The Power of App Aggregation: Evolution in the Brazilian Taxi Industry

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Brazil’s taxi market is rapidly evolving with the introduction of premium ride services. OnFrontiers gained insight on the changing landscape during a recent conversation with Leo Tang, former CEO of the Brazilian branch of Easy Taxi, the first online taxi company to penetrate the Latin American market.

Tang explains that app-driven car-for-hire companies are gaining a competitive edge in the wake of markets opening up in São Paulo and Rio de Janeiro. As the power of app-aggregation in transportation companies has been realized, investors have begun setting their sights on private companies.

The transition has not necessarily been a smooth one – protection for traditional, publicly subsidized taxi companies remains an obstacle for private operators. Yet after navigating a series of regulatory measures imposed by the government, including a temporary ban on private transportation services in both Rio and São Paolo, Uber has managed to gain a foothold in the market.

For now, Brazil’s native app-aggregator, 99Taxis, remains competitive. The company initially secured its position as a market leader in São Paolo through aggressive discounting.

Wappa Taxi has appealed to Brazil’s corporate clients, capitalizing on big businesses’ tendency toward big spending on taxi rides. Wappa’s model combines packages for corporate clients with a clean, user-friendly interface design, and has accrued a critical mass of drivers with plans to extend its services to individual public clients in the near future.

So how will these top competitors continue to thrive?

Long-term success, Mr. Tang says, will depend on companies’ ability to scale up driver fleets to meet growing demand, to stay ahead of the technological curve in app capabilities and to focus on the overall quality of the passenger experience. Mr. Tang also distinguishes between traditional taxi company users and private car-for-hire companies, though: “it is important to remember that people who use taxis are not necessarily the same people who will use a company like Uber,” Tang says. From this perspective, private car companies are generating new demand, and the possibility for a hybrid market comprised of both private and public companies still exists.


About the OnFrontiers Expert consulted for this article:

 Leo Tang is the former CEO of Easy Taxi Brazil. Prior to this he served as Managing Director of the company’s East Asian operations, developing marketing and sales strategies across Thailand, Korea and Hong Kong. To speak with Leo or similar experts, contact us at hello@onfroniers.com.

 

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