Revenue Model For Taxi Booking App Business

Revenue Model For Taxi Booking App Business

It would not be an exaggeration to say that booking taxis has moved from gestures of the hands to swipes of fingers. There are a lot of applications that provide taxi booking services. The pioneers of this business created not only an amazing model but also a great channel for continuous flow of revenue.

This business model has inspired a lot of entrepreneurs to create their own taxi booking application. With Uber clone available in the market, starting your own taxi app has become a breeze. 

We have been talking about a steady stream of revenue. Let us look at a few astounding numbers that will further solidify the stance of taxi booking applications as a lucrative business opportunity.

The Statistics: 

Statista has revealed that the revenue of taxi booking services in the United States alone would cross $2.5 billion. Today, the Americans might be leading in revenues and user base when it comes to these ride-hailing apps. However, in the next 4 years, the Asia Pacific region is expected to lead the market share. By 2022, global revenues are expected to hit more than $7 billion.

All these projections have been made based on the numbers available now.  However, there are also good chances that the Middle East and Africa will also catch up and to the numbers to an even better figure.

Different Modes of Revenue:

There are multiple ways in which cab booking applications can earn their revenues. Before we go into different channels, let’s look at the plans that they have devised to create a steady inflow of profit.

Taxi booking applications offer different levels of services based on requirements. At the lowest level, a taxi is nothing more than a mode of transport that is expected to take people from one point to another. However, there are also people who would want to use this simple mode of transport as a status symbol. In addition to that, that also chances that a large group of people might want to move from one place to another. This movement can be within two points in the city or even between cities. Outside all of this, there also people who are willing to share their ride with someone else, especially if they are not pressed for time and if they are likely to save some money.

With so many possibilities within the taxi booking arena, service providers are expected to give different kinds of services. If we were to look at Uber as an example, they provide Uber Black, Uber X, Uber Go, Uber SUV, and Uber Luxury. Providing the same service for different people with different domains creates a wide spectrum of revenue generation. We have seen a similar strategy with Vertu and Nokia, and with Toyota and Lexus.

Another method that Uber and many other cab service providers use to generate profits is the dynamic pricing model, dubiously named surge pricing. It simply implies that the price for a ride might change according to the traffic, the demand, and the supply. This strategy not only increases the revenue but also helps the service-provider engage with more riders in the time of demand.

The operations of these service providers do not have to be confined to cabs alone. Uber, for example, has boat and helicopter services in certain parts of the world. Ola, a significant competitor for Uber in India has its own bike taxi services. Global examples like Grab and Go-Jek have followed the same model of revenue generation.

Different Channels of Revenue

There are three major channels from where cab services create their revenue:

  • Commission from the cost of the ride.
  • Subscription charges for special services.
  • Cancellation charges.

Commission from ride cost

This is basically how all aggregators work! They have done the difficult job of connecting the people who want a service with the people who provide them. Their revenue lies in taking a commission from the service provider for facilitating that revenue. Cab companies can fix anywhere between 15 to 30% as their commission for the ride that they have provided through that app.

This model of revenue generation introduced by Uber has created a revolution in this line of business. It has heralded the era of on-demand services by using location-enabled devices.

Subscription for Special Services

Of late, a lot of ride-hailing services have introduced a subscription model. This has been introduced keeping in mind the daily commuters. This would mean that cabs are all set to be mainstream modes of transport even for daily office-goers.

By introducing a subscription plan, these aggregators let you pay flat charges for fixed durations or distances. It might look like a loss from the service. However, by putting a time limit on 20 subscriptions and by ensuring continuous usage, it translates into better profits in the long run.

Cancellation Charges 

Cancellation charges are levied on users if they cancel the ride and the driver starts moving. Although there is some time limit that is given to cancel a writer, this cancellation charge insurance that not many resources are wasted in the booking of a ride that might end fruitless.


With so many revenue generation opportunities, there is no question that cab services are a lucrative option for aspiring entrepreneurs. Get your app ready for Launching your cab business in no time. With a few customizations, you can embellish your brand and logo, and you are all set to hit the market and get a share of the $7 billion that the industry would be worth in 2024.

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