The taxi business is a transport service industry that has taken a long time since its conception to experience significant changes. In fact, according to Morris, the business is older than automobiles, but has taken more than a century to experience significant changes (1). The internet and mobile phones are increasingly used as tools to open up opportunities for the reform in the industry. Through the applications, disruptive approaches are used in the provision of on-demand individual transportation. Varieties of ideas on disruptive services have emerged, but the general idea is the use of mobile phones and web services by both the drivers and customers. The drivers are professionals, and they are paid in various ways depending on the platform adopted by the companies.
Social networking, reputation systems, and GPS tracking systems are highly applied in providing the services. The companies offering the disruptive on demand transport services appear to be taxi services providing entities, but the distinction arises because they offer services to both the customers and drivers. The new apps are considered a threat to the existence of the traditional hire transportation business. Analyzing the pros and cons of the three companies including SideCar, Uber, and Lyft, regarding can assist in facilitating a better understanding of the new approach in the transport services industry.
Side Car is a business-to-business (B2B) on-demand service delivery in transport, which connect both the drivers and riders. The company provides three services, which include Ride app (connecting riders and drivers), Shared Rides (instant carpooling app), and Sidecar Deliveries app. The latter combines people and packages moving on the same route for fast, affordable, and innovative delivery solutions (Side Car 1a). The company was founded in 2012 and provides the services in eight U.S. markets.
The advantage of the company and its apps is that it receives support from the top-tier investors. Some of the Ventures include Union Square, Avalon, Google, and Richard Branson (Side Car 1a). The support of such investors has two implications. First, Side Car is a stable company because such investors are not likely to capitalize in a failing venture. Secondly, the company is likely to have financial stability due to the support of the key investors.
The second advantage of the company is its insurance and guarantee policy. The cover is limited for up to $ 1, 000, 000 from the time the driver accepts a ride and it ends when the ride is complete, or when the driver completes the transaction (Side Car 1b). This is a considerate automobile liability insurance cover, which is designed to cover the drivers against body injuries and third parties’ damaged properties.
The third advantage of SideCar is the strong safety features apart from the third party insurance cover. The first safety measure is the consideration of the criminals and driving accounts. The records are backed by checks by a third party to ensure that drivers involved in the service provision are not a threat to the safety of the riders. The second measure is the GPS trailing that operates from starting point to the end. The tracking assists in monitoring the movement of the vehicles on a real-time basis, a situation that facilitates quick response in case of an emergency. The other safety measure is the zero tolerance for drug and alcohol (Side Car 1b). Both the drivers and riders are prohibited from consuming alcohol or drugs during and before the ride. The cashless payment system through the app is a safety measure from both the drivers and the company. The enterprise is in a position to control its revenue while the drivers are at reduced risk of robbery because they do not carry a huge amount of cash for the services offered. The customer support is highly upheld, which implies that in the case of distress, the company makes an immediate response to rescue the situation.
Lastly, the Side Car Company has the advantage in term of the variety of the services offered. Sidecar as an application tool assists the riders in identifying the drivers who are ready to provide the transport services. The pool of drivers in the services gives the rider the opportunity to select the driver depending on the type of the service, convenience, and the cost. Secondly, Shared Rides and Sidecar Deliveries are considered innovative and cost effective services because of the shared cost among the riders. The two service categories are, therefore, economical for the customers and save fuel saving for the drivers.
On the other hand, Side Car services and approaches in service delivery have three identified disadvantages or weaknesses. First, the application of the insurance cover offered limits the application of personal insurance cover on collision or comprehensive damage to the vehicle when a driver logged into the app. The second disadvantage is that the company depends on vehicles from other parties, making it hard to control the supply of the services. The drivers are free to either use the app or use the vehicle from other services. The third disadvantage is the limited coverage of the market in the United States. With the operations in only eight cities, it implies that its customers moving to other cities will have to use services and apps from other service providers.
Uber Technologies Inc
Uber Technologies Inc. commonly known as Uber is an American transport network entity providing app services in the international market. It serves a wide market in 25 North American cities and is in about 18 counties. The company uses the Uber mobile app that allows the consumers using a Smartphone to request trip services, which are then matched to the available Uber drivers for service and quick delivery. The drivers make use of their cars because Uber does not have its fleet.
