Guide on Taxi App Development: Everything You Should Know
Taxi app development makes great sense for existing businesses, startups, and even enterprises for their workforce mobility and convenience.
Don’t you agree that taxi applications have begun to surpass traditional taxi services? People have started to shift from personally-owned transportation modes toward mobility solutions as a service (MaaS).
To support this fact, it should be pointed out that apps like Uber and Lyft completed almost 35 million more rides than standard taxis in NY in 2017. Aside from that, Statista predicts that the annual growth of the global ride-hailing service market will reach $126,521 million by 2025.
In view of this taxi booking app popularity, we intend to tell you how taxi app development is done. Read this guide all the way through and you will know all the required ins and outs.
Once you have read this article, you will know the answers to the following questions:
- What are the top taxi-hailing apps?
- What functionality is used to create a taxi app?
- What are the steps involved in taxi app development?
- How much do you need to invest in a taxi application?
- How to choose suitable and reliable taxi app developers
Best Examples that Taxi App Developers Should Consider
For starters, let’s examine how the best taxi apps were started and what their unique features are.
This ride-hailing company’s history actually began with UberCab, which was launched back in 2009 by Garrett Camp. These days, Uber is available in 630 cities and continues to expand to new locations. One of the ways this expansion is occurring is via the acquisition of similar services. In 2019, Uber purchased Careem, a taxi booking app operating in the Middle East, for $3.1 billion.
The service has a range of categories to suit every user need and price range. These include UberPool, UberX, UberGo, UberBlack, and more.
Uber continues to find other market opportunities. Recently, the company has started to experiment with parcel and food delivery. This includes UberFresh (not to be confused with UberEATS) for food delivery in Beverly Hills.
Uber has evolved over the long term and the costs spent to create Uber are hard to define. NextWeb mentions that based on Uber’s early funding rounds, the cost of an app like Uber, consisting of a taxi driver app and a passenger app, will be around $1M - $1.5M.
The investment in Uber taxi app development was quite substantial. The initial contributions accounted for a several million dollars from 9 investors. Just imagine that, within the past nine years, Uber Technologies has raised more than $22B in funds for its taxi booking app development.
The Lyft app was launched soon after Uber in 2012. In the beginning, it was operating under the name Zimride, which is a ridesharing service for long distances that connects drivers and passengers via Facebook.
These days, the Lyft taxi booking app is considered a direct competitor of Uber with a presence in 200+ cities in the US market. Lyft’s unique characteristic is its rating system and the fact that they only keep drivers with the best ratings. As well, the Lyft taxi application has liability insurance of $1 million. Aside from that, Lyft is considered to be cheaper than Uber; you can expect to pay around $12, compared to $16 for Uber.
Curb is another US-based taxi booking app with a pool of more than 50,000 taxis and a few hired cars across 65 US cities. Passengers can choose from three options during the ride-booking process, namely “ride now,” “ride later,” and “pair and pay.”
The main difference with the Curb app is that the service does not have the controversial surge pricing for which Uber has been criticized. Surge pricing means that the price is adjusted in relation to the demand at a given time. Hence, the Curb ride fare is lower and the taxi app offers a more sustainable service. Passengers are also charged $1.95 commission on top of the price for their ride.
Grab is a well-loved taxi booking app operating in Southeast Asia, particularly in countries like Singapore, the Philippines, Malaysia, Indonesia, Thailand, and Vietnam. This taxi mobile app provides a range of ride options and payment possibilities (a card, cash, Grab credits). The passenger can choose from GrabTaxi, GrabShare, GrabHitch, GrabBike, or GrabFamily as their mobility service. On average, the user can expect to pay $5 per ride.
DiDi taxi-hailing app is available mostly in China, across over 400 cities, and serves 550 million users. The company offers services such as Express, Premier, Luxe, Bus, Designated Driving, Enterprise Solutions, Bike Sharing, E-bike Sharing, as well as car rental and food delivery.
This taxi booking app operates in 100+ cities in the US and Europe. The competitive advantages of the Gett app are the ability to book your ride two weeks in advance and the provision of 24/7 passenger support.
The Gett app does not have surge pricing and only charges a 10% commission fee for each ride. It is known that Volkswagen Group invested $300 million to launch the service in the European market.
Most of the above-mentioned taxi app solutions operate in a similar way. The procedure works as follows:
- The passenger requests a ride by entering the corresponding details about the trip (e.g. pick-up and drop-off locations)
- The trip fare is calculated up front based on a set of attributes from the system’s back end
- The passenger confirms trip details and accepts the cost of the ride
- The passenger is matched with a nearby driver
- The driver receives an alert about the ride
- The driver checks the trip details and accepts or rejects them
- The driver meets the passenger and brings them to the destination point
- Payment for the service is made automatically via a connected credit card or by cash
- Once the trip is completed, the system prompts the driver and passenger to rate each other
Continue reading to find out what it is necessary to complete in order to create a taxi app wisely.
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Detailed Process of Taxi App Development
In general, the taxi app development process can be separated into four well-defined steps. Let’s review each of them in detail.
