3 steps to outperforming established competitors in 2022
Entering a ride-hailing market that already has established players isn’t easy. However, we are confident that you can still get your share of the market - if you do your research and learn from it. In this article, we go through plenty of the things you can do to make sure you understand and outperform your competitors.
It’s no secret that the ride-hailing business can be tough. This is especially true for the geographical areas where established competitors already exist. Of course, Uber, Lyft, or Grab aren’t everywhere. Not even a company like Uber exists everywhere. But they are in many, many cities. And one of these cities might be exactly the one where you also want to build your ride-hailing business. Fear not: you can still get your share of the market.
Here are 3 steps to building a successful ride-hailing business in a location with the established competitors:
1. Conduct market research
Market research is the first step in building a ride-hailing company. Well, it’s the first step to having a dream! Market research has the following goals:
- Establishing market size
- Understanding the state of infrastructure in your geographical area
- Understanding government regulations
- Uncovering market leaders
- Uncovering customers’ pain points
- Uncovering drivers’ pain points
- Understanding social issues in your geographical area
- Understanding the level of Internet penetration and the popularity of other media types
For any business to become a success, it should be a long and thorough process. Ride-hailing industry is not an exception. Here are just some of the things you can do to make sure you understand the market you’ll work with.
Gather information from free reports
Often, information on ride-hailing market size, as well as ride-hailing market trends and top leaders is provided by databases and consulting companies for free. Turn to your old friend Google to find those and extract the information. You’ll see sites like Statista and Data Portal that have a lot of relevant information.
Pay attention to taxi-related information: what are the preferred payment options? Are credit cards used in this geographical area, and if so, to what extent? What are the service types people use more frequently? Perhaps, it’s the area where motorcycles are more popular than cars - then, your ride-hailing app can focus on that.
However, also look at reports that will give you an insight into society. The end report that you’ll have on the market should cover the financial behavior of the locals (the use of credit cards), media consumption (Internet usage, TV audience, radio audience, social media networks breakdown), and any other insights that seem relevant.
Gather information from news sites and blogs
News sites, blogs, and forums are also resources that will help you analyze the ride-hailing market trends, understand the pain points that exist within it, and choose your unique value proposition. For example, existing competitors in the ride-hailing market could only offer economy-class services, which would mean that you can provide luxury services.
News sites and blogs will also help you understand societal peculiarities that might come in handy. For example, you might discover that women in that given area frequently experience harassment by the drivers. This might lead you to create a women-for-women service.
2. Conduct competitor research
By the end of your competitor research, you should have a clear understanding of how you can do better and/or what you can do differently. You’ll have a list with the description of each market leader in your geographical area, the description of their services and their marketing tactics, their advantages and disadvantages, and so on. Using the companys’ reports, open sources, and real conversations with real people, you’ll have to find out which market share each of the competitors has, how many cars they have, which services they offer, and what is their pricing.
Here are just some examples of what you can do as part of your competitor research:
Look through reviews on app stores
Reviews are an incredible source of information for anyone looking to create something better. No one is quite as informative as the angry customer who has been wronged by the company. However, your task isn’t to focus on specific shocking cases - it’s to outline the trends. What are commuters most unsatisfied about? Drivers’ behavior? The apps’ UI? The inability to cancel for free? The fact that drivers don’t wait for longer than five minutes? And what are drivers most unsatisfied about? Fake promises that they’ll earn a million dollars? Lack of some useful features?
Collect the complaints in a hierarchical order, based on their frequency, and see what you can improve and later use in your branding and marketing.
Ride as a passenger with competitors' drivers
If you have a chance, spend some time in your competitors’ cars talking to their drivers. This could be an absolutely perfect way to conduct interviews and perform what can only be described as qualitative research. You’ll find answers to all the questions that bother you and learn so much about pain points that you might not have thought of. You’ll know how to better attract drivers in this region, which problems they face, what their bosses use to nudge them to stay, and the inside issues you’ll never learn otherwise.
Become a driver of your competitors’ company and talk to the passengers
If you want to go above and beyond in your competitor research, there is something else you can do: become a driver of your competitors’ company and talk to the passengers. This is the best possible way to find out what the passengers of your competitor’s ride-hailing service think about this company, which problems they face, which services they lack, and so on.
Conduct focus groups
Of course, there is a more traditional way to conduct research: focus groups. Talking to people in focus groups gives you more structure and more freedom: you can ask any questions you like, record your conversations, and analyze the results.
Analyze competitors’ ads
Use the Facebook Ads library and similar sources to find out which ads the company is currently running. This will help you understand their marketing tactics, target audience, and what they focus on when selling their services. You’ll find out which marketing channels they use and get an idea of which works best for them.
3. Create a unique value proposition
Once you’ve done your research and understand the market, your competitors, and your target audience, you have to come up with a unique value proposition. When it comes to starting a ride-hailing business, you have two options that are not mutually exclusive:
- Your ride-hailing app can solve customers’ pain points (even not the most obvious ones!) better or in a different way than your competitors.
- You can choose a narrow group of people with unsatisfied needs and cater your services to them.
In both cases, when planning to outperform your competitors in ride-hailing, you should aim to provide benefits to customers and drivers that your competitors don’t provide, approach the goal creatively, or bring something new and different to the market. You should focus your marketing efforts on the feature that makes you stand out from the competition - on something only your services can provide. Whether it’s a taxi exclusively for animals, a luxury taxi, or simply a taxi service with the friendliest drivers.