SMART COMPANY: First cab off the rank

The taxi business has been fare game ever since New Zealand deregulated the industry back in the 1980s. Resorting to Rafferty’s rules and free-for-all competition made life tough for many cabbies.
So too have ballooning fuel prices and, more recently, increasing customer demands that taxis respond to their corporate carbon footprint considerations.
Luckily for some, however, off the rank came TaxiCharge New Zealand with smart taxi management software program that is delivering solutions for both drivers and cab users. And its clever management problem-solving approach is providing compelling evidence that responding positively to environmental pressures can pay handsome dividends.
Auckland-based TaxiCharge general manager Mark Lines now runs $100-million business which, despite the global financial crisis, boosted turnover by 19 percent and profit by 46 percent last year. The company now has 90,000 cardholders which is, according to Lines, up almost 30 percent in year.
TaxiCharge was started in 2002. At its heart is software program developed originally by fleet management company Cardlink Systems. Lines worked for Cardlink and, when it sold its specialist TaxiCharge application to five of the country’s cab company clients, Lines went with it.
The company has perpetual licence to use the Cardlink software and Cardlink retains seat on the TaxiCharge board. “But,” says Lines, “the product is now vastly different from what it was when we took over.”
Indeed, the company has developed one of the most sophisticated taxi industry transaction and management reporting applications in the world. The constantly enhanced software is, Lines says, the result of the company’s response to demands for greater accountability, reporting accuracy, transparency and cab customer demands for environmental efficiency.
“These factors are all major issues for taxi users and their managers,” says Lines . “As result we have developed 60 reporting options, each of which can be customised for the client.”
The five original taxi company partners that own TaxiCharge has expanded to 22. The taxi companies concentrate on their core business of providing rides and TaxiCharge delivers the supporting cab company back-room infrastructure, including billing, reporting and managing driver payments.
The demand for in-depth reporting is expanding rapidly, according to Lines. The recession has seen more companies using cabs. “But increasingly, the companies that use taxis want to monitor their spend more closely,” he adds. “And they want to know how environmentally efficient our cab companies are.”
The company’s reporting and management system has created “virtual” paperless communication with its customers. Its 60 different reports include details of out-of-hours travel, non-compliance travel reports, weekend travel, “yet to be billed” transactions, year-to-date spend by cost centre and card holder, GST consolidated invoices and special event billing.
It also provides reports on kilometres travelled to measure greenhouse emissions, because cab users are getting picky about the efficiency of the vehicles they ride in.
Corporate customers, in particular, want to know if TaxiCharge’s members’ environmental practices are aligned with their own environmental strategies. Consequently, TaxiCharge is now re-certified under the carboNZero small enterprise programme from Landcare Research. It is also working with all its taxi company partners on their certification programmes.
TaxiCharge reports on fuel and energy use through distance travelled details have helped fleets develop planned cab replacement programmes, with many of them moving to hybrids.
“Corporate clients in particular demand sustainable vehicles for their employees,” says Lines. “Client and consumer expectations are changing and we have had to change with them.”
Not that Lines objects. His own employees have, he says, bought into the need to think and act environmentally. Their “green” activities within the company have cut TaxiCharge’s own operating costs by 19 percent over the past year. “If we are going to offer environmentally certified services to our customers, we must walk the talk ourselves,” he adds.
While the original drivers behind the success of TaxiCharge were increased efficiency and profitability through better management and reporting systems, it has moved on to re-focusing cab companies based on better customer service and meeting expanded demands.
“TaxiCharge is brand now,” says Lines, “and as brand it tells you certain things about the services that it offers. We see it as means of significantly increasing the market appeal of our members.”
Smart software and increasingly clever in-cab technologies are the stock-in-trade of this enthusiastic and innovative business. But the quality of the reporting relies on SmartCard being provided with accurate information at the time of the ride. To do this, TaxiCharge has installed 2500 POS terminals in its partners’ cabs.
And employees who use cabs when maybe they shouldn’t will become thing of the past, says Lines.
“The TaxiCharge card has virtually eliminated fraud-based expenditure such as unsanctioned employee entertainment,” he adds. “Transaction details captured by cab’s POS terminal makes us market leader when compared with other payment methods.”
Lines is wedded to new technology as the route to managing and growing his business. “We are get-up-and-go company that is applying professional business analysis, focused research and development and the understanding that what the customer wants is what we need to deliver. And new technologies allow us to do that.”
The company’s 22 taxi partners include Auckland Co-op and Wellington Combined, two of the country’s biggest fleets. All up, they push through 300,000 transactions month.
The company has taken its software long way from the original. It is, according to Lines, “just going through the next iteration of development”.
Under new business model, all profits made by TaxiCharge are distributed back to the company’s partners. “We pay all our profits out to the partners every month,” says Lines.
Where does TaxiCharge go next?
Wherever it is, Lines sees the third generation of in-car terminals now being installed as spear-heading the direction. “They will be more intelligent, will embrace more forms of payment and provide more information,” he says.
How the company will use that information is not yet clear but, there seems little doubt Lines knows where the company is headed.