Augmenting customer experience in the taxi industry – how David can defeat Goliath

The taxi industry goes way back to the days of the horse-drawn carts, much before the combustion engine itself. Throughout this time, cities instituted strict licensing requirements, regulated fares, required insurance coverage and vehicle quality, treating the taxi service as something akin to a public utility. With all its good intentions, over regulation of the taxi industry has led to regional monopolies, fragmentation, lack of innovation and a very poor customer experience.

Taxi apps like Uber and Lift reimagined the customer journey, taking care of the major pain points in hailing a taxi, riding the cab and paying for the cab. A number of success factors played in Uber’s disruption the old system but the major one has been superior customer experience. Uber has offered its clients a convenient app that allows tracking of the vehicle en- route, gives estimates of the fare, allows rating of the driver and accepts different forms of payment.

Soon we may witness driver-less Uber cars such as the one below.

Uber's driverless cars.

Uber’s business model and convenient app have given it market dominance in many cities around the world turning it into the Goliath of the taxi industry. The technologically backward taxi companies have been left struggling for rides and scrambling for survival.

Not all is lost for the taxi industry however. It too can innovate, especially if the focus is on deregulation and improving customer service. Uber and Lift drivers are usually inexperienced and rely too much on GPS. In contrast, seasoned taxi drivers have accumulated knowledge of various routes and traffic patterns. Successful taxi companies have heeded customer’s demands and have implemented policies such as no-smoking, clean cars and polite behavior of the driver. Some cabs even provide complimentary WiFi and water and have POS terminals for payment with cards. Regular taxi cabs still employ the fixed fare model which is fairer than the non-transparent surge pricing model (peak and off-peak pricing) employed by Uber. Competition with Uber has forced taxi companies to become more customer focused and implement improvements.

According to Gartner, by 2017 89% of marketers expect that customer experience will be the primary differentiator of companies. To be competitive, taxi companies need to match the convenience of the Uber App. That however will be difficult to achieve with yet another app as the market is already flooded with apps and discoverability is very difficult.

Retention Curves for Android Apps


Gartner predicts that 20% of brands will abandon their mobile apps by 2019.

To catch up and even leapfrog Uber taxi companies need to provide an excellent customer experience on the emerging dominant platform text messaging, that is already being used more than social networks.

Messaging Apps have Surpassed Social Networks

They can offer a comfortable, familiar and satisfying customer experience via a chatbot (a conversational interface) with “Natural language processing”, which will humanize the customer experience enabling customers to order taxis with their own words. Millenials and Generation Z already expect companies to provide Self-Serivce options to their services. Chatbots are inexpensive, easy to implement and lead to substantial improvements in terms of customer service and operations. They are the new technology tornado that is reshaping industries.

In the taxi industry chatbots can take care of the most painful phase of taxi rides – the hailing of one. We will no longer be required to engage in time-consuming and frustrating analog IVR interaction, especially at peak times when all lines are busy. The interface of the chatbot can be multilingual, with buttons to decrease friction and speed up interaction. A chatbot can use your smartphone’s GPS location to suggest a street address or you can enter a location with text. We have been able to train a chatbot to understand Cyrillic, shlyokavica (Cyrillic name with Latin letters) and Latin. To resolve a location the chatbot can lookup in Google Maps, in Google Places and in a proprietary taxi system and come up with the most appropriate suggestion. You can select preferences such as car size, type of contract and payment method or leave a special note for the driver. The chatbot can give an approximation of the cost for the trip and estimated time of the taxis arrival for pickup and dropoff. Chatbots can collect feedback about the drivers and their cars making sure that the customer experience is logged and acted upon to improve service. Chatbots based on Facebook Messenger and Viber will soon have payment processing and we will be able to pay for taxi rides within the chatbot.

Yellow is one of the most innovative and customer oriented taxi companies in Sofia, Bulgaria. The chatbot that we created for their Viber public channel includes functionality for ordering taxis, providing feedback and inviting friends.

Yellow Taxi ChatbotYellow Taxi ChatbotYellow Taxi Chatbot

With it you can also select the vehicle type, and add a note to the driver. The chatbot estimates distance to the destination, the approximate duration of the trip and the approximate cost. You can watch a brief movie of the bot in action here.

Armed with a chatbot solution taxi companies will provide superior customer experience, turning them into a David who can fight Goliath and win. is a developer of chatbots with a proprietary product which it uses to create chatbot solutions for a variety of industries.

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