There is no doubt that Uber is the most successful taxi-booking application in the world since its launch in March 2009. Despite heavy competition from other big players like Didi Chuxing, Ola, Grab, and Lyft, it has expanded its ride-hailing and ride-sharing services to 80 countries across 10,000 cities.
Apart from its taxi booking business, Uber has also earned huge revenue from other services like Uber Auto, Uber Eats, Uber Electric Bikes, Uber Freight, and Uber Scooter.
Despite the onslaught of the global Covid-19 pandemic, it has aggressively enhanced its brand image and grown its market share through measures like easy booking of vaccine appointments, free rides for Covid-19 positive patients, group orders for food delivery, and a quick grocery pick up option.
Entrepreneurs aiming to revolutionize the on-demand transportation industry can develop a game-changing Uber like app solution. They can team up with a proficient app development company for creating smoothly operating Android and iOS apps for the drivers and passengers, a modern web panel, and a sturdy admin dashboard.
Some useful tips for entrepreneurs to reduce their budget when launching a Ride-hailing app like Uber are
Test the feasibility of your product extensively – Only products that are economically and technically solid will work wonders in the intensely competitive taxi booking industry. Hence, entrepreneurs can create a Minimum Viable Product (MVP) containing all the basic features and functionalities. They can test its performance and speed, get feedback from experts and make appropriate changes to it. This will help entrepreneurs to adopt the right business strategy and growth plan before launching the full-fledged taxi app solution.
Adapt to different roles – while building the ride-hailing app like Uber. An entrepreneur cannot stick only to the area that he/she has more knowledge, like finance or marketing. They have to be an all-rounder and take care of all aspects like customer support, product development, sales, and technology. Entrepreneurs will also have to face the challenges of bootstrapping by raising funds from their personal savings without seeking any external assistance. It will take some time to attract more investments from venture capitalists.
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Keep an audit of all expenses – Just like how revenues are crucial towards running the Uber like app solution smoothly without interruption, the entrepreneurs have to closely track all the expenditure.
The major costs will be on the commission to the drivers and other employees, product development, digital marketing, tech deployment, and testing. Additional expenses will also have to be incurred for providing discounts and offers to the customers.
The entrepreneurs can decrease their total budget by utilizing basic software instead of expensive premium software and using revamped computers instead of brand new laptops.
Concentrate more on profits – While losses may be incurred in the initial phases to grab more market share, the ride-hailing app like Uber will not be successful in the industry if it does not earn profits in the long run. The entrepreneur must break even after some time by earning revenue equal to the total costs.
Additional revenue can be earned by offering rides exclusively for frontline workers and office-going professionals. More income can be fetched through commission from drivers, rent from leasing out of taxis, ride cancellation fees from customers, and transaction processing charges.
More investments can be fetched for the Uber like app solution in the future if entrepreneurs give more priority to profits than achieving growth. They can also hire staff only when required to reduce their employee costs. Expenses can be reduced significantly by treating drivers as independent contractors and not as full-time employees.
Operate in coworking spaces instead of high-end offices – Entrepreneurs need not rent out large offices for work but can work in coworking spaces that have all the necessary facilities. Traditional offices are expensive as the business owners have to pay costs for commercial leasing, electricity, furniture maintenance, and insurance.
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Coworking spaces are more economical and can be obtained on-demand by aspiring entrepreneurs. The expenses are less when functioning in a co-working space.
What are the major costs to allocate while launching a Ride-hailing app like Uber with a reputed app development company?
- The total time that is taken for development – which can be either a couple of weeks or few months.
- The hourly or monthly rate – paid to the development team for their work in creating the Uber like app solution. It includes salaries paid to the business development managers, front-end and back-end developers, finance managers, marketing specialists, project managers, QA testers, and technical support staff.
- The kind of features (basic and advanced) – integrated into the Ride-hailing app like Uber for drivers, passengers, and the admin.
- The type of technologies and tools – utilized for development. It includes different frameworks, operating platforms, and programming languages. The tech stack comprises Amazon S3, Amazon Web Services (AWS), Apple MapKit, Firebase, Google Cloud, Google Maps API, JavaScript, Kotlin, Node.js, Swift, Twilio, and integration with well-known payment systems like PayPal and Stripe.
- The extent of cross-platform compatibility – like the Uber like app solution needs to be deployed on different operating systems like Android, iOS, macOS, Web, and Windows.
- The level of customization – as the business firm would want to showcase its brand name and logo on the ride-hailing app like Uber.
- Additional expenses – for complying with the rules of the local and national transport authorities and following the guidelines of the General Data Protection Regulation (GDPR).
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Final Thoughts
As the entrepreneur expands the scope of the Uber like app solution to different cities and countries, the unit economics (total revenue earned and costs incurred for each ride) will get severely strained. This is where the business model of the ride-hailing app like Uber must be restructured by the entrepreneur according to the changes in market conditions.
More focus must be placed on maximizing the Lifetime value (LTV) to the passengers and reducing the Customer acquisition costs (CAC). The entrepreneurs can strengthen their business operations in the market by conducting targeted promotional campaigns to attract more travellers.
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Ambitious entrepreneurs can follow all the above-mentioned tips to reduce the costs and increase the profits and value of the Uber like app solution to achieve all their business objectives.
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