Taxi app development Challenges faced by taxi booking app providers and solutions

Taxi App Development: Challenges Faced by Taxi Booking App Providers and Solutions

An Uber-like online taxi booking business is one of the most crowd-pleasing and commercially successful businesses of the 21st century. 

However, overly intensified markets and the failure of many new Uber-like companies make hidden business challenges of this industry pop up. 

So, if you are an entrepreneur, planning to kick off an Uber-like taxi business and don’t want to fail, it is essential to know the business challenges of the online taxi booking business and ways to decode each of them. 

By a happy chance, we have covered it in this blog which was written after having a long conversation with Coruscate’s business expert. 

Following are the top 10 business challenges of the online taxi booking industry that you have to know before going for taxi app development. 

Taxi Booking App Business Challenges

Challenge 1: Government Regulations 

Whether you believe it or not, but the major challenge you have to overcome to kick off a profitable taxi booking app business is the government regulations. 

In recent times, the ridesharing culture has been accepted by millions of people, but due to lack of a strong arm, it has grown in a very dangerous manner. 

Many cases of assault and molestation are justifying it in the best possible way. 

Thus, the governments of all over the globe have finally reinforced the laws and regulations with additional and much iron-fisted regulations for the Uber-like app providers. 

Many companies that have failed to satisfy these regulations got banned permanently while some companies have suffered the loss of operational license for a limited time but lost sight of users for life-long. 

So, it turns out a vitally important need to proceed in app-based ridesharing business after wrapping your mind around the government regulations. 


In such an unsettled situation, Coruscate Solutions can come to aid. 

We have already documented all regulations of different markets and what does it take to satisfy these regulations. We even develop a taxi app that does not disobey these laws and regulations in any way.

Challenge 2: Competition   

Competition is there in all well-explored industries and it should be. But when it becomes the reason for profit fall, you need to treat it like a challenge and start figuring out ways to overcome it before it gets worse.

In every tier 1 and 2 cities, people do have multiple options for booking a taxi. Because of multiple choices, they always have other options if an app does not influence them. 


Introducing futuristic features in the app is the only way to get rid of cut-throat competition and get the throne of a top taxi app. 

In other words, if your taxi app is equipped with next-gen features, you will automatically attract more users than your competitors and so, you will easily be profitable. 

Following are the few next-gen features that we encourage you to have in your taxi app to make it stands out.     

Split payment 

• Vehicle selection 

• Interactive map and taxi tracking 

• Inbuilt messenger 

• Gamification 

• Voice recognition 

• Discount or referring program 

• Preferred driver 

• Ride scheduling 

Challenge 3: Funding  

If you are jumping into the ridesharing market with the Uber-like app, you must be thinking to bag a huge amount of funds from some top-notch investors. 

But this is not going to happen so easily as ridesharing is a well-explored business and the scope for the innovation now remains very limited. 

Thus investors are investing only in well-established ridesharing companies such as Uber, Grab, Lyft. 


You can derive many benefits from our funding channels. 

By paying just $10k or less which is the cost of the taxi app development, you will get exclusive rights to know various tactics to attract investors by our business experts. 

Challenge 4: Lack of  Professional Drivers 

One of the reasons why people no longer feel safe while being in the cab is the poorly executed authorization process of the drivers. Even ridesharing companies want to avoid amateur drivers on-board, but they are helpless against the way the gig economy works. 


However, with a few dedicatory developed module in the admin panel, you as a business owner can make sure that all drivers are professional and haven’t engaged in any illegal activities by asking them to upload their character and police check certifications in the app itself. 

You can even track their rating and if it falls below a certain limit, you can straightaway delete their profile with just a single click.  

Challenge 5: App Development Cost 

Taxi app development is the first step to start the online taxi booking business. Without the app, there is no other way to start such an online business. 

But luckily, a lot of taxi app development companies are claiming their expertise to develop a taxi app. And unluckily, the cost of developing a taxi app is not at all pocket-friendly for a startup. 


