Operator Innovation: Taxis, baby, taxis!

In the second in my series of Operator Innovation posts, I’m looking at Taxis.

Why isn’t there a ‘taxi’ button in every Orange phone?

Seriously — think about the possibilities?

Buy an Orange contract and you’ll get prioritised access to over 450 fully approved and vetted taxi firms across the UK. That’s one firm in every major town and city in the country. [I don’t know, I’m just making that number up, but run with me.]

Ok. Run with me some more. Let’s explore it…

Assume that every Orange phone has the taxi functionality directly integrated into the operating system or pre-installed as a default app.

The service offers the following features:

* Automatic integrated geolocation (Bluevia-style) continuously — you’ll never waste your battery on GPS because the Orange network knows precisely where you are, by default of owning the network
* Fully integrated with the dispatch desk at every taxi firm
* No need to speak on the phone, just point-and-click — when you order, the app will show the colour, number plate and driver photo
* Every taxi meets the minimum OrangeTaxi™ standard (less 2 years old, fully insured blah blah)
* All drivers have been fully background checked
* No tipping allowed, tips are integrated into the fare for your convenience
* Guaranteed priority access: You’ll be assigned the next free taxi ahead of standard customers
* Bypass the cashpoint! All fares are billed straight to your Orange mobile account
* Optional Orange SafeHome™ service will automatically notify parents of successful pickup and provide location status updates on demand
* Taxi fares can be billed to the main account holder (i.e. Mum or dad)

Now assume that my 450 firms figure was pretty accurate for the sake of sample revenue calculations.

Let’s say the service generates 200 fares per day per firm. Assume each fare is a tenner in value. That’s £900,000 in total gross revenue per day.

Assume Orange has negotiated 9.8% commission on every fare. Across the UK, that’s £88,200 revenue per day total. For doing comparatively nothing and adding huge value to your customer-base.

Factor this across 365 days and we’ve got just over £32m in revenue.

But it’s not about the revenue. It’s most definitely not. It’s about the value. It’s about the utility. It’s about the fact you actually do MORE for me than just let me phone people. It’s you, Mr Operator, using your network resources and transactional capabilities to connect your customer with a critical day-to-day service requirement. And guess what, it’s in your area of expertise. This is the stuff you’re good at.

It’s not just about direct revenue generation. It’s about revenue assurance. It’s about 10 million parents thinking, ‘Yes, I want my little Johnny/Jemima to have that SafeHome™ thing so we’re buying/staying Orange.’

Can you imagine the marketing potential of something like this? And the defendability? The competitors would be left eating your dust.

And the work you’d do integrating the taxi firms, the payments, the infrastructure — it can be easily, easily duplicated to extend to other areas.

But.

Oh, there’s a but.

There’s a massive but. No senior operator executive who cut his or her teeth plugging wires into boxes and twiddling with screws will ever go for it.

“It’s not core,” will, I’m sure, be a primary response.

“It’ll cost too much,” is a very, very safe bet.

“I don’t see the key benefits,” will be a safe belief.

It’s ok though. This is yet-another-market-possibility that the operator, by dint of doing nothing, has surrendered to the over-the-top players.

The operators like to think that they have options. Countless executives reading this post will have already filed it into the ‘interesting’ folder. (That is, they won’t do anything about it — ever — UNLESS a new CEO from, say, Coca Cola arrives demanding new thought)

Doing something like this is certainly an option for the operator. Like mobile payments. Or helping banks out with identifying customers who’re making transactions abroad. Or a million other things. The operators like to think they’ve got options.

No.

The pace of innovation and the pace of basic consumer demand is skyrocketing ahead.

Services like Get Taxi and others are moving to close down this ‘option’.

One day, the operator will wake up and find that all these ‘possibilities’ are completely walled-off. The only thing we need from you is the connectivity, thanks very much.

Until, that is, LightSquared come along with a better, focused service offering branded by somebody who knows what they’re doing a lot better than you.

Meanwhile, carry on.

– – –

You can read my first post in the series here:

Operator Innovation 1: Why can’t my operator talk to my bank when my card declines abroad

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4 Responses to Operator Innovation: Taxis, baby, taxis!

  1. Taxichex July 21, 2011 at 11:35 am #

    The reason you can’t just do this, is to do with the Private Hire Laws in the UK. On Tuesday, reforms to amend these laws were put in place but at the minute, booking a Private Hire through a mobile is only available via individual apps!!!

  2. Ewan July 21, 2011 at 12:00 pm #

    That is not why operators haven’t done it though. They’re too busy
    perfecting their broad irrelevance.

    I know nothing about private hire laws. What I do know is that a mobile
    operator is amongst the most trusted of our service providers. They also
    employ some very talented folk who could sort this out.

  3. Taxichex July 21, 2011 at 12:06 pm #

    There is a company i know of that is in the middle of finalising something along these lines (no it’s not mine) but it genuinely is the law that has stopped this from having gone any further so far. When you look at Delta Taxis in Sefton who have around 1700 cars and are petitioning for a Merseyside wide plate and then you look at Addison Lee who have circa 3000 cars in London (and their own app available free from the App Store) – you can see that the technological advances are being made. The point is that the archaeic laws governing Taxis and Private Hire are the main stumbling block. I’ve attached a link for you to see what was released by a Parliamentary Select Committee on Tuesday –
    http://www.parliament.uk/busin​ess/committees/committees-a-z/​commons-select/transport-commi​ttee/news/tph-report/

  4. Ewan July 21, 2011 at 12:23 pm #

    Potentially something that the operators could wade into and fix with their
    lobbying millions….

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