April 9, 2019 Geography

I. Introduction
Taxify is an international transportation network company founded by Markus Villig in 2013,in 2017 it was launched its services in Australia Sydney,Melbourne.The company develops and operates the Taxify mobile application ,which allows people to request a taxi or private driver from their smartphone.Taxify operates in 25 countries and 40 cities Europe,Africa,westAsia and Central America.The company has 10 million customers globally and more than 50000 drivers use the platform to offer rides.
II. Business model
Taxify operates their app,which enables people to hail rides from their smartphones.Taxify’s applicaton is availabe for Android,IOSand windows phone.
The riders must choose apayment method:cash,credit card or mobile carrier billing before they can use the service.The customer requests a ride and confirms their pick up location.Once the driver accepts the trip,the customer will be able to see the driver’s name and car details.Ater the ride is completed both driver and the rider can rate each other.
Taxify was the first transpotation app in the world to allow customers to pay their trips via mobile carrier billing.
A. Building blocks
The foolwing are the nine building blocks approach details Taxify’s business model (see Appendix 1 – Taxify Business Model Canvas).
1. Customer segments
As a multi-sided platform business, Taxify will benefit from segmenting both sides the customers (i.e. riders) as well as the drivers Taxify will use a combination of classic market segmentation combined with highly-targeted micro segmentation (Data Services Inc, 2015)
These are some ideas how Taxify do segment their customers and their supply side (drivers) meaningfully.
1. Driver segmentation:
• Demographic: age, socio-economic status, family status, nationality
• Geographic: by city, suburb
• Geo-demographic: see above example
• Behavioural: preferred work hours ; patterns
• Check here how a consultancy segmented Taxify drivers pdf (but note that Taxify does not have this data about all their drivers)
2. Customer segmentation:
• Micro-Geography: home, work, typical locations (the Taxify app will track your location even if it’s off unless you change the default settings)
• By usage patterns: regular, infrequent, etc

2. Key partners
Taxify has three type of key partners;
• Firstly, the drivers; The drivers are the supply side and help deliver the value proposirion to the end customers.
• Secondly,the technology partners; Technology partners do the same: helpcreate a unique value proposition and remove friction between the riders and the drivers
• Thirdly, Investors and other supporters,such as lobbyist, they help navigate the rough waters of becoming an establised company in the sharing economy.
Other partners that are important but not necessarily key partners:
? Other technology and infrastructure providers
? Maps
? Payment
? Cloud storage
? Data analytics
? Financing partners/banks (car loans for drivers)
? Hire car partners (Taxify-ready vehicles)
? Insurances
Sydney is one of the most vibrant and exciting cities in the world. From the iconic Sydney Opera House to the scenic Eastern Sydney beaches. No matter where you are, count on Taxify to get you a ride within minutes.
Melbourne being dynamic, yet cosmopolitan, is regularly named one of the most liveable cities in the world. Wherever you are, from the shores of Geelong to the bustling port of Melbourne, count on Taxify to get you a ride within minutes.

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3. Value proposition
Taxify is a multi-sided platform and as such it has to have a value proposition to both sides, the passengers as well as the drivers. For riders, the value proposition are that it is the best way to get around, to be able to call ar de with one tap 24/7 and track the driver arriving. For drivers, it’s the opportunity to earn, the freedom of choosing their work hours and the ease of getting started. All position fall into what economist call reduction of search costs and transaction costs which is the predominant feature of multi-sided platforms.

