30 Oct5:50 AM
Singapore
SINGAPORE on Wednesday said hello to Hailo, a London-based taxi-booking app, and at least the fifth such third-party platform (after GrabTaxi, Easy Taxi, MoobiTaxi and UberTAXI) to hit the roads here in the last two years - a move observers say should further unnerve "traditional" taxi companies that continue to dismiss disruptive technologies.
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Trans-Cab Services, however, which has previously declared it would remove any third-party app decals found on its taxis, said it would continue to monitor the situation before making any decision. The latter has a dedicated taxi-booking app for its close to 5,000 taxis.
http://www.businesstimes.com.sg/transpor...up-a-level
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A comfort-delgro taxi driver told me that they have to subscribe to comfort delgro booking system and pay a monthly fees. They can also subscribe to old school radio (Boon Lay Taxi stand) for a fee too. He mentioned that the fee is not low it is a cost he's willing to pay as it helps in business.
While the booking system monthly and per booking fee is not a main cost driver for the drivers, it's a good source of profit for taxi company. I believe this is where a little additional cost creates much more value for customer - who in return willing to pay for the differences.
For example, a medium pop priced at $5 and the large pop corn priced at $7. The's only a certain amount of customers who buys pop corn a day. Selling at $5 for a medium one, $4.5 dollars goes to pay rental, salary, and cost of pop corn - profit margin is 10%. Selling at 7 for a large one, probably $5 dollars goes to rental, salary and higher cost for pop corns and bigger cup - a profit margin of 2/7=28.6%.
With a 2 dollars upgrade to bigger pack of pop corn, customer is happy to get much more popcorn/dollar while seller makes 3 times increase profit. To the customer, 2/5 = 40% increase price increases the popcorn volume by 150%. For the popcorn seller, the same 40% increase in revenue would mean 300% increase in profit/customer.
Unlike taxi rental, where real depreciation occurs, the booking system generates good money once it's paid off. Taxi fleet size would be important to determine the profitability.
I have no idea how much taxi companies make from the booking system. If it's in high proportion, it's facing a disruptive technologies that is trying to take a sip from the most lucrative (low unit cost high profit margin) cup from the taxi companies.