This article is part of Your Allies’s do-good entrepreneurship series. We profile entrepreneurs and their business concepts and give our view on their marketing approach. There’s always something to learn from real startup and business growth experience!
1) What was your motivation to set up Taxi for two and what mission have you set yourself with it?
Taxi for two was launched in February 2012, and was born from idea I had the previous year. It seemed crazy to me that loads of people queue up together at taxi ranks in city centres, at airports and many other places, but then often get into the taxi on their own. Surely there should be a way of making more efficient use of the taxis available, by helping people share and combine their journeys? This not only saves people money but reduces the number of overall journeys taken and so has an environmental benefit too.
So I started exploring the idea of a mobile-based solution to this problem. It had to be mobile rather than PC/laptop based, because people often don’t plan their taxi journeys in advance so the only device they have available to them at the point of need is their mobile (or potentially their tablet, but often these are not “connected” when out and about).
At the same time I came across the nascent but growing area of Collaborative Consumption, the broad term used to describe the social trend towards sharing and swapping rather than buying and owning. It was great to see loads of other companies and services springing up around this idea, from car sharing to clothes swapping to errand running. This convinced me there was something in the idea of taxi sharing – if people are prepared to share cars, clothes, loft storage and more, then why not share your taxi journey?
Your Allies says… We commend any business able to break into the mainstream, and add to the sharing economy. A service that makes better use of existing, finite resources while giving customers a more cost-effective option is inspiring stuff. That combination doesn’t guarantee success though. Taxi for two understood how their service would be used and matched that with the right distribution channels.
2) What makes Taxi for two unique, unlike any direct and indirect competitors?
There are many taxi apps on the market right now, but most of them focus on booking a taxi itself. We believe that actually booking a taxi is the easy part, which is why we focus purely on providing a platform for people to try to find others to share their taxi with. Also by not having to partner with taxi firms we are able to quickly scale geographically, rather than only being able to operate where we have taxi partnerships. In theory Taxi for two can be used anywhere in the world right now.
Your Allies says… The challenge of how to scale up geographically, fast enough (i.e. before someone else beats you to it), will ring true for many P2P entrepreneurs. Taxi for two has sidestepped one potential hurdle by finding a niche that doesn’t require partnerships which come with potential limitations. Another clever move.
3) What is your business strategy to accomplish that mission?
Our strategy is to focus on areas where there is a density of people looking to take taxi journeys, such as train stations, airports, music and sports events etc. We also believe there’s an opportunity around workplaces such as large offices and business parks.
In the short term our strategy is to offer the service free of charge to prove there’s a demand for taxi sharing. If and when we prove this we will look to implement a pricing model whereby it is still free to post a journey and to search for others, but there will be a small (circa 50p) charge to make contact by calling or messaging someone to arrange to share.
Your Allies says… To prove the need exists and grow a user base starting out with a free offer is a good move. There is risk involved however as making money is being postponed. However, if successful in growing and monetizing a large user base – without losing big percentages of users not willing to pay for a previously free service – it could pay off. Once people have tried, tested and bought into the service – provided it’s good and still offers value – applying additional charges, within reason, can work. Step out of line by (over)charging or not clearly explaining additional pricing and the risk of customers dropping off increases.
4) What marketing strategy have you put in place to reach your business objectives?
As already mentioned our service is currently free whilst we test demand, prior to adopting a model where searching and posting a journey will be free but with a charge to communicate via the platform.
We have tested marketing initiatives such as leaflets at train stations, online (social media) and PR – all have had some impact in driving awareness of Taxi for two, but we need to do more targeted / local-level marketing over a sustained period around key locations.
Your Allies says… Testing different marketing channels and initiatives is a must for startups to find those that work best and deliver in the most cost-effective way. It’s essential that this is done once a defined marketing strategy and objectives are in place so that testing centres around those very objectives. For startups offering a brand new concept, it’s even more crucial because no one else has done exactly what they’re doing. Lots can be gleaned then copied or adapted from businesses that are alike, of course and testing doesn’t have to mean splashing the cash. Plenty of cost-effective localised off and online marketing can be tested, particularly via social media, SEO and PPC channels.
5) What was your biggest challenge in developing Taxi for two so far and how did you overcome it?
The biggest challenge we have faced (and still do) is driving customer awareness on a local basis, so that when someone searches for a journey share there is at least one other person looking to make a similar journey at a similar time – the “coincidence of wants” necessary to make any collaborative consumption business model work. We are still trying to crack the marketing formula around this…and obviously we’re operating on very tight budgets which makes it even more challenging. We are implementing some new “group” functionality which we hope will encourage people to build their own taxi sharing “micro-communities” around locations such as offices and train stations – we think we can leverage this and encourage people to invite others so that communities grow organically.
Your Allies says… Many peer-to-peer businesses face this same challenge of pulling together enough people with the same need at a local level, to make their concept feasible. Partnering up with businesses which are present in the right locations and can help increase awareness and reach, is one route to seriously consider. As well as teaming up to achieve shared goals, putting marketing budgets together can help that precious startup investment go much further and open up bigger marketing opportunities. Incentivising happy customers to spread the word and bring friends and family on board can also help ramp up user numbers. For Taxi for two, focusing on those taxi-congested areas is without doubt the right move. Identifying which social media people use when looking for and/or waiting for a taxi would be a route well worth taking.
One final word… Taxi for two is also keeping it in the sharing economy family by using Task Runners to source a flyer distributor in the London Waterloo area. More proof that Taxi for two really knows how to make peer-to-peer work.
Ready for even more inspiration from real-life business experience? Check out the complete entrepreneurship series!
Photo credit: Ryan McGuire / gratisography.com, published unchanged