Impact of taxi and private hire apps focus group

Impact of Taxi and Private Hire

Booking Apps

Focus groups debrief

November 2016

Transport for London

Contents

 Background and Objectives

 Method

 Overall impact of apps

 The impact of apps on the market for private hire vehicles

 The impact of apps on travel behaviour and mode usage

 The limits of the impact of apps on travel behaviour

 Apps in detail

 The benefits of apps

 The drawbacks of apps

 The differences between individual apps

 Apps and customer service

 The future

 The factors behind Uber’s success

 The opportunity and challenge for Black Cabs

 The sharing economy and UberPOOL

 Concluding comment

Taxi & Private Hire focus groups: impact of apps 2

Background and objectives

 The context to this research is the very rapid growth in the use of apps for booking taxis

and minicabs, which doubled in a single year from 2014 to 2015, when a third of

minicab journeys were booked using an app+

 The overall aim of the focus groups was to understand qualitatively how taxi and

minicab booking apps have impacted on the overall private hire market, and particularly

whether it has expanded the market or simply shifted demand from one type of

supplier to another.

 It follows analysis in New York which suggested that in “taxi-starved” areas 80% of the

demand for Uber is generated, whereas in the central business district 87% is captured

from existing Yellow cab journeys*.

 The focus groups therefore aimed to explore within a London context key questions

such as:

 Which apps Londoners are aware of, which they use, and why they use them

 Whether they use apps only in specific circumstances and what these are

 What the experience of using apps is, what their good and less good aspects are

 How costs compare with a black cab

 Whether users of apps have changed their travel behaviour as a consequence of using apps.

+ Black cabs and Minicabs Customer Satisfaction Survey Quarter 3 2015/16, TNS * The Economist, August 15

2015

Taxi & Private Hire focus groups: impact of apps 3

Method

 Three focus groups - 1 hour 30 minutes to 1 hour 45 minutes each.

 Two groups at Steer Davies Gleave office in Waterloo SE1, and one group at

Research House, Wimbledon SW19.

 Group 1 – 4 respondents; Group 2 – 3 respondents; Group 3 – 8 respondents.

 Groups 1 and 2 recruited from the PanelBase online panel, group 3 by Animate

Research & Vision.

 Research was conducted on 10th & 11th February and 8th March 2016.

 All groups:

 Mixed gender

 Wide spread of ages and socio-economic class

 All users of taxis and/or minicabs

 All currently use at least one taxi/minicab app

 Mix of users of different apps

 Specified apps: Uber, Addison Lee, Kabbee, Hailo

 Wide spread of frequency of usage - weekly to once every 3 months.

Taxi & Private Hire focus groups: impact of apps 4

Context - terminology

 The terminology used by Londoners and our focus group participants can be

confusing but also quite revealing. It can be confusing because it is slightly at

odds with the official terminology – this is particularly important in the context

of the verbatim quotes which report exactly what the participants said.

 A key point is that people use the term ‘taxi’ as a generic term for any private

hire vehicle, minicab, black cab, or chauffeur drive vehicle.

 The term black cab is used when talking about an official London Taxi, and is

used to distinguish the vehicle from a minicab or unlicensed taxi.

 People do recognise that black cabs are licensed and this is partly what makes them

different. There is confusion though over whether minicabs are licensed in any way or

not.

 One interesting point is that the term ‘Uber’ has started to enter the language

as a specific type of service, with a clear differentiation between Uber vehicles

and other minicabs, and even vehicles hired using other apps.

Taxi & Private Hire focus groups: impact of apps 5

Overall impact of apps

The impact of apps on the market for private hire vehicles

 For those using apps the private hire market has fundamentally

changed – the app (and more specifically Uber) is much more than

just a way of booking a taxi or minicab.

 In fact, from the customer point of view the market can be

described in terms of the following types:

 Black cabs, the traditional London taxi

 Addison Lee – a specific service which is positioned somewhere between

a black cab and a minicab, with a focus on the business market

 Uber – through its scale and marketing reach Uber has successfully

differentiated itself from other apps

 Minicabs – booked either using an app other than Uber, by phone or in a

minicab office

 Chauffeur drive – a relatively niche product for special occasions

 Unlicensed cabs – that is, cabs that tout for business illegally.