The first advantage of the Uber mobile app is that it allows the customers to estimate the cost of their trip before making a request. The customer enters the current location and the destination and after taping the fare quote, the expected cost is automatically calculated (Uber 1a). The cost is usually based on the expected time and distance. The app is considered convenient and friendly to the riders. Indeed, the customers can make decisions on whether to take up the ride or not depending on their financial ability.
The second advantage of the Uber mobile app is in its commitment to safety. The company has strict safety measures and provides end-to-end insurance coverage. The first measure is the background check where the drivers providing ridesharing and delivery services are screened in the county, federal, and multistate criminals platforms (Uber 1b). In addition, Uber has a code of conduct for the drivers and riders to enhance shared respect, accountability, and courtesy. Lastly, the fares for the riders are calculated based on distance and time taken and charged on their credit cards. The cashless system enhances the safety of the drivers and riders since one does not have to carry the cash.
The third advantage is the ease at which an individual can become a driver. A potential driver undergoes three steps, including getting started, getting the app, and starting the service delivery. In the first step, the applicant provides details about themselves and necessary documents to drive. Upon the approval, the applicant is notified and given a phone with the Uber app (Uber 1c). Finally, the driver is allowed to start by setting an own schedule.
Despite the pros identified, there are two disadvantages of the Uber mobile app. First, the company does not have its fleet and; hence, may not control the fleet size at all time. The disadvantage intensifies because the drivers are free to make their schedule in terms of time, location, and days to work. Secondly, the payment in Uber is restricted to registered credit cards for safety measures, which implies that customers using other means of payments are left out from enjoying the services. The restriction limits the market coverage and the customer.
This is a private American transportation network service providing company in San Francisco. It provides the connection services between the drivers and the riders. Its operations are spread in about 65 U.S. cities while there are intentions to expand into foreign markets. The company uses the Lyft app, which is a mobile phone application tool to facilitate three categories of services including Lyft, Lyft Plus, and Lyft line (Lyft 1a). Lyft is the pioneer service offered; it is a personal ride involving an individual and up to three friends or family members. The service is available nationwide. Lyft plus is a shared ride of six passengers, which is appropriate for individuals intending to ride together. Lyft line is also a shared ride where passengers going the same direction share the ride and benefit from reduced prices. The three service categories offered by the company is considered as the first advantage that the application of Lyft app offers to its customers.
The second advantage of Lyft is the comprehensive and reliable safety measures. The company provides an insurance of up to $ 1 million, which covers the drivers from the time he/she logs in a driving mode until all the passengers reach their destination (Lyft 1b). Secondly, before allowing a driver to participate in the system, they are subjected to checks on their suitability, which is done by third parties on behalf of the organization. In addition, their vehicles are subjected to 19-point inspection process to ensure that their quality and safety features are efficient and up to the required standards. The other safety strategies include zero-tolerance to drug and alcohol among the customers and drivers. In this aspect, drivers are not allowed to consume alcohol before and during the ride.
The other advantage is about the payment system applied. Lyft only accept a phone based fee for fast and secure payments. The riders do not to carry liquid cash while the driver is, therefore, not allowed to accumulate huge amounts of cash (Lyft 1c). The payments are made directly to Lyft from where the driver’s share is remitted to their bank accounts. The system reduces the threat of robbery because there no cash transaction that takes place, or involved in the service.
Conversely, Lyft apps and services are considered to have limitation due to two fundamental aspects. First, the dependent on the mobile payment system could be a significant limitation. In fact, it is worth noting that some customers do not have the required mobile money payment platforms. Therefore, they would seek services from other transport providers, which support the cash payment procedures. Secondly, the customers are required to pay at their destination. This means that they are charged after they arrive at their terminus or the mileage indicated on the car determines their amount. In fact, the approach may get the riders with a surprise if the cost is high. Therefore, this may not be a convenient way of cost estimation.
As evident from the above discussion, the mobile and internet apps applied by companies such as SideCar, Uber, and Lyft are revolutionizing the transportation industry, particularly the taxi services. The apps are the platforms upon which the connected drivers and riders are matched to assist in the provision of convenient and flexible services. The applications are advantageous to both the drivers and the riders due to safety measures applied, which are considered effective than when operating under the traditional taxi system. The payment methods used, the strict inspections and driver screening measures are valuable aspects exhibited by the three companies. However, the absence of fleet and the freedom of drivers to make their schedules are common challenges identified in the three businesses.