Generating Demand for Ride-Hailing: You Cannot Make People Travel. Or Can You?

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Juraj Atlas

November 21, 2019

3 min read

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Taxi from inside

M

ajor cities around the world are on a crusade against road congestion and traffic-induced air pollution, expanding public transport systems and supporting cycling and other urban-friendly means of transport. I dare predict that they are bound to fail unless they take care of two core ingredients. For one, there needs to exist a viable, convenient door-to-door alternative to driving a private car. Second, a mindset shift of the population gets underway. Perhaps surprisingly, ride-hailing and taxi operators may be able to drive this trend of sustainability – while generating demand for their services effectively (solving their own pain) and growing.
 

Ride-hailing operators are hitting a marketing conundrum.

Transportation service consumption is a very time-bound need and cannot be instigated externally. I either need to get somewhere or I don’t. I cannot change my consumption need just because somebody sent me an offer. Time-limited special offers and discounts will hardly persuade anyone to hop on the bus or call a taxi if they do not intend to go anywhere. For one, the offer needs to come at the right time. And then, the offer needs to be attractive enough to make me want to change my original plan from travelling via a subway to taking a taxi.

For incentives to work, the offer must be aligned with the need to consume the service. Appropriate timing of sales communication by ride-hailing operators based on reliable data has the potential to increase customer engagement. However, to unlock the potential, they need to know the customer’s travel intent.

 

Your 60 trips per month

Each of us makes approximately 60 trips per month on average – on foot, by taxi, in a private car, by public transport or micro transit. At the same time, we leave a data track as we use a variety of applications, digital services, and connections along the way. If we pool all this data, we can draw insights on immediate needs as well as travel patterns over a longer period.

Of these, only some 3-6 trips per month are made by taxi / ride-hail service. So it is only 3-6 times that users open a ride-hailing app. That’s ride-hail operators’ visibility into 5% of transportation intents of their users. 

Only some 3-6 trips per month are made by taxi / ride-hail service.

On the other hand, if we get used to using public transport, we usually open a journey planner app 10-20 times per month.

If ride-hailing operators could attract engagement that currently goes to various public transport journey planner apps, they would be equipped with the necessary data and insights to be able to better predict customers’ transportation needs, and, consequently, stimulate demand by precision-targeted and well-timed communication.

Comparison of ride-hail operators and transit route planners

According to estimates, relevant offers and insight-based incentives can double the ride frequency for a ride-hailing operator. That would translate into a 10-25% revenue growth. That’s definitely something worth considering.

Relevant offers and insight-based incentives can double the ride frequency for a ride-hailing operator.

 

The solution?

And good news to the end. Based on the challenges described above, Mileus helps ride-hailing operators to offer their clients two new services: 

  1. Public transportation journey planner integrated into ride-hailing operator app directly
  2. Automated intermodal trip planning, combining public transport and ride-hailing

Mileus enables a serendipity mode for users. Even though a passenger is not ready to order a taxi and is set to use public transport, knowing that within the app there could be an interesting offer waiting for them combining public transport and a cheaper taxi ride, they will start opening the ride-hailing app more and more often. And the ride-hailing app becomes an app of first choice for most of their users’ transport needs.

Want to learn more? Hit me up at juraj@mileus.com or on LinkedIn.

.

 

For more blog posts and urban mobility updates, follow Mileus on LinkedIn:

Share on facebook
Share on twitter
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M

ajor cities around the world are on a crusade against road congestion and traffic-induced air pollution, expanding public transport systems and supporting cycling and other urban-friendly means of transport. I dare predict that they are bound to fail unless they take care of two core ingredients. For one, there needs to exist a viable, convenient door-to-door alternative to driving a private car. Second, a mindset shift of the population gets underway. Perhaps surprisingly, ride-hailing and taxi operators may be able to drive this trend of sustainability – while generating demand for their services effectively (solving their own pain) and growing.
 

Ride-hailing operators are hitting a marketing conundrum.

Transportation service consumption is a very time-bound need and cannot be instigated externally. I either need to get somewhere or I don’t. I cannot change my consumption need just because somebody sent me an offer. Time-limited special offers and discounts will hardly persuade anyone to hop on the bus or call a taxi if they do not intend to go anywhere. For one, the offer needs to come at the right time. And then, the offer needs to be attractive enough to make me want to change my original plan from travelling via a subway to taking a taxi.

For incentives to work, the offer must be aligned with the need to consume the service. Appropriate timing of sales communication by ride-hailing operators based on reliable data has the potential to increase customer engagement. However, to unlock the potential, they need to know the customer’s travel intent.

 

Your 60 trips per month

Each of us makes approximately 60 trips per month on average – on foot, by taxi, in a private car, by public transport or micro transit. At the same time, we leave a data track as we use a variety of applications, digital services, and connections along the way. If we pool all this data, we can draw insights on immediate needs as well as travel patterns over a longer period.

Of these, only some 3-6 trips per month are made by taxi / ride-hail service. So it is only 3-6 times that users open a ride-hailing app. That’s ride-hail operators’ visibility into 5% of transportation intents of their users. 

Only some 3-6 trips per month are made by taxi / ride-hail service.

On the other hand, if we get used to using public transport, we usually open a journey planner app 10-20 times per month.

If ride-hailing operators could attract engagement that currently goes to various public transport journey planner apps, they would be equipped with the necessary data and insights to be able to better predict customers’ transportation needs, and, consequently, stimulate demand by precision-targeted and well-timed communication.

Comparison of ride-hail operators and transit route planners

According to estimates, relevant offers and insight-based incentives can double the ride frequency for a ride-hailing operator. That would translate into a 10-25% revenue growth. That’s definitely something worth considering.

Relevant offers and insight-based incentives can double the ride frequency for a ride-hailing operator.

 

The solution?

And good news to the end. Based on the challenges described above, Mileus helps ride-hailing operators to offer their clients two new services: 

  1. Public transportation journey planner integrated into ride-hailing operator app directly
  2. Automated intermodal trip planning, combining public transport and ride-hailing

Mileus enables a serendipity mode for users. Even though a passenger is not ready to order a taxi and is set to use public transport, knowing that within the app there could be an interesting offer waiting for them combining public transport and a cheaper taxi ride, they will start opening the ride-hailing app more and more often. And the ride-hailing app becomes an app of first choice for most of their users’ transport needs.

Want to learn more? Hit me up at juraj@mileus.com or on LinkedIn.

.

 

For more blog posts and urban mobility updates, follow Mileus on LinkedIn:

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