The India Taxi
Market is anticipated to register a robust CAGR in terms of value by 2028. Increasing
adoption of smartphones and internet access has led to a rise in the use of
ride-hailing apps and has made it easier for consumers to book a taxi. Urbanization
and changing consumer preferences has led to an increase in the demand for
on-demand transportation services. Consumers are also increasingly preferring
the convenience and flexibility of booking a taxi through a mobile app. The
government has been promoting the use of shared mobility services, which has
helped to create a favorable environment for the growth of the taxi market. Growth
of e-commerce has led to an increase in the demand for delivery services, which
has helped to drive the growth of the taxi market.
Rising Adoption of Taxis in Tire 1 and
Tire 2 Cities
In metro cities, around 35% taxi
business emanates from the corporate sector. Taxi
companies are becoming tech savvy and are using digital tablets inside taxi for
advertising and for exterior/interior branding.
The taxis use 4 door panel and back glass strip, as a part of external
branding.
On the other hand, companies provide
seat covers, head cover and other accessories for interior branding. Tablets
and digital screens are strategically located behind driver’s seat. This would
enable commuters to choose content from different categories including fashion,
entertainment, news and lifestyle. Companies also have the option of choosing other
ways of cab advertising such as ads on bill rolls, SMS campaign (with the
permission of TRAI) and sample distribution in taxis.
Rising Demand from Corporate Segment
Taxi
advertisements have become an important means of promoting new brands. However,
a couple of years back, companies and corporate houses resorted to cost cutting
methods and limited expenditure on advertisements and promotions. This trend
has been witnessing a change. The concept of cab advertisements has given a new
dimension to the way of marketing fundamentals for foreign and domestic
companies in India. Companies sign a contract with taxi operators to promote
their brand on a monthly, quarterly, half-yearly and yearly basis, as per their
convenience. A large demand for taxis emanates from the corporate sector. Corporate
sector prefers services of taxi operators, as they want punctual
and reliable service. Enhanced security and comfortable commute also lure
working professionals to use of radio taxi services instead of public transport
and traditional taxis.
Urbanization and Support from
Automobile Sector
OEM manufacturers are also
helping in addressing the rising demand from cab aggregators such as Ola and
Uber. For example, Hyundai Motor India started selling its compact sedan Xcent
specifically for taxis. Renault also plans to launch the new 7-seater version
Lodgy specifically to meet the rising demand for cab aggregators. Similarly,
Maruti Suzuki came with Swift Dzire ‘Tours’ version for taxi companies.
Growing Popularity of Aggregator
Model
Aggregator model is one of
the most popular business models in India taxi market, wherein, drivers are
attaching their individual cabs to a taxi service provider. OLA started to work
on aggregator model, wherein small fleet owners or single car owners can use
the brand name of the company and get registered with them. The car owners and
drivers are free to take up any company’s rides, but for every ride initiated
by the company, they pay the company a portion of the earned share.