4. Key activities
Positive indirect network effects are the key ingredient of platform businesses to achieving competitive advantage. The key activities should revolve around enhancing positive indirect network effects and reducing negative ones.
• Remove friction from all interactions
• Scale driver and customer side to reduce idle times for drivers and waiting times for customers
• Reduce negative externalises, e.g. bad behaviours on both sides
• Grow the platform by getting more participants joining
• Keep participants engaged and stimulate ongoing participation
• Continue improving the value proposition, e.g. cheaper rides for regular commuters through Taxify
• Look out for complementary value propositions (e.g. car financing, new customer segments, etc)
• Deliver on the customer proposition
• Reduce churn (esp drivers)
• Expand to more cities (US and global)
• Analyse the data to fine-tune everything
• Enhance technological lead and intellectual property to steepen barriers of entry
5. Channels
Channels for the initial awareness and customer acquisition are as follows:
• Campaigns:free vouchers when Taxify enters a new cities for example headed out of public transport stations
• Free media coverage based on the novelty factor{new-joiners have often soared even after extensive negative coverage}
• Word of mouth
• Socail media, people sharing
• Digital ad campaigns
• App stores i.e IOS, Android and windows through high ratings being featured.
6. Revenue streams
Depite all the setback Taxify repoerted strong revenues in 2017:
Values of all fares:almost $20 billion at a growth rate of 126% from the previous financial year.As mentioned above,this is not their revenue.They show their Q3 and Q4 revenues below.
A 28% growth in revues in Q4 2016
And a stgering net loss of $991m in Q4 2016 excluding the losses in china.

Graph 1 : Taxify Revenue Growth Ouplaces Losses
Still losses are historic, reaching $991 million in the forth quarter of 2016

7. Cost structure
In many online platforms,the biggest cost element are customers acquisition costs {CAC}. This is not different for Taxify and its competitors uber and DIdi.Taxify has fought along bitter war with Didi in china to win on the biggest market in the world and mostly in Australia.The weapon of choice were customer acquisition subsidies on both sides the driver and the rider.
Taxify cost elements are:
• Cost of customer acquisition CAC:free vouchers,one-off subsidies,digital advertising,ect.
• Weighted average cost of capital WACC {professor Damodan assumes this to be 10% for taxify}
• Development of new features,ongoing fine tuning of algorithms.
• Taxify driver cost {but none of the other drivers.
• Legal cases and settlement costs.
• Lobbying,regulatory compliance.
• Tranaction feesi.e credit card and charges
• Expansion to more cities and countries.
• Infrastructure costs,computing power,bandwidth
• Customer support
• Insurance costs
• Reaserch and development i.e Autonomous vehicles.

Review of taxi fares in NSW and taxi licences outside Sydney from 1 July 2018

The Urban Fare Schedule applies in Sydney, the Blue Mountains, Newcastle and surrounds, the Central
Coast, and the Illawarra. The Country Fare Schedule applies everywhere else except in 6 towns near the
Victorian border, which are exempt from fare regulation. See the Glossary for a more detailed description of
the fare areas
Table 1

8. Key resources
The master resource of the platform are its network effects.It is the resource that needs to be bult and the nurtured.The data,the algorithms and the capacity to anlyse and gain insights are essential.The latter also grows with the size of the network.
• Network effect between the participants i.e drivers and riders.
• Captured data,algorithms
• Analytic capabilities
• Skilled engineering and other staff
• Platform architecture
• Venture capital to keep the business growing
• Brands name and assets
• The rider and the driver app and products
9. Customer relationships
Taxify needs to consider four elements to manage their customer relationships. Their relationships to (1) the customers(=riders), (2) the drivers, (3) the broader public and (4) regulators. 2017 has been a difficult year in terms of customer relationships (here’s a list) due to a significant amount of negative coverage and regulatory intervention, i.e. restrictions or bans. At its peak, it lead to the resignation of ex-CEO Tim Kalanick followed by an attempt to make good on their driver relationships.
(1) Relevant for drivers & customers
• Manage any safety risks
• Manage bad behaviours (on both sides drivers and passenger) and improve rules continuously
• Deal with customer issues in an appropriate manner and timeliness (see “Channels” for more details)
• Transparent pricing, e.g. criticism on surge pricing by riders and decreasing hourly income by drivers
• Transparency around privacy (a number of repeat coverage over the years on insufficient data privacy, reports of security breach cover-ups)
• Portray the desired company image through social and other media
2) Especially for the drivers
Customer relationships to the supply side (the driver) will be mainly defined by what the platform does for them, examples are:

