FUTURE TRENDS
MINICABIT: 2020 – NEW PREDICTIONS FOR THE NEW NORMAL…
I hope you and your families are keeping safe in these trying circumstances. Nor- mally at the start of the year, I gaze into my crystal ball to offer some predictions for our sector. However, due to Covid-19, we’re now at the start of a new era so I thought I’d try to predict some trends in these unpredictable times.
Firstly, if you’re feeling anxious about how your cab business can navigate all this, just know that you’re not alone. This pandemic has impacted everyone, from Boeing to Branson, as we all try to figure out what the safety guidelines are for transport post-lockdown. Will we all need to wear masks or not? Should we prepare for a second surge of infections this winter? How far away is a vaccine that is readily available to the masses? Answers will hopefully emerge in the coming months.
Suffice it to say that no one knows how soon a recovery will happen. The only guidance we have so far is Uber’s equiva- lent in China, Didi, recently reporting a few months after lockdown that booking vol- umes are 70 per cent below pre-lockdown levels. What is likely is the following:
• The frequency of consumer and busi- ness travel this year will be lower, whether to airports, rail stations, hotels, restaurants, pubs or office meetings. Even if the social distancing require- ments at these venues don’t deter customers, personal and business trav- el budgets will be lower and comfort with remote working will be higher. This means those cab fleets that were focused solely on premium airport runs and/or executive work will need to get flexible and consider a broader range of trips and at lower price points.
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Influence will swing from drivers back towards cab operators. For better or worse over the last few years, ride hail- ing apps (mainly You-know-who) significantly expanded the pool of available private hire drivers in major cities. They could work more on a ‘gig’ basis for just a few hours a week and notably, have cash bonuses thrown at them just for signing up or completing target volumes of jobs. With unem- ployment sadly set to rise (especially from the leisure sector), a new supply
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Cab sharing services such as Uber Pool will likely face the axe – usage was already being impacted in the US where removing its driver subsidies and hence raising prices meant less savings for customers in taking a longer, shared trip with strangers vs. a quicker trip in their own cab for a little more. Indeed, sharing a small cab full of strangers won’t appeal in the new era of social distancing.
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of drivers could enter the market. It’s likely ride hailing apps, desperate to show their investors over the next year that they can reach break even, will leverage this over supply of drivers to end such bonuses whilst keeping their prices low to attract customers on tighter budgets. Importantly, this over supply could push more full time drivers towards regular private hire operators which could command bet- ter commercial terms than in the past.
• Aggregators will be a vital source of business for cab operators. No fleet can assume that all their existing consumer and business accounts will react to the easing of the lockdown in the same way, or that bookings from each account will bounce back at the same pace. So aggregators (of which mini- cabit is Britain’s largest) should be a core part of a cab provider’s mix of channels, just as travel operators have long leaned on aggregators such as
booking.com, Expedia and Skyscanner.
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The competitive landscape will change. For instance, in London, Kapten’s ride hailing app with private hire drivers is being folded into sister company Free Now’s app for hackney carriage drivers; kabbee has closed during the pandemic. Uber, Ola and Bolt will curb their expansion plans as they need to conserve cash – given that they have common shareholders, consolidation between them in some geographical areas is not unthinkable.
On this point, the need for cab opera- tors and drivers to highlight to customers how they’re adopting anti- Covid protections will be crucial. Whether this is achieved by wearing masks, offering a hand sanitiser in place of the traditional bottle of water or even installing a protective divider between the driver and backseat pas- senger, a best practice will emerge.
• Above all, perhaps one positive out- come from the lockdown has been the environmental impact…well actually the lack of it! City centre citizens around the world are now reporting bluer skies as a result of less smog from polluting planes, trains and auto- mobiles. There are consequently now murmurings of greater pedestrianisa- tion of city centres and a faster shift to electric vehicles. Whilst the pandemic has prompted some councils around the UK to inevitably delay the launch of Clean Air Zones to next year, invest- ing in electric vehicle cabs now still makes sense as ‘ethical travel’ emerges as a consumer trend. It’s why minicabit is highlighting electric vehicle cab fleets prominently in its core booking flow.
My crystal ball needs wiping down now so my gazing is on pause. The one thing that is foreseeable is that getting around will always be a core human need, so no amount of Zoom video calls or Netflix movies will substitute that forever.
Onwards and upwards!
Amer Hasan is CEO of minicabit, Britain’s largest cab aggregator
minicabit.com MAY 2020
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