Global Distribution Systems for the Taxi_PHV Industry

WHITE PAPER
Global Distribution Systems
for the Taxi/PHV Industry.
March 2021

Global Distribution Systems
Global Distribution Systems (GDS) are common practice in the Travel & Hospitality
industry, responsible for about a third of all airline tickets sold in 2019. Despite some
controversy on fair competition and sovereignty (Amadeus started in Europe as an
alternative to the dominant American SABRE), the market is now mature, balanced
in a healthy competitive environment between various global and regional GDS
platforms.
GDS platforms have contributed to Travel & Hospitality growth by providing a
convenient, real-time access to structured information allowing for better decision
making by travel agents and, ultimately, customers (demand side). Today GDS’ are
used by operators (supply side) to widely communicate availability and maximize
revenue opportunities on various distribution channels using state-of-the-art yield
management strategies.
Similar digital distribution systems have been implemented in Retail, referred
to as “multi-channel listing solutions” and feeding marketplaces and shopping
comparators straight from retailers’ inventory and price management backends.
Savvy ecommerce players are multichannel and multiplatform, even the greatest
consumer brands, because they know it’s more efficient to look for buyers where
they are, instead of trying to make them move from their favourite channels.
At Karhoo, we believe that the Taxi/PHV industry will be no exception and will adopt
global digital distribution with at least two immediate benefits: (1) open distribution
will disrupt the disruptors and prevent market consolidation around a limited set of
global e-hailers capturing all of the passenger demand and aggregating all of the
drivers (2) open distribution will ease the accessibility of regulated local companies
for customers who ask for more convenient and socially distanced transport in a
post-Covid world.
OUR ADVICE TO FLEETS
Embrace change and test alternative
channels. Early adopters climb the
learning curve ahead and build a
competitive advantage for the long run!
Global Distribution Systems for the Taxi/PHV Industry
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Global Distribution Systems
A GDS for the Taxi/PHV industry
There are some particularities that a GDS should provide for the Taxi/PHV industry as
a ride is not really a simple one-off booking. First, the final fare is not always known at
booking time due to metered fare for taxis and extras. Then, the customer experience
standards have been raised significantly by the e-hailers; nowadays passengers expect
vehicle tracking and payment on mobile, which a lot of local fleets without an app
cannot offer.
HENCE, A GDS FOR THE TAXI/PHV INDUSTRY SHOULD PROVIDE:
• Immediate requests and advanced bookings
• Structured information to display and compare offers, not only on price
• Quotes and pre-authorisation of the corresponding payment
• Eventual payment of the final fare after ride completion
• Detailed billing and payment information, incl. local taxes
• Cancellation policies and corresponding fees
• Live status of the ride
• Vehicle tracking, starting when allocated to the ride
• A public API to propose the offer inventory (supply)
• A public API to visualise and consume the offer inventory (demand)
TYPICALLY, A GDS FOR THE TAXI/PHV INDUSTRY SHOULD CONNECT:
• Mobility Services Sellers or Supply Partners:
- Fleet dispatch systems (DMS) managing availability, locations and prices
- Other aggregators willing to participate in connected business
• Mobility Services Buyers or Demand Partners:
- Travel agencies and transport operators looking for transfer options
- MaaS providers offering taxi/PHV on top of other mobility options
- Hospitality companies willing to create better experiences by organising mobility
for their customers
- Corporations and government purchasing large volumes of taxi/PHV for their
customers/users or employees
Karhoo has been pioneering digital distribution for the Taxi/PHV industry since
2017 with the funding from Groupe Renault, member of the worldwide Renault
Nissan Mitsubishi alliance. We believe the Karhoo Mobility Exchange platform, a
digital marketplace dedicated to mobility, is the most advanced GDS supporting the
requirements listed above.
Global Distribution Systems for the Taxi/PHV Industry 3