We always ensure that pricing does not define the future of your app idea. Thus, we charge you the lowest possible price. 

For instance, we’re providing a taxi app equipped with all important features and working on all the latest technologies around the price tag of $10000. 

Challenge 6: Riders’ Safety 

Most of the taxi app providers are overlooking it, but you don’t have to as it can lead your fresh startup to a dead end. 

So the question is, how your 10 or 20 people team can make sure the safety of 1000 passengers traveling with your company’s drivers? 


You have many options. You can introduce two major safety features – the SOS button on each screen of the app and the option to share the current status of the ride with anybody. 

You can also ask a taxi app development company to accommodate a dedicated AI-based feature in the admin panel to identify the worthiness of drivers using factors like their driving pattern and users’ reviews. 

Coruscate has figured out many other ways to make users’ riding experience safer. Our business experts will make you familiar with those safety measures in our first conversation.          

Challenge 7: Taxi Allocation or Driver Matching  

One of the reasons why Uber is successful is its efficient taxi allocation. With its state-of-the-art matching algorithm, Uber never makes riders wait too long after requesting the ride. 

This matching algorithm considers traffic, one-way streets, bridges, weather, etc to allocate the driver to the rider rather than just allocating the nearest driver. 

As a result, Uber carries out driver allocation in the most efficient way which eventually increases user satisfaction and profit. 

If you want to have such an algorithm in your next taxi app, you need to hire only that taxi app development company that has been working on AI technologies. 


We have already covered the working of Uber’s matching algorithm in another blog.  

Challenge 8: Automation 

Needless to say that automation can reduce the need for manpower and increase the business output to a significant level. 

It can open up many more business opportunities for you. One of the most successful startups, GoJek which offers more than 22 on-demand services including taxi booking, is handling 3 million drivers with the help of only 12 engineers and a robust automated system. 

If you want to achieve the same, automation is the key. With it, you don’t have to worry about some very important business processes like payroll, drivers’ verification, and business decisions. 

Challenge 9: Earning More Profit (particularly during and beyond COVID-19) 

Though the profit margin is relatively higher in the taxi booking business than in other mobility businesses, it still isn’t sufficient to satisfy your all financial goals. 

COVID-19 is making the situation worse. Almost all taxi booking apps including Uber reported an average of 70% decline in user activities during the pandemic. 

Solution 1:

Surge pricing can be one. It is a very popular concept in the ridesharing industry. 

It basically increases or decreases the fare based on the demand. It may sound like a very easy way to boost profit, but it is not; it is a challenge. 

To have a surge pricing module in your app, the most fundamental requirement is the algorithm that keeps predicting the future demand and supply and setting the fare according to it. 

Solution 2 (more promising):

Since with the taxi app, you already have the manpower and logistics infrastructure to deliver food, grocery, and couriers, you should integrate such delivery modules in your taxi app. 

All delivery service providers have been experiencing a surge in revenue since the pandemic hit us. You can capitalize on this new customer behavior with a taxi + courier delivery app. 

This will not only offer more earning opportunities to your drivers, but it will also facilitate you to generate more revenue through multiple revenue streams. 

We deliver business solutions. And the best solution we have for your taxi business is the taxi + courier delivery app platform  

We believe an app development company should not be only limited to delivering apps that clients ask for. It should also put efforts and its expertise to solve unasked business challenges. 

In March 2020, we identified that all taxi apps were struggling to generate revenue due to the pandemic. 

So, to help new and even existing taxi app owners, we’ve launched a taxi + courier delivery app platform that allows you to offer multiple services from a single app. 

So far, more than 60 taxi app owners have implemented or adopted this solution and tagged us as ‘solution provider’. 

It is so useful and unique that you will break-even within just 2-3 months. 

To help the maximum number of entrepreneurs, we’re providing a free live demo of our taxi + courier delivery platform along with free consultation.   

The team which engineered such a purposeful platform is just a click away.


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