 It seems that the spending on apps comes partly from user’s

budgets for social activities: this implies that in terms of transport

it is not a ‘zero-sum’ game but that apps can expand the market.

Taxi & Private Hire focus groups: impact of apps 7

 It is so easy to use. It

has been quite

revolutionary for me.

 I seem to use it more

when I have friends or

family visiting from

abroad because you

know it is part of the

London experience so

they like to ride in a

black cab.

 I think it [black cab] is

always a bit of luxury.

 Uber works very much

on spontaneity or

laziness almost.

 It [spending on Uber] is

part of your social life.

The impact of apps on travel behaviour and mode usage

 The availability and use of apps has had a complex set of

impacts on behaviour, many of which are quite subtle

and hard for users of the apps to recognise.

Nevertheless, users indicated each of these effects:

 An increase in use of minicabs facilitated by increased

convenience combined with a lower cost

 An associated increase in spending on minicabs

 Switching some trips from bus (particularly night buses) to

minicabs

 Switching some walk trips to minicabs

 Switching of trips by traditional minicabs to minicabs booked

via an app

 Switching some trips from taxi to a minicab booked via an

app.

 At the same time it is worth recognising the current

limits to these effects…

Taxi & Private Hire focus groups: impact of apps 8

 I feel like I do more or go further

afield because I can get an Uber.

 I would say I am using taxis more

with the app. Like I say I am very

much ‘Oh just get a taxi it will be

here in a minute, lets do that and

do that’. It has taken the place of

walking and tubes really.

 I feel like I don’t use the night bus

as much anymore.

 I would say there is a time for Uber

and a time for public transport

where they do not cross over.

 It has made me lazier. I have to go

to the doctors sometimes and I can

get a bus and it is only fifteen

minutes and I think I can’t be arsed

I will just get an Uber it is only four

quid.

The limits of the impact of apps on travel behaviour

 The effects on travel behaviour of apps appear to be

constrained currently due to the limits of the circumstances

in which the apps are commonly used.

 The core market for apps currently is spontaneous leisure

trips, particularly at night or in places where hailing a taxi is

difficult.

 Uber in particular has tapped into and developed this market,

and conversely therefore is not widely seen as an option for

business trips or planned leisure trips such as to an airport

(the market for which is largely minicabs booked by phone).

 The Addison Lee app seems to have helped the brand to

secure its place in the market and to retain its loyal

customers. It’s less clear whether its had a more fundamental

impact on behaviour, with the same being true of black cab

apps such as Hailo and Gett, the role of which seems to be

more about defending their position against the newcomers.

Taxi & Private Hire focus groups: impact of apps 9

 When you are in a black cab

it feels like it is very

professional. Sometimes

when you are with other

companies including with

Uber it can feel like you are

just in someone’s car.

 I have always used local

minicabs for the airport

because for early flights you

need to be sure.

 Sometimes you do just put

your hand out in the road. I

like that actually when you

put your hand out and they

stop for you, which is really

cool. I don’t have to even call

someone I just have to do

that (waves hand). That is

definitely even better than

an app.

Apps in detail

The benefits of apps - overview

The things participants liked about the best apps can be

summarised as:

1. Super convenient

2. Better value for money

3. Shared benefits from incentivisation

4. Virtually instant

5. Feeling of safety through provision of information

6. Modern and fun – the ‘in-thing’.

Taxi & Private Hire focus groups: impact of apps 11

 Cashless is a big plus for me ... I also

like the idea that you don’t have to

tip as well because the price is the

price. It isn’t that you then have to

start giving cash as well or even

include a tip in the quote; I mean the

quote you get is the quote the

journey is going to cost in advance.

 There are lots of their details, name,

number plate, picture, so you feel

that they are easy to trace. And also

because all these people have been

reviewed before you can check if it is

someone you can trust because I

guess you know there is always a

little bit of suspicion so I feel like you

know I like the fact that you can know

a little bit more about this person

who is going to drive you home.