• The platform’s ability to generate income (Taxify is finally testing a long-standing driver request to allow tipping)
• Acceptable hourly wages (an Taxify~contracted survey concludes that Taxify drivers earn at least as much as taxi drivers, see below for a differing determination by the FTC that concludes only 10% of drivers actually achieve Taxify -touted wages)
• Acceptable working conditions and hours (the afore-mentioned survey states that Taxify driver hours were considerably less than taxi drivers, here the full pdf)
• Manage issues (accidents, damages or issues affecting earnings)
• Support in the on-boarding process where required
• Fair allocation of rides (algorithmic ride allocation avoids favouritism issues with the traditional dispatcher)
• Taxify is working on a trial program for enabling affordable private insurance (medical, injury, disability, life)
• From Taxify’s perspective: avoid groups of drivers to reduce risk of unionisation
(3) The public
• Taxify is working on portraying a positive image by claiming positive contributions to the communities:

• Pointing out positive impact on the environment, e.g. reducing emissions through Taxify
• Making communities safer, e.g. through reducing driving under influence
• How puts pressure on regulators through their communication campaigns pdf
• Manage the platform’s image across the media and other relevant channels (workplace culture, leadership shadows)
(4) The regulator
Taxify has faced massive public and political backlash that has put pressure on local regulators to look more closely at Taxify’s business practices. Here are few example how Taxify manages regulatory discussion:
• Referring to a FTC report, 1984 that shows the wasteful economic implications of the taxi medallion system
• A more recent FTC report, 2015 poiting out positive effects of Taxify on existing taxi value proposition
• A Chicago case study showing positive effects of Taxify
• An Austin case study of the positive effect on the local transport system (Taxify had left Austin due to high regulatory hurdles and returned after these were reduced)
• Negative coverage on greyball which may have been used to deceive regulators
• Taxify lost its licence to operate in London, collected over 500,000 petitions from users, appealed in court and with the case still in limbo, continues operating
• And most importantly (in the US) via lobbying (see above)
B. Interrelationships
Taxify has been known to partner with various established travel brands, presumably to grow its usage especially among business traveler. As early as August 2014, Taxify teamed up with United Airlines to let the airline’s app users access information about Taxify rides. Taxify’s deal with Starwood, which began in February 2015, lets riders link their accounts to their Starwood Preferred Guest accounts and accrue SPG points to be used at any Starwood hotel around the world.
This business travel strategy seems to be working: Taxify and other ride-sharing apps have become the transportation option of choice among business travelers, many of whom also belong to the loyalty programs offered by airlines and hotels.So, it only makes sense for Taxify and Hilton to partner together.

C. Critical success factors
Benefits for Customers
Taxify is a problem solver for riders. It is a problem solver first because the service provides a ride for those individuals who need taxi cab services at reasonable prices. There are millions of people, across major cities who utilize such services and Taxify has de-monopolized the taxi cab service and reinvented it in every way. Taxify is also fixing up the structure of the taxicab industry and making the industry more reputable. It is doing this by providing rides that are clean, offering up quality customer experiences, and accepting different forms of payments. They have also made the experience more customer oriented in that they allow the customer to track their vehicle as it is in route to them. They have also allowed customers to pay with their credit cards from the inside of the vehicle.
Word of Mouth
The early adopters of in the tech community saw that Taxify provided a solution to the failing taxicab industry in San Francisco. As they enjoyed the free rides and tech events sponsored by the service, they began to spread the news. The tech community took to social media sites like Twitter and their blogs to tell their friends and fans about a new way to catch a ride in the city. As they began to spread the news, Taxify saw growth in its business.
Benefits for Taxify Drivers
Customers aren’t the only ones experiencing positive effect from the implementation of this service. Taxify drivers are also benefiting. The company is creating jobs for drivers and limo companies that are having difficulty finding work in the city. As the company does not employee the drivers through the service, they do connect qualified drivers with customers who need rides located within a specified geographical area.
Early Adopters:
Taxify had much success when the early adopter tech community began to take notice and use of the technology. They knew opening in the San Francisco area was a smart move on their part as they would have access to a highly interactive tech community who would take an interest, and be looking for services that would improve their quality of life. They also found success because they found that the taxicab market in the area was not the best quality and was not widely used by the inhabitants, so their business structure and services would seek to improve the quality and taxi cab service. Taxify began to market to these individuals and promote in different ways and channels. They did this by hosting tech events. One of their prime ideas was to give members of the community free rides through the services and host awareness meetings for those who would most likely take part in utilizing their services.