Step 1: Identify Your Goals in Building a Taxi Booking App
First and foremost, define what taxi booking app you want to offer the market. Taxi app development can imply not only building an Uber-like application, but also a service for transportation, namely:
- a carpooling app
- a car rental service
- a shuttle service app
- bus booking
- trucking & logistic solutions
- bike sharing
- an on-demand delivery app
- an employee transportation app
- niche taxi services (e.g. car services for children, premium electric taxis, ridesharing service for women)
These taxi app solutions can be built both for existing businesses like local taxi services, as well as for distinct startups.
BTW: Recently Uber has made its API public, meaning you can connect to its software and extend the functionality of your current business. It is possible to start with on-demand taxi app development and offer the delivery option, especially if you are a small local retailer, restaurant, or a bar.
Step 2: Understand the Market Situation
Once you finalize your app concept for the future taxi app development, it is necessary to consider the market and the macro environment where the app will be launched.
Note that the biggest contributor to the usage of mobility solutions is China, which is closely followed by the USA. This means that the competition is harsh in these countries.
Completing a competitor analysis allows you to understand what other services are offered on the market. This analysis can be used to define your USP (unique selling proposition) before beginning the taxi app development process.
Next, in addition to the analysis, it makes sense to conduct a few polls among your target audience and directly ask what experience they need and what features they want to see in a taxi app.
Outcome of Step 2: Business Model Canvas
A business model canvas is a tool that is useful for planning a taxi-hailing app business (or any other business) and that can be further used in taxi app development. This tool has nine areas that analyze your customers, value proposition and activities, revenue, resources, and costs. Below, you can check out an example of planning a taxi application service similar to Uber.
Also note that, based on this analysis, it is necessary for you to determine the scope of work for the taxi app development process. You should plan what your fully-featured product will look like and decide what functionality will be included in its first version (if you choose to develop your app version by version).
Step 3: Find Proper Taxi App Developers to Build a Solid Product
This is one of the most important steps directly related to taxi app development. It is important to find reliable and highly capable taxi app developers. This should be a development team that sustains great communication throughout the entire process and delivers a product that is of great quality.
Recommendation: One of the main factors influencing the taxi app development cost is the hourly rate of specialists. The region of Eastern Europe is well-known for affordable development rates and an abundance of highly professional teams. Among the top offshore software outsourcing regions are Ukraine, Poland, and Slovakia. For instance, an average hourly rate for taxi app developers in Ukraine is $40. A very beneficial fact in this situation is that there will be no difference in the quality if you choose an experienced offshore team.
Interested in knowing how it is possible to outsource taxi app development successfully?
Read our guide: The Right Way to Outsource a Project.
This guide explains the step-by-step process of this procedure and key locations with rates for development outsourcing.
Step 4: Cover Challenges in Taxi App Development
Like in any other business, there are a dozen challenges in regards to taxi app development. They include, but are not limited to:
- Safety concerns
This is the key priority for taxi application development. There have been some instances with people being harassed and even killed (there were a few incidents while using the DiDi carpooling service, Hitch, in China). It is highly important that you make your service safe both for the taxi driver and the passenger.
This issue may have a couple of solutions, namely:
- Very detailed driver background checks
- Particular vehicle requirements
- An emergency call button in taxi apps
- Severe competition
It makes no sense to compete with giants such as Uber or Lyft; rather, you should instead determine your niche for taxi app development. Selecting a target client increases your chances for success significantly. For instance, Shebah is an Australia-based taxi booking app with female drivers only. Consider differentiating your app from other services.
- Two sides of the same coin
It is worth mentioning that a taxi application is a subcategory of the marketplace platform with a supply-demand correlation. The platform has two user-roles with different wants and needs. The issue lies in attracting both groups since, if there are no drivers, there is no taxi booking app.
The solution is to reach out to professional drivers with an offer of guaranteed payments in the beginning. The passengers can be attracted by free rides or other bonuses derived from a well-defined marketing and promotion strategy.
The issue with localization arises with regard to expansion into other markets with other languages, currencies, and unique market needs. In some cases, it may be necessary to redevelop the app, change its interface, or add new functionality.
To summarize, the flow of starting a new taxi app business is as follows:
- Define the exact target audience
- Identify the purpose of the app
- Develop a business plan for the project (including revenue streams)
- Create effective app content and organize the data
- Plan the budget for taxi app development and marketing expenses
- Apply for investments, if needed
- Design and implement a product with a team of professional taxi app developers
Features & Tech Stack for Taxi App Development
For starters, building a native app is the recommended approach to use in taxi app development. This allows for the creation of a custom app for each operating system and ensures better performance, speed, security, and the ability to get access to the built-in smartphone capabilities like geolocation and maps.
A typical taxi app solution consists of three distinct but interconnected parts - a driver app, a passenger app, and an admin panel for management of business operations.
