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How to Create a Taxi Service App

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In large cities with traffic and few parking spaces, it is becoming more and more popular to use public transport, taxis, and bicycles. The most popular are taxi services, which allow people to quickly get from one place to another without looking for a parking space or wasting time waiting for public transport.

Today, taxi service apps have fully replaced traditional taxi services. That is why, if you are the owner of a taxi-ordering business or startup, the taxi app is what you need to keep your company from going bankrupt. Unfortunately, having a taxi application is not enough to defeat the competition. You need something that will distinguish you from other taxi apps and attract more loyal customers. In this article, we will explain how to create a taxi service app and what features it should necessarily have.

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Taxi Apps Market Overview

The market for taxi applications is developing very rapidly. Every year the income from such software only increases. According to a study in 2019, revenue from taxi programs in the United States was almost $ 15,000,000,000. It is also worth mentioning the number of users which is also growing exponentially. In 2020 in the United States, this figure has reached 100 million people.

More details can be found in the table below

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It should be mentioned that there are huge competitors in the taxi software market. In the US, companies like Uber and Lyft have the largest share of the market, with 70% and 30% of the market respectively. However, you should not be disappointed, because by creating software with a good interface and excellent functions, you can become successful even in a competitive market.

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Guide for Creating a Taxi App

If you have a great business idea but don’t know how to create a taxi service app, this article is for you. We made a detailed list of actions that would help you along the way:

Define Your Starting Point

Before starting to create your taxi app, you should think about several factors. The first is determining what exactly you need. Do you already own a well-established taxi business and want to supplement it with the development of software, or do you want to create from scratch and only plan to attract drivers? You need to think carefully about this because each option differs in complexity, cost, and other factors.

Choose Your Business Model

The next step is to determine which business model you are going to use. There are two business models in the taxi industry. The first is that you create a company that hires drivers and pays them their salaries. The other is a model similar to Uber. The latter gets fees from drivers for the rides they took from the taxi orders base. After that, passengers pay for the trip to the direct drivers.

Conduct a Profound Market Research

Before starting any business or program, you should understand and know the market you are going to enter. You must carefully analyze the market, understand who your potential competitors are, trends that are now taking place in the market. It’s also worth researching your competitors’ apps and looking for flaws that customers are unhappy with. You can improve these gaps in your program, making it better than others.

Also, before starting to create a program, you should understand the scope that you want to cover. Depending on this, you need to decide on a payment system that will best suit your program. With this information, the development team can accurately estimate the scope of work and the approximate cost.

Select a Financing Source

Every idea needs the means to implement it. You must decide at what expense your taxi app will be created. You can create a program using your funds, and you can also use the investor’s funds. The second option is much more profitable in terms of business prospects.

Choose a Monetization Model

If you want your taxi app to be profitable, or at least pay off, you should consider how best to turn your taxi booking application into a valuable business. Here are some of the most popular monetization model for a taxi app:

  • Commission from passengers: you can add a 20-25% commission to the price of each trip;
  • Cancellation fees: you can put this type of payment as a penalty for canceling a trip by a passenger;
  • Service fees: you can charge drivers a flat monthly fee for the opportunity to get orders from your app;
  • Third-party promotions: you can also partner with various well-known brands and provide them with advertising services. That is the model that Uber operates and partners with such companies as Coca-Cola, Hilton, and Spotify. You will get paid to promote your brands, while companies interact with users by offering them various promotions and gifts;
  • Advertising: you can charge a commission for displaying ads in your app. Probably the best option is a fixed pay-per-click or impression.

Create an MVP

Before starting the development of a taxi app, it is worth considering all the possible user stories and understanding which ones are important and which are not worth paying attention to. Then the best option would be to create a Minimal Viable Product (MVP). With it, you can collect a certain number of user reviews, make the necessary changes and improvements. You must proceed iteratively to win the market as planned.

Necessary Features for a Taxi App

As with any software, several functions are vital for the proper functioning of the application. It’s the same with taxi apps. Below are a few features that should be part of any taxi app.


If you want your taxi software to be safe and easy to use, you must add the user registration function with a one-time password. The user enters his phone number, receives a random set of digits, that is, a password that is automatically inserted into the program. This process takes only a few seconds and increases security several times.

Maps, GPS, and Routing

GPS is an essential part of any taxi program as it is used to locate a person. With the help of maps, the user can easily find the car he needs. Also, it is these functions that help to calculate the duration of the trip, its distance, price, as well as build a route.


Nowadays, adding various payment methods to your program has become an integral part of every software. Usually, most users utilize credit cards and therefore do not use cash. You must make sure that the user himself can choose the payment method he needs, and can also change it at any time.


Summing up, it should be said that in a world where everyone has a smartphone or tablet, taxi companies must have their software. By developing a taxi app, you will become much closer to your users, because you will be able to satisfy their needs, as well as attract thousands of new customers, and increase your income several times.

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James Musoba
James Musoba
Studying Africa's startup and technology scene. I always look forward to discovering new exciting inventions and vibrant entrepreneurs.

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