Ordering a taxi or a pizza creating new revenue stream for Canadian and U.S. cell carriers

Canadian companies specializing in mobile apps and fleet management are creating new business opportunities and new revenue streams for the major wireless carriers in both Canada and the United States – simply by making it easier for people to order a taxi or a pizza. “We go directly through the carrier,” says Nick Quain, CEO of Toronto-headquartered CellWand Communications Inc., which develops mobile search applications through abbreviated dialing codes. “You need carrier permission to download the codes for #8294.” Quain is referring to CellWand’s “#TAXI” (#-8-2-9-4) feature, which as of this month is now available to all users of Viigo, a Toronto-based company that offers a free software application for smartphones that provides access to news, sports, weather and other content. With one click, callers are connected to the first available taxicab company serving their local calling area, receive a recommendation for a local cab company or the caller can choose the cab company of their choice in any city or town across the country. “#TAXI connects people quickly to a taxi wherever they are,” says Mark Ruddock, president and CEO of Viigo. “It’s all about one click convenience, and that’s what makes it such a great service for Viigo.” In Canada, #TAXI is available on Bell Mobility, Rogers Wireless and Telus and has connected millions of callers to taxis. As well, the company brags 85% of US mobile phone coverage with big wireless carriers such as AT&T Mobility, Sprint and Verizon Wireless. “We don’t accept money from the taxi companies,” says Quain. “We partner through the carriers – they then bill on a per-call basis, at $1.25 to $1.75 a call.” Cell Wand plans to roll out a similar, “#PIZZA” feature in early 2010. This kind of capability – delivered through carriers across markets, yet able to address particular industry needs – could pose a challenge to companies with industry-specific solutions. “Financial and research analysts perceive the mobile platform to be the number one threat to us,” says Vari Ghai, CEO of Vancouver-based DDS Wireless International Inc., formerly known as Digital Dispatch Systems, which focuses on real-time dispatching, vehicle location and tracking, and computerized routing and scheduling. “But the most important reason customers stay with us is that we have developed the software,” says Ghai. “Our devices are also ruggedized, and fit for a purpose. PDAs break, but we have units in taxis that are over 12 years old – the only reason people upgrade is for new features like roaming, printers, turn-by-turn navigation, and e-commerce.” New business models build continuity “One of the key things is that our revenue is now recurring,” says Ghai, referring to the shift to a hosted, subscription-based software model. “Four years ago 25% of our revenue was recurring, now its 67%.” DDS Wireless did this by going beyond its large installed enterprise base and taking its Software as a Service model out to smaller taxi fleets. These companies pay about $100 a month for the full DDS dispatch service. “There are 220,000 taxis in the United States,” says Ghai. “And out of 6,300 taxi companies, 5% have 100 or more vehicles, and another 10% have 50 to 100 vehicles. That means that 85% of the taxi companies in the United States have fewer than 50 vehicles.” But wireless broadband is going global, and the explosion in applications off Research In Motion’s App World, Apple Corp’s App Store for the iPhone, and the expectation that Google Inc’s Android will have a wealth of open source software, could spell trouble for wireless companies with a vertical focus. That is, unless they have a cellular tie-in. “With our system, if a taxi leaves the coverage area for the private radio network, then they can switch to cellular roaming,” says Ghai from DDS, which has recently signed deals in Europe, South Africa, and India. “We have been supporting dual mode for some time. This can help with security, and also let us use public data networks.” As a result, carrier-based smartphone services like those provided by Viigo and CellWand could be complementary to what a company like DDS does. “The next evolution of our application is to start working with the cab industry,” says Quain from CellWand. “It would make our service better – you could make a fleet more efficient, and the consumer could get through faster.” CellWand has partnerships with ZOOM Media and Mothers Against Drunk Driving (MADD) to encourage responsible use of taxis. However, Quain notes that privacy and monetization issues are slowing the commercial adoption of location-based services, though the carriers are very interested. “Carriers are open to all sorts of location-based applications,” says Quain. “But how do you make money? Most who try to drive revenue of businesses or advertising will fail.” This is why for CellWand having things billed through the carrier makes much more sense: it’s something consumers are already familiar with. It’s also something the carriers do well. “We all know, one thing the carriers are good at is billing,” says Quain.

Ordering a taxi or a pizza creating new revenue stream for Canadian and U.S. cell carriers

News | November 30, 2009

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