The core features involved in taxi app development are as follows:
|Passenger App Features||Driver App Features||Admin Panel Functionality|
|Profile||Driver profile and status||Locations and fare management|
|Taxi booking||Trip alerts and information||Driver and passenger management|
|Fare calculation||Receive and track earnings||Booking management|
|Driver tracking||Navigation and route optimization||Vehicle management|
|Payment||Driver delivery reports||Review driver’s orders and payoffs|
|Push notifications||Push notifications||Check ratings and reviews|
|Driver rating and review||Passenger rating and review||System content management and FAQ|
|Travel history||Booking cancelation||Driver and user support|
|Customer support (SOS button)||Integration with Google Analytics|
It is also possible to include some advanced functionality in taxi app development or to consider some features in the subsequent app versions to enhance user experience:
|Passenger App Features||Driver App Features||Admin Panel Functionality|
|Pickup location||Driver destinations||Manage dispatchers|
|Ride cancellation||Quest earnings||Dispatcher panel|
|Split payment||Waiting time||Manage refunds|
|Interactive map||Heat maps||Promotion and discount management|
|Future ride||Forward dispatch||SMS alert settings for specific trips|
|Book for someone else||Future ride settings|
|Favorite locations||Country and currency settings|
|Gamification, discounts, referral rewards||Heat map|
|Voice recognition||Surge pricing|
|Waiting list||Flat pricing|
|Hidden passenger phone number|
Interested in knowing more details regarding the functionality of taxi applications?
Our team has prepared a complete guide devoted to building an app like Uber. Check it out for a description of the tech stack and features, app monetization possibilities, and an approximate development budget: How to Make an App Like Uber: Complete Guide.
Stages & Costs to Create a Taxi App
Before we proceed with the taxi app development cost, it is necessary to understand how the app software is created. Essentially, the process is divided into a few global phases, namely:
- Pre-development (also called discovery or research)
- Development (includes testing and deployment processes)
- Ongoing development and support
- Marketing and promotion
The discovery stage starts with planning in order to complete the project successfully. A business analyst and software architect align the business requirements with the technical implementation and create a product backlog. This document lists all the features within the particular taxi app development in detail. Then, a designer creates the user experience and interface of the application.
The deliverables of the discovery stage are as follows:
- Finalized app concept
- Product backlog
- Project architecture plan
- Product design (UX & UI, clickable prototype)
- Market and competitor analysis (optional)
On average, the cost of this inception stage ranges from $10,000 to $15,000 with a timeline of 2-4 weeks in relation to the average time required for the first app version which is 3-5 months.
Once these deliverables are ready, it is possible to estimate the taxi app development cost and timeline more precisely. This is due to the fact that in the early stages, the taxi software development process has a high level of uncertainty and lots of influencing factors like type of taxi app developers, hourly rates, app complexity, the number of features, and more.
Want to learn all the aspects of precise software pricing formation?
Discover this information about app cost components, breakdown, and maintenance in this detailed guide: How Much Does it Cost to Make an App?
In terms of taxi app development cost, our estimation of apps like Uber for a basic first working version consisting of a passenger app, a driver app, and an admin panel ranges from $70,000 to $80,000 per platform (iOS or Android) at an hourly rate of $40 (average development rate in Ukraine). The timeline to develop such a project is approximately from 5 to 7+ months.
If you are interested in taxi app development of a fully-featured product, the price can increase to $200,000+ per platform. A study conducted by Clutch indicates that the cost of complex solutions, including taxi app development, ranges from $200,000 to $500,000.
If you have thought extensively about starting your digital business with a taxi booking app or any other idea, you must know that development is not everything. To achieve the desired goals, aside from the cost spent on taxi app development, it is necessary to allocate some of the budget to marketing campaigns and product promotion activities.
These can include the following actions:
- Engaging with SMM
- Getting press attention
- Reaching out to influencers and bloggers
- Developing a landing page
- Posting on PreApps
- Considering alternative app stores
- Getting involved with SEO
- Considering promotion at related events and fairs
The image below lists the services and processes included in each of the stages of taxi app development that influence the final cost.
Interested in receiving an all-in-one guide about successful taxi software development?
Check out the article: How to Make Your App Successful. A Detailed Step-by-Step Guide. This is a 10-step manual with lots of valuable recommendations for each step of the digital product development.
Taxi App Development: Final Word
Do not forget to consider the future of the taxi-hailing service. As mentioned, the world is adopting cheaper and more convenient solutions for mobility and transportation. It is certain that Blockchain technology will find some application in taxi app development to ensure better driver screening and more.
Another innovation lies in autonomous vehicles, which exclude the driver, lower the operating cost, and resolve any issues with parking spaces. These self-driving vehicles are already in the development pipeline of Tesla Inc. and General Motors via a partnership with Lyft.
To conclude, taxi app development requires significant investment both monetarily and time-wise. An important point here is to find capable and reliable taxi app developers. A software development team that is supportive and thinks ahead technologically should definitely be your choice.
Interested in setting up a successful taxi booking app business?
Our team can assist you throughout the whole process: from the initial app concept discussion to app launch and further project support.