The Lyft is an example of a popular cab company in San Francisco offering on demand services to its customers. There is a community application introduced that enables city residents know the exact location of the taxi and the amount of time it will take to get there. This application has become very useful as it keeps customers from being stranded at the sidewalk wondering when the taxi will get there. The introduction of this application has given rise to on demand services that involves the sharing of cabs to cut down on cost (Gustin 2012). It became convenient for customers to share a cub that was closest by instead of having to wait for their own cabs to arrive, which in real aspect may take a long time. This new business opportunity has however, given rise to more cabs on the streets just to make an extra dollar. The problem is that some of these taxicabs are not licensed and simply slap a taxi tag on their vehicles and start calling themselves taxicabs. This has certainly created a lot of insecurity on the streets as anyone may be a victim of a sexual predator or a carjacker anytime thinking he or she is just taking a cab ride home (Gustin 2012).
Not any person can simply put up a sign, call himself a contractor, and start applying for building permits. A license is a mandatory requirement in a bid to do so. Nobody can just open a bank and start charging high interest rates, there are rules and regulations that need to be followed. This is why the City of San Francisco regulated the number of taxicabs on the streets to avoid many cab drivers from chasing the little money available that more often than not creates reckless drivers (Gustin 2012).
Market segmenting refers to having the market divided into groups of separate markets that have the same wants or needs (Atsmon, et al, 2012). The company divided the market into distinct groups that have unique needs or wants with the products or services offered. The cab company has divided its market based on geographic and demographic segmentation. On the geographic front, it involves dividing the market according to nation, states, regions, countries, cities, or neighborhoods. To get ahead of competition, the can company has distributed its cabs to cover as many neighborhoods as possible across the city. The distribution depends on areas that are densely populated which are likely to have more customers and more business opportunities as compared to areas that are scarcely populated where most of the people in that region may own cars (Atsmon, et al, 2012).
The other type of segmentation s demographic segmentation where the market is divided based on age, family income, occupation, education or nationality (Atsmon, et al, 2012). It is evident the economy is suffering and even high income earners now want to save a bit more just in case of another recession. It is for this reason that many residents have no problem of sharing the same cab as long as they are headed in the same direction. The customers are able to split the cost of the cab fare making transportation much cheaper. The fact that a resident may get any cab that is within his vicinity headed in his direction is not just economical but very convenient. It saves on time of having to wait for a cab that may be miles away and helps to save on time. It is also very secure as nobody likes to be on the streets at wee hours of the night (Watson, et al, 2009).
This service has become very attractive to low income earners and to college students who can now afford to ride in a cab as opposed to always taking the train. This has certainly created a business opportunity for many taxi drivers who are able to collect more money in a day by picking up residents who are on their route, as long as they are headed in the same direction. Most residents have appreciated this new service. However, a number of people who are a bit opposed to this new form of transportation. These are mostly the senior citizens and the successful business people who would not like to share a cab with a complete stranger just to save on cab fare. Their skepticism is mainly based on the security concerns of a cab just stopping at whichever location to pick up a person. Their argument is fare and a customer should have the right to refuse to share his cab if he feels the situation is not secure. These are just some of the behavior and reception this new service has attracted. The service may also be time consuming because of having to take a busy street or a longer route simply because the cab driver wants to pick up an extra customer (McArdle 2012).
It is evident that the new service is not very appealing to the different class of people. It is more attractive to the young and low-income earner but not very attractive to the people with high income who think the service is simply disruptive and time consuming. People who have embraced this service have a number of similar characteristics such as, they have a low income, are mainly students, live within the same residence or a few blocks from each other, rarely use cabs because of the high prices but their number of cab usage has increased as a result of the service. The other segment of consumers are the high income earners who are busy, barely stay near each other, have little patience and prefer paying high cab fare than share their cab and have been unreceptive to the new service (Allsop, 2011).
The mode of payment has also attracted more customers who may not have liquid cash or do not like carrying cash with them all the time. The cab company allows its customers to pay through a voluntary pal-pal system. In addition, a resident may request a ride by simply sending a message to the company that makes sure a driver is in route and arrives on time. Using the GPS application, the customer can monitor the driver and identify his exact location and the time he will take to get there. This is certainly a new improvement as compared to the old-fashioned way of calling the cab company to ask when the driver will get there; they always received rude and unwelcoming responses (Cooper, et al, 2010).
It is however, important that the government regulate the number of cabs on the streets and make it a priority that all cabs must be inspected and all cab drivers issued with licenses to provide taxi services on the streets. This will make the people feel more secure as compared to getting into just any car that asserts itself as a taxi (Gustin 2012).
References
Allsop, R. (2011). Taxi mess an old, stubborn failure of government. Institute Of Public Affairs Review, 63(2), 22.
Atsmon, Y., Kloss, M., Smit, S., & Matson, E. (2012). Parsing the growth advantage of emerging- market companies. Mckinsey Quarterly, (3), 10-14.
Cooper, J., Mundy, R & Nelson, J. (2010). Taxi!: Urban Economies and the Social and Transport Impacts of the Taxicab. Burlington: Ashgate Publishing, Ltd.
Gustin, S. (2012). All Hail the New Taxi Apps. Time, 180(17), 18.
McArdle, M. (2012). Why You Can’t Get a Taxi. Atlantic Monthly (10727825), 309(4), 30.
Watson, F, Monroe, P & Wilts, A. (2009). A Multiperiod Dynamic Model of Taxi Services with Endogenous Service Intensity. Operations Research, 53(3), 501-515.
