There are many reasons why a ride-hailing business might fail to meet its goals or be a disappointment. However, the two most common are poor organization and flawed brand marketing. This is crucial in a market that is becoming increasingly competitive as it has grown in popularity.
The transportation business niche began to expand globally after the pandemic. We know that there are now major brands like Uber, Lyft, and Cabify, among others. These have served as both role models for emerging businesses and a challenge, given their extensive global reach. This shouldn't intimidate beginners, so we have the following suggestions for you.
Market competitiveness
To begin, let's clarify a few points. The market is growing, and we know that some companies control between 40% and 75% of the transportation market. Doing the math, we can conclude that between one and three leading companies share the market share. These companies have already established certain service standards, which have allowed them to reach sophisticated customers who demand a high level of quality.
However overwhelming the competition may seem, studies show there's always room for new businesses. There are sectors that haven't been explored, and because cities and countries are so vast, there's always an opening. That's why market research is essential when starting a business—to identify the best area for your service and how to operate there.
Tips for getting started in ride-hailing
There are two main strategies that can help you survive the wave of competitors. While building a solid, profitable business, and above all, providing excellent customer service, it's crucial to understand that the only way to stay afloat is by having all of the above covered.
-
Keep an eye on specialized market segments; these are often overlooked by large ride-hailing companies. Focusing on specific regions or cities, in addition to reducing advertising costs, will help lessen the effort required to compete.
-
Identify a niche or area with high competition to facilitate your rise to the top. Look for something that might attract fewer customers but offers unique features that others don't. It doesn't matter if you start small; there's no better advertising than satisfied customers spreading the word.
We'll give you some examples to help you better understand the two points above. If you're looking to target an area with lots of families and schools, focus on a specific service for transporting children. On the other hand, if you're located in a commercial and industrial area, offer companies the opportunity to partner with you to transport their employees.
What happens to unstable markets?
Let's start by defining this term. It's typically used to refer to a situation where no single company holds at least a 26% market share. With the arrival of Uber, customers began to get used to ride-hailing apps and, as a result, demand much more. This type of market exists because there are many taxi companies but no clear leader.
To combat this, however cliché it may sound, you have to strive for a unique vision. The success of ride-hailing will depend directly on whether or not what differentiates the company is related to the customer's needs. For example, it's pointless to want to stand out with a children's service if you operate in a residential area with many university students.
Key strategies for reaching the top
As we mentioned, no matter how challenging the market may seem, there will always be a part of the city that isn't covered. Or, even if there's a popular company already established in the area, it might not be concerned with meeting all of its customers' needs. That said, we have some strategies that have worked for other taxi services and that might be helpful.
Be aware of your surroundings
Before entering the competition, it's important to gather information about the competitors. This will allow you to create a solid competitive landscape and develop tailored strategies. This step is crucial for achieving your objectives and ensuring your processes are effective and deliver optimal results.
Identify competitors' capabilities
It's not enough to simply observe the areas covered by the competition; you also need to map their functional capabilities. This means having at least an understanding of their technological maturity, processes, and standardized work procedures. Incidentally, it's also worthwhile to know the reality of both their strengths and weaknesses.
Focus on your own technology
Now that the traditional transportation system has been abandoned, no one can afford to ignore technology. As we mentioned, customers are looking for user-friendly apps to make reservations, as well as diverse payment methods that allow them to pay using their devices without needing to carry cash.
When choosing an app, there are essential features that shouldn't be overlooked, all of which ToolRides provides. One of these is the ability to communicate with the customer or driver. Another is the ease of making real-time or advance bookings. GPS navigation is vital, both for route planning and for enhancing customer safety.
Achieving the right positioning
We hope this information helps you stand out among your ride-hailing. At ToolRides, in addition to offering customized taxi and delivery software, we provide consulting services for these young businesses. We can help you with this type of tool that has emerged with the digitization of processes.
