Analysis taxi service in Australia

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Analysis Taxi Service in Australia

Analysis Taxi Service in Australia

E-business defines the integrated use of information technology to conduct core business activities (Grefen 2010). E-business has become increasingly prevalent with its growth being tied to the widespread adoption of the internet. According to Baltzan, Lynch, and Fisher (2015, p. 97), approximately 45% of the world’s population will be Internet users by the end of 2016. The taxi industry in Australia provides evidence of the increasing importance of e-business where new entrants are leveraging information technology to disrupt the sector. The traditional taxi service providers will have to change their business strategies to suit the modern world. The advantages of e-business will include reductions in cost, expanding operations, and improving effectiveness in an industry that is under considerable threat (Baltzan, Lynch and Fisher 2015, p. 97). The key to making e-business work for the taxi service industry is for firms to develop strong, recognisable brands. Taxi operators will also need to engage in an extensive marketing campaign to change its current image. There is also the need to come up with a clear revenue model and innovative websites and apps for direct contact with customers.

The E-business model that has been adopted by sections of Australia’s taxi industry is the B2C model. This is where taxi operators sell their services to customers over the internet (Boone & Kurtz 2010, p. 221). The threat of new entrants has forced taxi service providers to adopt existing apps like GoCatch and ingogo to facilitate online bookings (The Sydney Morning Herald 2014). In this case, the apps can be considered to be intermediaries that connect drivers to customers for a commission. It is recommended that the taxi service industry expands its adoption of the B2C model in the future. This can involve increased usage of third-party solutions like Ingogo which connects drivers with passengers. Alternatively, the taxi industry can opt to deploy an independent platform to avoid the costs of relying on intermediaries.

The use of E-business models will increase sales over the next 12 months in various ways. First, customers will have an easier time requesting for taxi services as opposed to standing in the street and waiting for taxis that happen to be nearby. The increased ease will result in more trips per day, leading to higher revenue for taxi service providers. The use of E-business will also improve sales through increased safety measures. Traditional taxis have been unattractive, particularly to women who are alone, due to safety issues. The implementation of an E-business model will result in the availability of detailed information on each driver and taxi operator. The increased transparency will ease safety fears thereby increasing the uptake of taxi services. The use of E-business will also generate higher sales in the next 12 months because service providers will be able to acquire detailed information on customers thereby enabling the personalisation of services. The personalised services will boost customer satisfaction and increase sales over the next year.

In addition to connecting businesses to customers, E-business strategies can also facilitate easier dealings with suppliers. In this case, the taxi service providers will employ a B2B strategy to undertake planning, forecasting, and purchasing. When it comes to challenges, the use of B2B might be faced with the issue of significant differences in the existing systems. Additionally, both the B2C and B2B models will expose businesses to security issues. First, there is the threat of losing private consumer data like credit card information and addresses. This issue is important since the B2C model relies on gaining the absolute trust of customers. Loss of private information also exposes companies to legal liability. The larger transactions between taxi firms and their suppliers will also expose the industry to the risk of fraud, leading to loss of vast amounts and the disruption of the supply chain. As stated, the taxi industry is facing significant competition from new entrants. The use of B2B and B2C poses the security risk of losing secret data to competitors.

Business Intelligence and Decision Making

According to Grossman & Rinderle-Ma (2015, p. 1), business intelligence (BI) can be defined as an automated system developed to circulate information across the different sections of organisations. The aim of BI is to collect and deliver actionable information that improves decision making in business. The competitive nature of Australia’s taxi service industry means that traditional taxis will need to embrace BI to ensure that business decisions are made using accurate, up to date data. When it comes to implementation, the key to making BI work for the taxi industry is extensive research. Taxi operators will need to learn how other industries have deployed BI systems and draw lessons from these experiences. The research will allow the industry to determine the types of data that will be collected and the level of accuracy that is needed. The other key to BI implementation is an understanding of what the users will need. The users of BI data can be classified as strategic, operational, and tactical users, and each will require different types of information (Krishnan 2013, p. 143). The other key to success is the selection of qualified partners who have experience in deploying BI systems. Finally, the information that is generated from BI data should be used in an effective manner by thousands of users as the use of this information is more important than the collection of data (Watson and Wixom 2007, p. 96).

As stated, BI data is used by operational, tactical, and strategic users (Krishnan 2013, p. 143). Additionally, each of these levels of BI data can be used to make important business decisions. Operational data focuses on day to day processes and can include customer complaints and changes in demand across regions of operations. At the operational level, demand data can be used to redirect taxis or to hire more temporary drivers. Data on complaints can also be used to reprimand drivers and to offer free rides to customers as a way of guaranteeing customer satisfaction and protecting market share. The operational decisions to redirect taxis or hire additional drivers will be implemented through the use of live data. Low-level operators will monitor and optimise business processes as they change to ensure maximum profitability. The operational decision to reprimand drivers will also be taken by low-level managers who will have a system of recording infringements and taking appropriate action.

Tactical BI focuses on collecting historical data to assist in making medium-term decisions that cover a few days to months (Krishnan 2013, p. 143). Examples of tactical data would include weekly trends in revenue, complaints, employee performance, and vehicle efficiency. At the tactical level, trends in revenue can be used to change pricing levels. Similarly, data on vehicle efficiency can be used in the creation of purchasing contracts and budgets for new vehicles. These decisions will be implemented by mid-level managers who will monitor revenue across the areas they supervise. This will allow for regular changes in pricing to achieve tactical goals like keeping competitors out of a market and offering discounts to access new markets.

Finally, strategic data concentrates on long-term business goals. Examples of strategic data in Australia’s taxi industry would be economic forecasts, social and political trends, technological advances, and market share data. Data on social and political trends can be used to make long-term decisions on whether to invest more funds in the business. BI data on market share and technological advances can also be used to make decisions on mergers and acquisitions to increase overall business efficiency and reduce costs. Additionally, long-term data traffic data can be used to identify trends leading to predictions on routes that tend to have minimal traffic. Such a decision will be strategic given that the firms will save costs, improve efficiency, and maximise customer satisfaction. When it comes to implementation, senior executives in the profession will negotiate with firms that seek to attain higher levels of efficiency. These firms can begin sharing data and adopt a single point of contact for customers. The completion of mergers and acquisition will then lead to the full integration of BI systems to realise maximum benefits. The decisions on avoiding traffic will be implemented through intensive training programs for drivers. When it comes to implementing the investment decision, economic trends and advances in technology will be used to determine whether the firms have good prospects of growth.

References

Baltzan, P. Fisher, J. and Lynch K., 2015. Business-driven information systems. McGraw-Hill Education.

Boone, L.E. and Kurtz, D.L., 2009. Contemporary business 2010 update. John Wiley & Sons.

Grefen, P., 2010. Mastering E-business. Routledge.

Grossmann, W., and Rinderle-Ma, S., 2015. Fundamentals of Business Intelligence. Springer.

Krishnan, K., 2013. Data warehousing in the age of big data. Newnes.

Technology can do for taxis what it has done for public transport,2014. The Sydney Morning Herald, viewed 17 July 2016 <http://www.smh.com.au/comment/smh-editorial/technology-can-do-for-taxis-what-it-has-done-for-public-transport-20140413-zqu7w.html>

Watson, H.J. and Wixom, B.H., 2007. The current state of business intelligence.
Computer, 40(9), pp.96-99.