The current Corona crisis is already hitting the industry in a fundamental shift, which we highlight below.
Losses and existential fears
On the one hand, competition has already increased sharply in recent months. On the other hand, the Corona pandemic is currently having an ever greater impact. Both factors in combination are causing lasting economic damage within the core business, which the industry is finding difficult to contain.
Both passengers and taxi drivers currently have understandable fears. A massive decline in passenger numbers - resulting in major revenue losses - is already having the first existential consequences and is leading to much frustration and resentment in the industry. The reasons for this are manifold:
- no more tourists
- no more concerts
- cancelled fairs
- no business trips: hardly any trips to the airport or train station
- general fear of the population to go out of the house
In many cases, especially for small businesses or entrepreneurs, the pure existential fear takes hold. Due to the lack of reserves, it is likely that many small taxi companies will have to file for insolvency within a very short time, unless compensation can be provided - initially by the state.
The slump in business is clearly noticeable and will continue for some time - see 5..
It is possible that we are dealing with a more stable situation in the rural regions than in the cities, due to the non-existing or hardly existing alternatives in mobility.
Established and situational thinking
The industry itself has been too focused on conservation in its thinking in recent years and months, and has paid too little attention to necessary innovation.
There is no overarching body capable of coordinating within the industry. Each company or group pursues its own agenda in order to secure a share of the market as best it can.
In particular, the uncertainty with regard to the coming weeks is currently causing a kind of shock paralysis and is paralysing the industry's ability to act for future-oriented thinking. This blocks the view of the existing opportunities to emerge stronger from the crisis - see "Potential" below.
Thus, there are already positive trends in Hamburg, which support our statements. The local taxi industry offers since 16.03.2020 a Purchasing service for risk groups on. The first cooperative ventures - described below - are also already being established and are already cushioning the sales losses to some extent.
Nevertheless, the perception of the industry is almost exclusively focused on the current problem. It would be advantageous to direct the perception now also to the desired future and to work towards it - see 4...
The current crisis and the industry's entrenchment strategies in combination are not very conducive to solution-oriented action. The situation can be compared to a supertanker that is heavy and inflexible - and currently needs a lot of information for a future strategy.
Up to now and also at present (see above), there has been little creativity with regard to possible or necessary changes. New ideas from competitors have been tried to be prevented - or copied half-heartedly.
Planning and strategy
The industry must now rethink all the more and orient itself towards new possibilities, some of which have been outlined here. There is no alternative if we want to survive in the future and use the crisis as an opportunity.
To the industry's credit, it should be said that it already has a lot more in the pipeline that is not yet known to the outside world - and was only revealed to us in the course of the discussions regarding our results. This confirmed the connectivity of our ideas and concepts, which we developed as "outsiders" - one of the strengths of our type of optimal idea development / ideation.
As already indicated, there is a certain potential in the industry to implement necessary changes. The massive of the industry, which has also been described, must now be overcome in order to implement the feasible new opportunities as quickly as possible.
There is more to the industry than meets the eye from the outside.
There is a huge opportunity for the taxi industry to take on new tasks in the current crisis. This would enhance the image of the sector and give it an "innovative touch" - see 3 and 4. The taxi industry, as a supporter of the whole population in a massive crisis, will lead to a sustainable improvement of its image.
It should be emphasised that, despite the decline in passenger transport described above, demand for conventional individual transport appears to be generally stable.
Overall, the demand for taxi journeys may fluctuate through different phases: The pandemic may even lead to an increase in the number of taxi journeys over the entire duration of the pandemic.
Taxi driving could also regain importance, e.g. by the fact that, compared to other mobility providers, the trust of taxi passengers in the old familiar prevails again.
Individual transport options may be more and more in demand, as they suggest more safety from the virus than, for example, public transport. However, this requires the further development of measures and innovations described here: see 2 "Perceived safety".
Currently, there is an oversupply of taxis - especially in Berlin. Due to the new players on the market - such as Uber or Moia - the overall supply has expanded in recent months. The crisis could lead to a market adjustment of overcapacities in the industry. The revenue per taxi (or vehicle) could improve significantly as a result of this shakeout after the crisis.