D. Downside risks
Following a series of attacks on its drivers, ride-hailing service Taxify has launched an in-app safety button in partnership with Namola aimed at improving driver safety.
Taxify country manager, Gareth Taylor says this initiative is not a silver bullet for all their troubles but hopes it will help minimise the number of incidents
He says other initiatives such as armed response services will be launched in the coming months to compliment this partnership with Namola.
Table 2

We consider it would be useful to collect information to monitor the development and
impact of the policy changes from the Point to Point Transport Act and our
recommendations. It would better inform any future decisions and recommendations. This
data would provide IPART and the Government with the ability to analyse:
Ridesharing companies are our downsides in terms of competion. Uber drivers in Australia can expect to take home 75% of their weekly Uber income. Uber says you can expect to earn between $35-$40 per hour and will guarantee you this income when you start out. You can use the calculator below to get an idea of how much you will earn minus expenses. Taxify takes a commission fee of between 10-15% from the final price per order. It also offers a fairly lucrative bonus program designed to encourage drivers to increase more trips.
Table 3

Table 4

E. Business model changes
t also hopes that allowing drivers to take cash as well as credit card fares will also help it attract more passengers. “Taxify’s biggest advantage is the focus on good service by treating the drivers and riders better than other platforms. This means having higher pay for drivers thanks to lower fees,” Chief Executive Markus Villig told Reuters at Taxify’s headquarters in Estonia. “By the end of the year, I think we will be Number One in about 10 countries in Europe and Africa.
The basic business model is identical – both hook up passengers with self-employed drivers. Many incumbent cab companies in Europe have developed Apps to operate in a similar manner but most have focused on their domestic markets. But Taxify is unusual in launching in around 18 countries, mainly smaller markets in Eastern Europe and Africa, where Taxify is not present or is not yet dominant. Taxify usually takes market share by giving drivers money to sign on to its App – paying them even if they are not driving passengers. Then, as it becomes more popular with passengers, it withdraws the inducements. Analysts says Taxify aims to build a customer franchise and stable of drivers to dominate the market.

III. Conclusion
It’s no news that Taxify will always fight to retain its position at the top in various markets. China’s Didi Chuxing toppled Taxify to become a market leader in China. Ola is leading the pack in India as well. Can Taxify topple Uber to become a market leader in Australia as is been circulated in the news? We will have to wait to see.
IV. Recommendations
To ensure optimal performance of your Taxify driver app, please make sure you follow these requirements:

It is highly recommended to use higher-end devices on our platform that run on at least OS 6.0 (for Android) or at least iOS 8 (for Apple)
• Your device should have at least 1.5GB of RAM
• Do not use battery saver mode as this may cause GPS errors
• Connect your phone to a charger during a ride
• Use a phone holder to make sure you always get the best possible GPS signal and Internet connection
• On your phone settings, set your location accuracy as high
• Rooted phones are not recommended

Here is a our suggested list of flagship devices:

• Moto E4 Plus
• Huawei Honor 7X
• Nokia 6
• Samsung Galaxy S9
• Samsung Galaxy Note 8
• iPhone 8/X
• OnePlus 6
• Huawei P20
• LG V30
Note: When choosing your device, keep the above requirements in mind. Your account may be disabled if your device shows problematic GPS behaviour


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