The benefits of apps – 1

Super convenient

 Since most taxi/minicab users have a mobile phone with them,

using an app is extremely quick and easy.

 It means the booking can be done without unnecessary

interactions with other people.

 The GPS means the taxi/minicab knows where you are and can

find you easily wherever you are, even if you don’t know

yourself.

 There’s no need to carry cash.

Better value for money

 Not only are fares lower, but payment is remote and painless

making it feel even less expensive.

 There’s certainty over the fare.

 There’s no meter reminding you constantly of how much it’s

costing you.

Taxi & Private Hire focus groups: impact of apps 12

 I use them because I have

got them in the palm of my

hand.

 I do find it convenient using

Uber if I don’t have cash on

me, as my card details are

stored.

 It has made taking a taxi

easier…It knows where I am

so it has made it easier.

 You know up front how

much you are going to pay.

 I never enjoy black taxi

rides because I am sitting

there watching the meter –

how much is it going to cost

me.

The benefits of apps - 2

Shared benefits from incentivisation

 Word of mouth recommendation appears to have been

the key to the quick adoption of app technology, and this

in turn has been driven by referral code promotions for

new users.

 The key here is that this has mutual benefits for both

parties: both the recommender and new user receive

money off.

 This can even lead to competition between friends to see

who can make the most recommendations.

Virtually instant

 An attraction is that all you have to do is press a few

buttons and a vehicle is the on its way, and then arrives

just a few minutes later. There’s no waiting for someone

to answer the phone, and (generally) no waiting for a

vehicle to be available.

Taxi & Private Hire focus groups: impact of apps 13

 When he said it I thought ‘Oh

many people keep talking about

this Uber. It is the best thing, it is

the next level, you don’t have to

worry about money. So I thought

‘Alright then I will do it because

you are obviously getting a kick

back’. So then I thought this is

pretty great.

 I was under pressure to use it

and it became a bit of a

competition in our house to

recommend other friends

because you would get the ten

pounds off.

 That is the really great thing

about it. It knows where you are

and it comes to you instantly. In

two minutes or three, which is

really good.

The benefits of apps - 3

Feeling of safety through provision of information

 Using an app is quite a different experience because of the

amount and quality of information provided:

 Where the car is, when it will arrive

 What the fare will be

 Colour, make, model, and registration number of the car

 What the driver looks like, their telephone number

 The driver’s rating.

 This means that users feel safer and less anxious – it all

provides peace of mind.

Modern and fun – the ‘in-thing’

 A less tangible but still important benefit (for some) is that

apps are in vogue.

 They are seen as progressive and using the services are a topic

of conversation.

Taxi & Private Hire focus groups: impact of apps 14

 But they send you a

photograph of the driver -

they know who is going to be

driving you and you know who

is going to be driving you…I

feel really safe. I am happy.

 I love that you can see the car

coming to you, where it is. You

know exactly how long it is

going to be cause it counts the

time down for you.

 You feel safe as a woman that

you have all this information in

front of you.

 They have to make that effort

[because they are rated] or

else they won’t get repeat

business.

The drawbacks of apps - 1

The apps are not perfect and some drawbacks and

issues were highlighted (see below).

In general, these drawbacks were forgiven and far

outweighed by the benefits:

1. Deficiencies with GPS

2. Issues with mobile phone battery life

3. App usability issues

4. Minimum charges

5. Surge pricing.

Taxi & Private Hire focus groups: impact of apps 15

Yes well while GPS means you don’t

need to know every street in London

the really good thing about black cab

drivers is that if they need an

alternative route or if the GPS takes

you down the main road or the

straightest route, a black cab driver

can say ‘Well it is Friday night and if I

take you down by Liverpool Street

Station we are going to be stuck in

traffic for an hour so actually I can do

these back routes and get you there

more quickly’…It is nice that black

cabs will know the fastest route and

also I feel that when I’ve got black

cab they haven’t ripped me off trying

to make the journey longer - they

have always taken back routes and

made the journey shorter.

