Self-Building a Ride-Hailing System Vs Outsourcing: Which is Most Cost-Effective?

MobyteLab Post   •   Jan 10, 2020

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The taxi business sector has witnessed a startling evolution within the past few years. Previously, the industry had witnessed a decline, especially with a rise in the number of privately owned cars. However, the introduction of the ride-hailing system completely changed the taxi business sector for good. Uber was the first ride-hailing company to take giant strides in the industry. Subsequently, other ride-hailing systems and companies have sprung up, with the numbers increasing daily. According to Pew Research, “about 51% of people between the ages of 18-29 have used ride-hailing services at some point in their lives.”

This surge in the ride-hailing industry has led to a subsequent rise in competition. Today, ride-hailing companies are trying to stay ahead of the competition with the introduction of new trends and technological tools.

Thus, for taxi businesses to thrive in today’s age, owners have to look towards creating and developing a taxi app. This demand for taxi apps has led to the existence of a paradox for taxi business owners: to self-build or to outsource? Although no clear answer exists for this paradox, it is important to carefully study the intricacies involved in self-building and outsourcing. 

What Building a Taxi App Entails

Developing a taxi app involves months of backbreaking work and a huge chunk of money. To create a ride-hailing app such as Uber, you must be ready to create an appropriate budget and be armed with a team of highly efficient developers. Typically, creating a ride-hailing app involves creating two separate applications: the passenger app and the driver app. 

The passenger app is created specifically for passengers to book rides, make payments and locate their drivers. On the other hand, the driver app is designed for drivers, just like the name implies. 

Taxi app development involves phrases such as

  • Web development; 
  • Backend development; 
  • Design;
  • iOs and Android development; 
  • Management and quality assurance. 

These phases or stages consume human and financial resources and could take months to complete. To cut costs, taxi business owners could consider creating an app for just one platform (eg Android devices). However, this is not advisable because taxi apps ought to be accessible on all devices and platforms to rake in profit and ensure customer loyalty. 

Pros of Self- Building a Ride-Hailing System 

When it comes to taxi app development, a lot of taxi business owners are more amenable to the idea of creating a taxi management software by themselves. While this may seem strenuous and almost impossible, self-building a ride-hailing system has its perks and advantages. The advantages of self-building taxi management software include:

  1. Greater control: Creating a taxi app or ride-hailing software by yourself allows for greater control over the development process. Here, you can meet your exact specifications without any hitches or misunderstandings. It equally provides room for a process where taxi business owners can create ride-hailing software that suits their exact needs and desires. 
  2. A choice team: Self-building a ride-hailing system entails choosing your team of developers. Thus, you can choose to work hand-in-hand with familiar developers whom you have worked with before and who understand your work ethics. As such, self-building a taxi management software enables taxi business owners to create a conducive work environment with a team of their choice. 
  3. Staying on top of the project: Self-building a taxi management software allows taxi business owners to be aware at each stage of the development process. When you self-build, you can stay up-to-date each step of the way and get regular progress reports. 

Cons of Self-building a Ride-Hailing System 

Although developing your ride-hailing software can be advantageous, this option could also be potentially dangerous for your taxi system. Self-building a ride-hailing software has several cons or disadvantages which could be difficult to cope with in the long run. Some of the cons of self-building your ride-hailing software include

  1. Lack of expertise: Self-building taxi management software could be disadvantageous in terms of expertise and knowledge. One’s team of developers may lack the necessary knowledge, tools, and expertise needed to create a fully functional app. At the end of the day, you may end up developing an app riddled with bugs and glitches. 
  2. Inability to adapt: Technology is constantly evolving, with new software development tools being created each day. Thus, taxi business owners who choose to self-build may find it difficult to adapt to these technological changes and advances. 
  3. Cost of development: Although the taxi management software may run without hitches for a while, it may develop glitches in the long run. Thus, the taxi business owner could end up spending a huge chunk of money on software development. 

Self-build taxi app dispatch, the taxi app solution

What Does Outsourcing Entail?

Outsourcing taxi application development involves hiring a software development company or a  team of developers to handle the building of the taxi app. This option is quite convenient and cost-effective. Hence, the taxi business owners prefer this option when it comes to building a ride-hailing system.

