Why all the taxi booking apps must have an automated driver billings and payouts?

Why all the taxi booking apps must have an automated driver billings and payouts?

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The advent of taxi-aggregator apps like Uber and Lyft has transformed the taxi industry forever.

We all know how easy and convenient it has become for a customer to book a cab. But are the benefits of a taxi management software only limited to customers and drivers? No, it’s not.

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A robust taxi booking app can be used by all type of taxi companies whether small or big to make their operations smooth and efficient. It plays an important role in efficient financial management too.

With an automated driver billing and payout, you can manage all your finances efficiently. But why is it important to have an automated driver billing?

Why automated drivers billing?

We are living in a digital era where most of the things around us are digital and automated. The rise of taxi booking apps is a clear indicator for that. So, it only makes sense to automate most functions of a taxi management software.

Now let’s talk about the drivers billing process for any taxi company. So, you have developed your own taxi booking app for efficient management of the business.

The app helps you and your drivers to get instant requests, real-time tracking, GPS-enabled navigation, reports & analytics, and many more.

The app covers most of important aspect of your taxi business; however, it does misses a key aspect, without which you won’t gain any profit.

I am talking about the driver billings. Without automating your driver billings or payout you won’t get the fair share of your commission.

The driver will collect the fare once the rides gets completed. But what about your commissions? How will you get that? Many taxi businesses who lack an automated billing system has to face the below problems.

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1. Difficulty in commission procurement

In the absence of an automated driver billing system, collecting commission from all your drivers becomes a headache. Let’s assume that you own a taxi company with 10 drivers.

Since the number of drivers are few, collecting commissions from them is not a huge task. However, if your company expands to 100 drivers then collecting the commissions in the traditional way will be a huge challenge.

It’s because when the number of drivers is more you can’t go to each driver for collecting commission.

Similarly, you can’t ask all of them to visit your office and submit the commission amount. The latter case will create chaos and confusion.

2. Difficult to implement any incentive programs

Procurement or collection of commission is not the only issue that automated driver billing solves. Many taxi companies have robust incentive structures to motivate their drivers to work more.

With the traditional way of commission collection, you won’t be able to execute these incentives plans with full effect.

For example, there’s a driver who needs to pay $100 as commission; however, he is also eligible for an incentive of $50.

This means that the driver will have to pay only $100-$50= $50 as his commission. In absence of an automated billing and payout you have to maintain all the record of incentives and commissions separately.

3. Increased paperwork and risk of errors

If you follow the traditional way for commission collection then you have to do a lot of paperwork. You have to maintain a record for each of your driver.

More the drivers more will be records and hence its management will be tougher.

Moreover, due to a mammoth paperwork there’s a high possibility of human error. This human error can be your direct loss.

To solve all the above issues, you can adopt an automated driver’s billing system in your taxi management software.

How does it work?

Let’s see how an automated driver billing works. The latest taxi booking systems have a driver wallet and driver settlement. Let’s understand each of them in detail.

1. Driver wallet

Driver wallet is nothing but a wallet system integrated in the solution. This shouldn’t be confused with any wallet payment or any peer-to-peer wallet app.

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So, in a taxi solution each driver is allotted with a wallet which is primarily used for collecting commissions and giving incentives.

The taxi company owner has two options as to how he/she wants the driver wallet to function.

Option 1

In the first option the driver has to fill his/her wallet by paying a certain amount. For example, driver A paid $1500 in his/her wallet.

Now every time driver A finishes a ride the commission gets automatically deducted from the wallet. At the end of a cycle which can be of a day, week, or month the driver A’s wallet balance will be checked.

Let’s suppose the commission to be paid is $1000 then the current wallet balance for driver A will be $1500 – $1000 = $500.

Alternatively, if the commission amount for driver A is $2000 then the driver’s current balance will be $1500 – $2000= -$500. The negative sign indicates the driver has to further pay $500 of commission.

Option 2

In the second option the driver A doesn’t have to pay any amount at the start of the cycle, his wallet balance at this time will be zero.

Now let’s assume that the commission got deducted for each ride and at the end of month the total commission for driver A was $1000.

In this case, the driver A’s wallet balance will be -$1000. Now, the driver has to pay $1000 to restore his wallet balance to zero.

In simple terms, Option 1 is like a prepaid plan where you pay first and then use the service. Similarly, option 2 is like a postpaid plan where you use the service first and then pay.

Read More: How wallet system works and why it is important?

2. Driver settlement

Driver settlement consists of two elements.

  • Payout
  • Pay in

Payout

The total amount of money to be paid to the driver after considering all the factors such as incentives, penalties, commission, tax, and many other at the end of the cycle is called payout.

Pay in

The total amount of money that a driver needs to pay after considering all the above factors at the end of the cycle is called Pay in.

The advantage of driver settlement is that it allows proper execution and management of incentive plans as mentioned above.

Another important benefit of driver settlement is that it gives you the authority to manage the finances in your way.

In an app-based taxi system the customer pays the driver either by cash or by card. In cash payment the money goes directly to the driver.

However, in the card or any other cashless payment the money directly goes to the taxi company.

The amount of cashless money is settled in the driver payout at end of the cycle. Due to this, the drivers usually prefer cash payment as they get the money directly in their hands without any waiting.

Now as an admin you can use the driver settlement as the tool to increase or decrease the flow of money to a driver.

For example, driver A, B, and C together have a huge amount of money outstanding which they need to pay at the end of the month but you’re in urgent need of money.

In such case, you can ensure that all the drivers A, B, and C only gets rides with cashless payments so that your company gets all the fare which can be later adjusted with the outstanding amount of those drivers in the payouts.

Conclusion

In this article, we saw what automated billing is? Why it’s needed and how it works?

The benefits of an automated billing system are immense as they make the billing process, quick, error-free, and more efficient.

Moreover, it also lends you with power to dictate the cash flow as per your requirement.

If you think that you must have a taxi booking system with such automated driver billing system in it then Yelowsoft’s white-label solution is perfect for you.

It’s a robust system and has all the features that have been mentioned in this blog. So, what are you waiting for? Control and manage your driver billings efficiently with an automated driver billing and payout.

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Shahid Mansuri
Shahid Mansuri
Shahid Mansuri Co-founder of Yelowsoft, one of the leading Taxi Booking software development company in 2017. It is known for developing Taxi Dispatch Software of unmatched quality. His visionary leadership and flamboyant management style have yield fruitful results for the company.