The drawbacks of apps - 1

Deficiencies with GPS

 May not be accurate every time – can cause difficulties for

driver and passenger finding each other.

 Drivers tend to be reliant on GPS for directions:

 Can lengthen journey and cost more

 Do not know short cuts to avoid traffic, road works etc.

 May ask passenger to direct – can irritate – it is meant to be a

service.

Issues with battery life

 Limited battery life can mean that the phone ‘dies’ so

cannot book via app in the first place.

 Or phone may die after having made the booking so driver

can’t ring you and may not be able to find you.

Taxi & Private Hire focus groups: impact of apps 16

 I think it can take you a

long time to get to where

you want to go because

they do not know all the

short cuts and some roads

are chock a block with

traffic...

 You do not have that

problem with a black cab -

they do the Knowledge

 So my phone died just as I

ordered it and it was only

two minutes away. So I

literally ran down the road

looking for this car and I

remembered the

registration and I flagged

him down so it was fine.

The drawbacks of apps - 1

App usability issues

 There can be some lack of clarity on how to use the app,

especially for first time users.

 This can result in booking a minicab by accident when

actually just looking for an estimate.

Minimum charge

 There was some irritation that even when a minicab is

booked by mistake or cancelled, there’s still a charges (of £5).

Surge pricing

 Surge pricing evoked some differing reactions:

 Many dislike it and find it unacceptable at any time

 Some feel it is acceptable on certain occasions such as New Years

Eve - drivers are working whilst others are on holiday

 Some acknowledge that it is just a factor of supply and demand ,

and that it means they will be able to get a taxi/minicab more

easily at busy times.

Taxi & Private Hire focus groups: impact of apps 17

 That is one thing when you

try the fare estimate you

actually book it when you

are just trying to see how

much it will be. And then you

panic and just go out of the

app but you have already

booked it.

 You should not be charging

me that five pounds - that

really irks me.

 The price surge is the one

thing I really hate about

Uber. It is a Saturday night

and it is three in the morning

and they really put the price

up.

 It [doubling the price]was

fine by me because

otherwise they would have

been inundated.

The differences between individual apps - 1

Uber

 Uber is quite clearly THE taxi/minicab app

 The most well known, the most widely used

 Considered by some as ‘revolutionary’

 Good enough service that many feel no need to look at alternatives

 It is even entering our language as a verb “let’s Uber it”.

 It benefits from scale and being international

 Provides some good options in terms of:

 Types of car

 Splitting fares / sharing / pooling.

 Customer service seen to be good.

 Main negative identified was not being able to book in advance.

 Professionalism, knowledge of London and language skills of

drivers varies, but seen to be above average on the whole due

to driver ratings.

Taxi & Private Hire focus groups: impact of apps 18

 It is big so the chances are

that there is going to be a

taxi near you.

 Yeah I think Uber is

probably the cheapest.

 So you have a trust in

something that has a

worldwide reputation.

 Uber has had a large

amount of press; there

have been lots of articles

about Uber.

 We all order Ubers when

we finish [work] to take

us back to the hotel.

 Yes you can get a luxury

car or a people carrier

type car. You can get

everything.

The differences between individual apps - 2

Addison Lee

 Well known and trusted brand generally felt to be between

Uber and black cabs in terms of professionalism and fares:

 More expensive than Uber; cheaper than black cabs

 Drivers more professional than Uber; but have not done the

Knowledge like back cab drivers.

 Often used for work accounts but sometimes for personal use

too.

 Were innovators before Uber - but now playing catch up.

 Main differences with Uber are that:

 Can book in advance – good for airports, hospital trips

 Choice of how to pay – on account, card or cash

 Drivers and cars consistently smart and professional

 But less London wide availability than Uber.

Taxi & Private Hire focus groups: impact of apps 19

 They are very reliable, very

trustworthy. I would never

put my boss in an Uber but

I would put him in an

Addison Lee.

