits of aggregators such as minicabit as a source of online customers will become even more visible in the same way that,
for instance,
booking.com and
Expedia have benefited smaller, regional B&Bs, not just the largest hotel chains. Responsible care of customer data will continue to be at the forefront, given the GDPR rules introduced last year.
SELF DRIVING CABS WILL REMAIN ‘THE NEXT BIG THING’ BUT ELECTRIC VEHICLES ARE NOW UPON US
There will be increasing noise about the technological capabilities of self-driving cabs and local, real world trials will expand in the UK, but last year’s tragedy of the first pedestrian
killed during Uber’s
autonomous cab trial shows there are plenty of issues to resolve, from customer safety to liability to insurance. For me, the real stress test is managing the friction between erratically ‘human driven’ cars and autonomous ones in all weather conditions and winding roads, a milestone that will take several years to achieve. However, the push by local authorities and transport hubs such as airports to reduce carbon emissions – alongside the phasing out of diesel engine cars - will accelerate the adoption by fleets of all electric vehicles, which is no bad thing. Indeed, it’s an attribute that customers can opt for when choosing a cab operator on minicabit.
RIDE-HAILING MIGHT FINALLY FACE A CITY CENTRE DOGFIGHT
Unlike in virtually every other major cab market overseas, ‘you know who’ has expanded to a few UK cities without any competition from comparable, on demand ride hailing apps. That’s likely to change in 2019 with new launches in a few cities
around the UK by Ola and Taxify. That should mean more competition and a higher take for drivers, impacting the economics of Uber’s UK expansion on top of the local licensing issues it’s always facing. It could also pile more pressure onto existing private hire firms to find ways to retain their drivers, solutions for which include sourcing work through online marketplaces such as minicabit. Whether customers will switch to other ride-hailing clones remains to be seen but the ultimate winner should be Softbank, a Japanese investment fund that has taken stakes in all of the key ride hailing players and their rivals globally.
EMPEROR’S NEW CLOTHES OR A NEW ERA FOR TRANSPORT COMPANIES?
The two giant ride-hailing companies in the US are accelerating their stock market flotations early this year.
It will be
interesting to see how these players’ financial performance is subjected to much more public scrutiny, and will no doubt pave the way for other platforms around the world to explore the public markets. Already we’re seeing reductions in the previously unsustainable incentives they were offering to attract customers and drivers. The question is whether they’ll achieve the same public investors’ tolerance for ongoing losses in return for long term growth that Amazon attained, or will they be seen as a cash burning basket case? I suspect the former, with expansion into other areas such as food delivery and metro train ticketing serving as a distraction.
I’ve done my best to avoid the B-word so will leave you with a remaining thought - whatever the economic uncertainty, taking a cab will always be a certainty. The smartest cab operators who continually optimise their price competitiveness and quality of service can and will thrive. Indeed, minicabit itself was born in the depths of the last recession with a mission to help cab fleets of all shapes and sizes achieve this.
Article supplied by: Amer Hasan, CEOof minicabit, the UK’s largest cab comparison website
minicabit.com JANUARY 2019
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