Sebastián Barrios
Founder and CEO
View from the Top

Inventive Approach to Improving Long.Maligned Taxi Services

Tue, 09/15/2015 - 15:36

Q: What led to the original decision to create Yaxi, and how has the company evolved over the last three years?

A: We came to the realization that the technology being used by Mexican taxi operators was far behind that used in other countries. We decided to build a system that would allow Mexican taxi drivers to shift from communicating with phone calls and radio transmissions, to utilizing the more advanced tools that were already being used the US or Europe, which allow operators to design trips and communicate with their headquarters through their smartphones. Yaxi has changed quite a lot since it first began operations in Mexico. The first version of the application simply had a button that requested a taxi, and we, as a team, would call a taxi stand. We would then provide the customer with the taxi’s information, essentially simulating the experience. This gave us an idea about whether the idea was worth pursuing or not. We quickly found out that the demand was completely overwhelming us, and that we could not handle every request with that methodology. Consequently, we decided to solve the problem by connecting taxi drivers directly through our system, so a phone line was no longer needed. This new system allowed the user to have direct contact with the operator, to be aware of their specific location, have the closest driver pick them up, and improve the overall service experience. The eventual system upgrade that followed enabled customers see the operator’s name and license plate number, as well as the estimated time of arrival. It also opened up the possibility to call the assigned operator, leave a service review, keep a record of your previous trips, ask for tax deductible billing, and perform electronic payments with a credit card or PayPal. In order for us to achieve this, we had to get taxi drivers on board, set up bank accounts for them, and make sure that everything was properly established to ensure the operator’s peace of mind. Although electronic payments are not a big trend in Mexico, we managed to bring in most of our payments through credit cards. The application’s innovations are an ongoing process, and we just released the application’s newest version that will let users know how much their trip is going to cost beforehand. Additionally, there are some innovations that users do not necessarily see, like driver security checks, quality and security tests, driver follow- ups, traffic feedback through our driver’s information input, fraud protection systems, artificial intelligence programs that check the overall status of Yaxi’s system, alarms, and monitoring systems, among other things.

Q: How many vehicles does Yaxi have in its current network of taxis, and how do services differ for customers?

A: We have 6,000 drivers within our platform, but we expect this number to rise twofold or threefold in the next couple of years. Provided that there are 140,000 taxi drivers in Mexico City alone, we want to eventually have 100,000 operators within our system. Although those numbers seem high, we believe that this is achievable on a national level. Right now, we are operating in some of the highest demand cities in the country, such as Mexico City, Guadalajara, and Hermosillo, not to mention some small experiments in Monterrey, Queretaro, and Cancun. Regardless, our main focus and our biggest market is Mexico City. Due to the way our business is established, coupled with the usefulness of the service, we are definitely looking at expanding into other markets. As a result of Mexico’s different tariff usage, which is set by the government, there are different car segmentations based on the customer’s selection of a given rate. The price is representative of the quality of the car, and we give our users the freedom to choose between these different options. We have seen that customers give more importance to availability rather than price, so we have added a selection option that focuses on the proximity of the vehicles.

Q: What are your strategies to expand your presence in Mexico and abroad?

A: The company is close to being profitable, and after reaching that point we can start expanding internally. Our biggest competition comes from centralized taxi services and from people asking for taxis on the street. In order to combat this, we have invested in online and TV advertising, but we recognize that word of mouth is the most effective way to attract users. We found out that many taxi applications have done successful in-country expansions, but almost all companies that have gone to foreign markets have failed, apart from Uber and Easy Taxi. Our strategy for the moment is to strengthen our presence in the Mexican market, and perhaps move beyond our borders into foreign markets through an alliance.