 They are a lot more

professional. And I do use

that [Addison Lee] a lot

more for work than for

personal use, as they are

quite expensive. But yeah, I

do prefer Addison Lee.

 I would compare Addison

Lee with black cabs and

Uber with Kabbee and

minicabs.

The differences between individual apps - 3

Hailo

 A few had used Hailo in these groups which was generally

known to be a black cab app:

 App was rarely used by them and some has deleted it

 More expensive than Uber

 Only suitable for Central London.

 Very patchy experience of taxi availability via Hailo:

 Often predicted wait times of 25 minutes – too long for most

 Some bad experiences – e.g. booked for airport but cab 30 mins

late.

Kabbee

 Two of our participants had used Kabbee: mixed experiences.

 Point of difference is that it is a comparison site.

 Can book cars in advance.

 Can pay by account, card or cash.

Taxi & Private Hire focus groups: impact of apps 20

 I downloaded it [the Hailo

app] and to be honest it was

pretty good until I saw the

Uber app and the Hailo app

just had not kept up with

that progression I think.

 ‘Hailo’ - I have heard about

that one but I have not used

it because you see I have not

seen promotions for other

cab apps. Not even on the

Internet. Uber is really well

promoted. Other ones not so

much.

 Well yes Uber is competitive

generally but with Kabbee it

gives you options with

different mini cab companies

as well so definitely you

have more options price

wise.

The differences between individual apps - 4

Other apps

 A number of people had used other apps on the odd occasion.

 These included Bounce, Wheeley, Minicabster, Gett, Cabbit,

Dial-a-cab.

 However none had stuck with these apps for various reasons

 For one user Bounce didn’t ever show that there were taxis

available so the user deleted it

 Gett offers black cabs and prices are high vs. alternatives.

 So people migrated over to Uber for most journeys.

 Customer Satisfaction Survey (CSS) data* confirms the

dominance of Uber which represented 70% of all app minicab

bookings in (Addison Less was second with 10% and Hailo

third with 8%).

* Black cabs and Minicabs Customer Satisfaction Survey Quarter 3 2015/16, TNS

Taxi & Private Hire focus groups: impact of apps 21

 I have Uber, Addison Lee,

Kabbee, and Hailo. And the

reason being especially at

night on a Friday and

Saturday night the waiting

time could be quite long so I

do just check all of them to

see you know which one is

the fastest.

 They [Uber] have just taken

over. Drivers are not going

to Bounce or these other

ones…It is like one gets the

monopoly and everyone is

recommending it to

everyone and they are just

wiping the floor with all

these other ones.

Apps and customer service

 Most people in these groups had had no problem with

using their taxi/minicab apps so had no experience of using

customer services.

 It was often clear how to email customer services but

finding a telephone number could prove more difficult.

 All want to be able to call so want a telephone number

prominently displayed on the app.

 Those that had contacted customer services were generally

happy with their experience – customer services tended to

very responsive and sympathetic to customers – this would

seem to be a deliberate policy adopted by the app

operators.

 But there was one incidence with Uber over an outstanding

fare which was not resolved so the woman had to get

another phone to be able to use the app again as her

original phone was barred.

Taxi & Private Hire focus groups: impact of apps 22

 I had an Uber driver who

threatened me and my

friend to get out of the car

in East London at four in the

morning and he then took

us home to New Cross via

Vauxhall…I emailed Uber

and they actually gave me

some compensation for it

because it was so stressful

and it actually put me off

using Uber for a little while.

 I like talking to someone

over the phone; it is like I

like being heard.

The future

The factors behind Uber’s success

 It would be misleading to pin the success of Uber down to one

thing: there are many factors including:

 They have recognised the fact that the world is becoming

increasingly fast moving with people becoming increasingly

impatient, so looking for quicker and easier ways of doing things.

 Other trends they’ve tapped into include:

 The desire for accurate real time information

 Increasing reliance on mobile technology

 The move away from cash and even from cards

 The expectation of instant customer feedback

 The sharing economy and car-free lifestyle.

 Arguably, these all apply to any app, so what makes Uber

different?

