How Much Does It Cost to Develop a Taxi Booking App? A Beginners’ Guide

It has been several years since taxi booking apps have forayed and their popularity is massively mushrooming. Conventional taxi service providers couldn’t agree more their market is diminishing.

Cab refusal, overcharging and nuisance were just some of the problems addressed by on-demand taxi apps like Uber. And from this day forward, there rolled out a train of taxi apps meeting the budding passenger’s needs.

Of many reading this blog to reckon the taxi app development cost let us make it clear the cost has its total dependency on the feature set and third-party integrations. And before developing an app like Uber, one needs a deep understanding of its business & revenue model, technical considerations and competitors as well. So, let’s explore in detail the diverse taxi app development essentials.

Business Model of Taxi Booking App

There are three major types of business model of taxi app-

• Aggregator model
• Ownership model
• Revenue Generation Model

Aggregator Model

Under this business model, the cab aggregators partner with cab operators to provide rides on request. The aggregator receives a commission from operators on each ride that occurs and apart from this, the cab operator also pays a fee for leveraging the conveniences of the technology platform. Popular taxi-hailing companies like Uber, Gett, Ola works on the same model.

Ownership model

This model works best for taxi fleet owner-operators. Riders can book the taxi from their taxi booking app by entering the pick-up and drop-off location and enjoy the ride as the taxi operator arrives and take them to the destination. This model does not have any middlemen like Uber. The taxi operator is only liable for paying drivers and other operational costs like fuel, maintenance charges of cabs and technology platforms.

Revenue Generation Model

Other than the two models discussed above, the additional source of revenues that can be taken into consideration by app development companies are:

• Surge pricing at peak demand
• Different prices for the range of car models
• Extra service charge for chauffeurs and premium cars
• Costs for extra luggage on the trip
• Charging a certain rate on per mile basis
• Imposing charges on waiting time of the driver

Core Technologies Used

• SMS Adaptor - Cloud communication providers like Twilio, Nexmo, Plivo, Sinch
• Push Notifications - Google Cloud Messaging (GCM) and Apple Push Notification Service
• Payment - Braintree, Stripe, Paypal
• Email - Mandrill, SendGrid
• Analytics - Google Analytics
• Geo Location (Navigation) - Google Maps, Mapkit
• Device Location - CoreLocation framework, Google’s Location APIs
• Cloud - Amazon S3, Amazon Cloudfront

Competitor Analysis & Risk Factors

• Lyft - Lyft was founded in 2012 in San Francisco, California. Like Uber, Lyft also operates in the Application Software space. It offers its services in areas nationwide and in roughly 220 cities, which includes Vietnam, The Philippines, Thailand, Singapore, Malaysia, and Indonesia.
• Gett - Launched in London 2011, GetTaxi an Israeli on-demand mobility company is backed by Volkswagen and currently operates in more than 100 cities across the United States, the United Kingdom, Russia and Israel.
• Grab - Founded in 2011, Grab is famous for offering its services in the Philippines, Indonesia, Vietnam, Thailand, Singapore, and Malaysia. They aim to make the taxi industry a safe and efficient transport medium.
• Ola - Initiated in 2010 in Mumbai as an online cab aggregator, Ola has an extensive network that spreads across India, Australia, New Zealand, UK (169 cities) and with over 100,000 cars. Ola is famous for offering a diverse range of cab services through its mobile application.
• Didi - DiDi was founded in 2012, and its headquarters is in Beijing, Beijing Municipality. Like Uber, DiDi also works within the Application Software sector and is known in the Chinese market. It has confirmed its partnership with Lyft, Ola, Bolt, and Grab to expand its global footprint in Australia, Mexico, Japan and Brazil.
• Bolt (Taxify) - Headquartered in Tallinn, Estonia, Bolt operates in 34 countries and more than 150 cities. Bolt is hailed for offering the best commission to drivers and reasonable charges to its customers allowing it to earn over plentiful passengers and drivers.

Related Reading: Top Ridesharing Apps Worldwide and Lessons to Be Learned

Revenue Model of Taxi Booking App

• Dynamic Pricing - When the demand for taxi is higher than the availability like on bad weather days, strikes, traffic congestion, peak hours and public holidays, taxi aggregators can apply the dynamic pricing strategy by multiplying the cost per mile.
• In-app Advertisements - In-app advertisements like video ads, banner ads, and interstitial ads can be another effective monetization strategy to earn money through app.
• Promotional partnerships - By making partnerships with brands looking for marketing strategies can prove to be a win-win situation for both the parties. Such type of collaborations give a huge audience base to the brands and owners can earn money through it.
• Premium Rides - Besides running the ordinary cabs, app owners can also give the option of premium rides and include luxury sedans, SUVs in their fleet and charge extra for the amenity. Like Uber gives a premium segment of UberBLACK, UberSUV, UberLUX and so on.
• Commission - The commissions earned on each taxi ride the passenger books comes as a direct source of income for taxi aggregators. Like for e.g. Uber charges for a ride per km and the time spent and earns the commission on every kilometer.

The Total Cost to Develop a Taxi Booking App

The total cost of taxi app development depends on the following factors :

• App Platform- Do you want to develop the app on the iOS platform or Android or both? The cost varies platform wise.
• App Design - The user interface and user experience is the essence of any app that grabs users’ attention and keep them glued. So, you should not compromise with the design for saving some bucks and hire the best UI/UX development company after checking their portfolio.
• App Development - The development cost of a taxi booking app depends on the geographic location of the mobile app Development Company you’ve hired. Though the companies have different hourly rates, still app development market in India is relatively cheaper than that of the US market.
• Third-Party Integrations - Apart from the development of features and functionalities in the Customer App, Driver App and Dispatch panel, if you go for any third party integrations it will add to the cost more as its development is time-consuming and require extra efforts.

Still, if you want a ballpark figure for taxi app development or taxi dispatch software it may range from $20,000- $30,000 USD (Cost is subjected to change country-wise).