Global Distribution Systems
Unifying the fragmented technology environment
in the Taxi/PHV industry
Karhoo developed technical integrations to dozens of Dispatch Management
Systems (DMS) platforms worldwide, which all work with different APIs. Just in March
2021, we added a record 25 new DMS integrations to their list, ahead of the highly
expected post-Covid travel industry recovery!
Here are examples of the shared DMS (cloud-based solutions for multiple operators)
and dedicated DMS (in-house technology) currently integrated with Karhoo.
We also directly contracted with thousands of fleets using these DMS solutions,
so they can sell their services through Karhoo without changing anything to their
equipment, systems and operations.
Thus we can provide buyers with a unique API interface to purchase or resell taxi/
PHV services through an end-to-end, booking to billing, digital process, regardless of
which DMS gets involved.
Global Distribution Systems for the Taxi/PHV Industry 4

DMS Platforms
Buyers on our platform are powerful brands which want to natively embed mobility into
their own websites and apps; Karhoo has developed connectors with their User Identity
Management and Loyalty Programme systems, which allow for example to earn and
burn loyalty points with mobility services. It creates a win-win situation for our partners:
brands enhance the customer experience with seamless mobility and fleet operators
have more opportunities to sell their service.
On top of “translating” individual DMS interfaces into a unique demand-side interface
that Demand Partners can use, Karhoo is providing useful services to DMS and fleets:
• Protection against high request volumes with low quote-to-booking rates through
Machine Learning quote predictions, using DMS resources only for requests that have
the best chances of converting.
• Location and address enrichment, a software layer using reverse geocoding that
is able to normalise any address and local common points of interests to lower
processing costs and reduce the issue of ambiguous pickup locations.
• Settlement orchestration, providing consolidated and detailed reports on rides per
distribution channel (Demand Partner) and safely organising the financial flows in
multiple currencies.
• Management tools using AI technologies to proactively spot any outliers and possibly
automatically correct it too, hence reducing the amount of billing errors to be
corrected manually.
New data-driven distribution strategies
When Global Distribution Systems come to represent a third of transactions in the Taxi/
PHV industry, similar to what is happening in other industries, participating operators
will need to learn how to best position their offering to maximise sales using pricing,
differentiating propositions and evidence of passenger satisfaction.
Fortunately there are many books on how to sell on digital marketplaces, listing best
practices for retail that will also be applicable to mobility. For instance, in retail, shipping
costs and return policies make a difference; in mobility, extras like waiting time charge
and cancellation fees may play a similar role.
One of the important benefits of working with a marketplace is that it delivers tons of
data. Here are a few examples on how data will help optimise business performance:
• Identify geographical zones or time periods when supply does not match demand on
a regular basis, leading to new opportunities of business,
• Understand where and when competition is getting a greater share of the markets
where you operate, even with a fine granularity, so you can decide on whether to
compete or retreat,
• Benchmark or augment your own data with overall market metrics coming from the
marketplace to increase the reliability of your analysis and make sure you operate with
the right service, pricing strategy and financial performance.
Important note: Karhoo will never share any personal passenger or driver data
between marketplace partners, just aggregated market data.
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How much does it cost?
Global Distribution Systems would typically take a percentage commission on
booking, but the Karhoo model is different: end-customers are actually paying our
fees for the convenience of one-stop booking mobility together with their travel
package with their preferred brands.
Hence we’re able to pay out taxi and PHV operators their full expected fare, which
makes Karhoo distribution model cost and risk free.
Conclusion
We believe that Global Distribution Systems will apply to the Taxi/PHV industry and
process 20 to 30% of bookings, the same way it happened in other industries, led by
early-adopter companies building a competitive advantage for the long term.
GDS should not be seen as a threat but as an opportunity to maximise choice and
buying options for passengers. Many customers would not consider chauffeured
services, but do when they are offered alongside a relevant purchase.
Karhoo makes it easy for Taxi/PHV companies to sell their own branded local services
on hundreds of websites and mobile applications used worldwide to book and
manage their trips. Simplified global distribution for local suppliers can protect the
industry from dominant players looking to own or brand the entire value chain from
passengers to drivers. In much the same way that independent hotels continue to
thrive in an open digital marketplace.
Fleets should consider expanding their reach through GDS. And DMS Service
Providers should prepare their solutions for connected business, helping their clients
climb the learning curve of distributed channels
.
Learn more about the global distribution of taxi / PHV services on
popular platforms cumulating hundreds of millions of active users.
info@karhoo.com | www.karhoo.com
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