Pros of Outsourcing

Outsourcing to software development companies has a large number of advantages and as such, is beneficial to taxi business owners. Thinking of outsourcing? Here are some advantages to this option:

  1. Convenience: Outsourcing to software development companies is considerably more convenient than self-building a taxi application. With this option, you can relax and have a team of experts to create a fully functional application for you. Thus, this option is quite seamless and convenient for taxi business owners.
  2. Expertise: Outsourcing to a software development company helps to ensure that you have a fully functional app at the end of your project. This is because these companies are made up of a team of highly trained and skilled developers who are equipped with the right tools for software development. Thus, you can be sure of getting a fully functional app without glitches or bugs.
  3. Reduced costs: When you self-build or develop your ride-hailing application, you end up spending a huge chunk of money on software development. Because the taxi application in question may become defunct within a few years, thus requiring finances to fix and develop. On the other hand, outsourcing to a software development company ensures that the entire process of development is adequately taken care of without extra charges.

Cons of Outsourcing

Taxi management software, Taxi app development, Taxi dispatch system – Outsourcing

One major disadvantage of outsourcing is that it offers less control over the project to the taxi business owner. As a taxi business owner who has decided to outsource to a software development company, you may have less control. In some cases, progress reports may not come as frequently as you would like them to come. Thus, a lot of taxi business owners are kept in the dark during the software development process.

In the same vein, it may be difficult to work with an unfamiliar team of developers who may not be conversant with the business owner’s work ethics.

Another major factor that causes taxi business owners to shy away from outsourcing is the pricing system. Software development companies could overcharge business owners thereby causing them to spend outrageously on the ride-hailing app development. In the same vein, it could be difficult and challenging to find a software development company that can fit into one’s budget and time frame. 

Tips for Building a Ride-Hailing System 

A close look at existing ride-hailing applications will reveal that building a taxi application involves certain intricacies and complexities. Thus, taxi business owners must create an application that can withstand the existing competition without fizzling out. To build competitive ride-hailing software, one would have to incorporate certain features and tips. Want to create a competitive taxi management software? Here are some tips which you might find useful:

  1. Create a native app: A large number of people use smartphones in their daily lives. For example, in America, about 81% of the population use smartphones. Thus, to create the perfect taxi application, business owners need to ensure that the app in question is compatible with mobile devices such as iOS, Windows and Android devices. In the same vein, the need for a native app is fuelled further by the fact that taxi applications need features such as GPS. These features can be found on mobile devices. Hence, every ride-hailing software must be compatible with these devices to enable users to incorporate these features when using the app. Finally, it is important to note that users are five times more likely to stop using sites or apps which are not mobile-friendly. 
  2. User-friendliness: One major feature which users look out for in any application is user-friendliness. A recent survey carried out by Impact Bnd showed that “about 51% of users have revealed that a bad mobile experience reduces the chances of them engaging with a company.” Thus, when creating a taxi application, business owners must take the necessary steps towards ensuring that the app is user-friendly. This involves using a simple interface with no complexities whatsoever. 
  3. Seamless transactions: Taxi business owners should endeavor to make the transaction process as seamless as possible. Thus, the booking system must be swift and easy to use. In the same vein, appropriate and seamless payment options should be incorporated into the application. 

Whether one is outsourcing or self-building a taxi app solution, the necessary steps must be taken to ensure that the application is user-friendly and compatible with all devices. This will help to retain customer loyalty which in turn, could cause the application to stay ahead of the competition. 


Ride-hailing app development is a complex process that involves a lot of time, effort and finances. However, every taxi business owner is faced with two options. Self-building or outsourcing. While a good number of taxi business owners prefer to self-build, more and more startups as well as big gamers are getting to recognize and appreciate the benefits of outsourcing.

More often than not, outsourcing leads to the creation of a fully functional app. It is also considerably more convenient and consumes less time and financial resources in the long run.

Find out more  How to Choose a Suitable Taxi Dispatch Software Provider, click here


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By | 2020-01-14T10:06:08+00:00 January 10th, 2020|iOS App Development, Mobile App Development, On-demand Service App Development|

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