 Perhaps the key factor is the scale of their ambition and vision –

their starting point is to think big and not to expect overnight

success, but to a have a longer term view

 They can afford to do this in part because of their international

standing.

Taxi & Private Hire focus groups: impact of apps 24

 As soon as I said ‘Taxi’, he

said ‘Oh don’t call a taxi use

Uber’.

 It does it all for you. It

pinpoints where you are

doesn’t it? If I got my app

out now it would tell me

where they are, what’s

available. It has got your

history in there so I know

that if I am going to the

airport or I am just going

home it is all there so I can

just click it immediately and

it will give me the fare

estimation and it is all

done.

 Also it [Uber] is

international. It is

everywhere.

The opportunity and challenge for black cabs

OPPORTUNITY

 Iconic, traditional values

 Part of the image of ‘London’

 On the tourist to do list

 The Knowledge

 A treat

 Transparent, honest

 Vehicles everyone can use

Taxi & Private Hire focus groups: impact of apps 25

CHALLENGE

 Old fashioned, out-dated

 Only available in central London

 For visitors not Londoners

 Increasing use of sat-navs in place

of the knowledge

 Only for special occasions

 Relies on meters and cash

 Mixed attitudes of drivers towards

people with disabilities

I did not know who Uber were until there was a massive taxi gridlock with all the taxis objecting to them

so that is what made me go and explore and that is when I found out about Uber.

I feel sorry for the black cabs because they are just not moving with the times and like they are an

institution. And if I had money I would travel in black cabs the whole time.

The sharing economy and UberPOOL

 While there was some evidence of the growth of

the sharing economy, it appears only to be

reaching a minority as yet.

 One participant had tried giving up their car and it

would appear that apps such as Uber has helped

them maintain a car free lifestyle.

 There was some awareness of UberPOOL and

some interest in using it, but also a lot of

scepticism.

 Given a sufficient price-differential this reluctance

to share personal space is likely to be eroded,

albeit probably quite slowly unless there’s a

significant disruptive event which forces a change

in attitudes.

Taxi & Private Hire focus groups: impact of apps 26

 We just thought why don’t we get rid of

the car and see how we get on without

it. It started out as a bit of an

experiment really and we have not

missed it, not at all.

 I just feel like I might be vulnerable. I

just would not feel comfortable sitting

in a car with a stranger on my own.

 I would not want a stranger coming

outside my house at a certain time of

night.

 I think it is a great idea if money is the

issue. If money isn’t an issue I certainly

wouldn’t bother. It [saving money] is

the only driving force to use the Pool.

 I think the less cars we use the better so

if we can car share we create less

[environmental] damage.

Concluding comments

 The impact of taxi/minicab booking apps is complex and uncertain, in part because their very rapid growth

has not yet allowed the market to settle down. The growth has been led by Uber which is in a dominant

position within this market, and may be difficult to dislodge.

 Addison Lee has also managed to establish a strong market position which its app can help it to maintain.

 Currently, the black cab apps such as Gett have made relatively little impact, and this is mainly because,

unlike Uber, they are basically just a method of booking a black cab:

 It is important to recognise that ‘Uber’ is becoming a new form of private hire, distinct from other

minicabs. This is a consequence of various features of Uber such as the way fares are paid, the

information which is provided to users, and the ratings system which is perceived to be a way of

ensuring quality standards are maintained.

 In terms of the future, one point to note is that Uber has demonstrated an ability to be agile, so can be

expected to react quickly to emerging trends and issues, including competitor activity.

 It does appear that by leveraging new technology, Uber has expanded the overall private hire market (and

potentially the overall travel market), as well as capturing demand from other modes including bus, walk,

and black cabs*.

 In terms of the future for black cabs, while there is an affection for them and a desire to see them survive,

there is also a need for them to modernise, albeit in a manner which doesn’t compromise their core values.

* Based on CSS data (Q3 2015/16) 15% of minicabs trips booked by an app were abstracted from black cabs

Taxi & Private Hire focus groups: impact of apps 27

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