How digitalisation is affecting local taxi companies

The taxi industry has been particularly affected by digitalisation in recent years. Whereas previously you had to look for free taxis on the roadside or order one by phone, digitalisation has brought about a ground-breaking change in the way taxis can be selected and ordered: via a mobile phone app.

With the introduction of taxi apps, digitalisation has taken the mobility industry to a new level. Taxi apps allow customers to conveniently select and order a taxi with just one click on their smartphone. In addition to convenience, this digitalised version also offers efficiency, as passengers are offered the nearest available taxi drivers and can follow their route on a map at the same time, which significantly reduces the perception of waiting time. Payment of a price defined before the journey is also made via the app, which reduces uncertainty and makes tedious negotiation of the price unnecessary. Another advantage is that the apps are available in the user’s own language, which means that tourists do not have to communicate about the destination, price and waiting times in a language they are unfamiliar with.

This development has fundamentally changed the taxi industry and created many advantages for taxi drivers and passengers. For drivers who work with apps, it means better capacity utilisation and freedom of choice to accept or decline a request. At the same time, passengers benefit from reduced waiting times and a better user experience, as it is possible to order a taxi anywhere and at any time. However, while digitalisation has undoubtedly revolutionised the taxi industry, it also brings new challenges and difficulties for traditional taxi companies and self-employed taxi drivers.

Digitalisation as competition and legal hurdles

Due to the introduction of digitalisation and the advantages described above, it is becoming increasingly difficult for local taxi companies to find taxi drivers. Another reason for the shortage of staff is the difficult economic situation in which the taxi industry has found itself since the pandemic. Tourism and nightlife came to a standstill, which also meant that customers stayed away and demand has only been increasing slowly since then. Additional competition for the taxi industry comes from night-time public transport services such as the Moonliner.

In addition to the difficult circumstances in which the taxi profession finds itself, the high legal requirements for taxi drivers are an obstacle to quickly employing new staff. Before the taxi profession can be practised, an aptitude test must be passed, which tests language and local knowledge as well as knowledge of taxi regulations. A good reputation is a further criterion for the issue of a driver’s licence. The requirements and the aptitude test are perceived as very strict and the preparation is time-consuming, which is one of the reasons for the recruitment problems. In order to support taxi companies in the city of Bern in their struggle to find staff, the cantonal government has issued a two-year trial ordinance as of 1 April 2023, which makes it possible to issue a provisional taxi driver’s licence. This means that prospective taxi drivers can take the aptitude test within six months and are already allowed to drive during this time. This will make it easier for them to enter the profession and simplify recruitment for companies.

While the taxi test ordinance cannot make the difficult economic situation in the taxi industry disappear, it does provide assistance for local taxi companies in Bern. Whether the ordinance will achieve the promised successes, what it means for self-employed taxi drivers and whether it could have an impact on the use of driving services is currently being analysed by the BFH Wirtschaft in the “Evaluation of the Taxi Experimental Ordinance” project.

Call: Take part in the taxi study now!

How satisfied are you as a customer with the taxis in the city of Bern? Researchers at BFH are conducting a survey on behalf of the Canton of Bern’s Department of Safety. They wanted to find out how satisfied taxi customers are and what expectations they have of the taxi industry in the city of Bern. The results are very important to the authors of the study. Let them know your opinion and click through the survey. It takes a maximum of 6 minutes and the researchers thank you in advance.

About the project

The project to evaluate the Taxi Driving Licence Ordinance was commissioned by the Canton of Bern to the New Work Institute at the BFH in order to find out to what extent the introduction of a provisional driving licence has an impact on customer satisfaction. In the course of this project, it will also be determined whether the requirements regarding language level, local knowledge, knowledge of regulations and good reputation for taxi drivers are still up to date. Or could we imagine simply using translation apps and navigation systems in this regard, in line with digitalisation?

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AUTHOR: Andreas Sonderegger

Andreas Sonderegger is a professor at the Bern University of Applied Sciences in Economics and a lecturer at the University of Fribourg. He researches and teaches in the fields of cognitive ergonomics, human-computer interaction and work and organisational psychology. He is the founder and owner of Youser GmbH, an agency specialising in UX evaluation and design. Before joining BFH, Andreas completed his doctorate at the University of Fribourg, worked in various positions in the field of human resources and was 'Head of UX Research' at the EPFL+ECAL Lab.

AUTHOR: Renée Favre

Renée Favre completed her Master's degree in work and organisational psychology at the University of Fribourg and is a project collaborator at the New Work Institute at BFH Business School.

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