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  • Writer's pictureYarana Hossain

How Does Taxi Dispatch Work: A Step-by-Step Guideline

Looking at some of the old datasets that analyzed the global market of the taxi dispatch software industry in 2017, we can realize the gravity of the taxi industry. Four regions held most of the market share in the below percentages:




North America


Market Share





It’s pretty obvious that the numbers have gone up since then, demonstrating the advantages of utilizing technology over conventional taxi businesses.

So, without any delay, let’s move to our blog of the day, which outlines the perks of a taxi booking app and answers to our query of “How does taxi dispatch work?”

Advantages of a Taxi Dispatch Software

Advantages of a Taxi Dispatch Software

Although we’re all quite aware of the usefulness of software by now, we have put forth the benefits of taxi dispatch software to streamline your business operations

1. Enhanced Efficiency

Reduced workload on dispatchers and drivers, managing multiple vehicles in one app, dedicated account manager, automated driver registration and KYC verification process.

Utilizing dispatch software for your taxi business will undoubtedly result in reduced workload and increased productivity. With everything manageable in one app and separated via distinct panels, drivers and dispatchers can find all necessary details in a jiffy.

Moreover, most taxi software solutions providers tend to offer a dedicated account manager to handle all ad-hoc tasks on a daily.

Although this role is necessary to foster strong relationships with clients, it can be easily filled by a virtual assistant or a 24/7 customer service rep if your app doesn’t come with it.

Even drivers can simply join the crew through automated driver registration and KYC verification processes.

2. Budget-Friendly Option

The best way to tackle the time-consuming administrative management process so far is by relying on automated software. Besides, having a taxi booking app for your business can make billing and invoicing effortless in less time.

Additionally, taxi businesses with multiple vehicle options require large fleet management, a situation that requires a heavy chunk of money. However, you can get the job done at a bulk discount through the taxi dispatch app instead.

The best part, however, is the flexibility to scale the app requirements based on market demand, equaling cost-effectiveness.

3. Data Analysis for Expansion

Pre Scheduling, cancellations, repeat bookings- management of taxi supply, prioritizing high demands of loyal customers and providing offers on zoning and plotting, detailed revenue charts.

Regardless of the type of organization, each one of them needs to analyze the business operations and find areas of improvement and expansion.

Seeking assistance for the generation of performance metrics as well as reports with the taxi dispatch software can hence help increase efficiency.

This may include identifying the busiest streets with the most taxi demand, the most popular pickup and dropoff locations, cancellation reasons, cause of refunds, etc.

4. Better Customer Service

Real time flight tracking and hotel booking, transparent billing, fare estimation and bidding, location sharing and SOS button, live support, multilingual app with Google translation, payment integrations, user access restrictions.

“Happy customer equals a loyal customer.” -the ultimate motto every business should stand by. 

  • Real time flight tracking

  • Hotel booking

  • Fare estimation and bidding

  • Real-time taxi tracking and communication via messages and calls

  • Live location sharing and SOS button

  • Live customer support

  • Multilingual app integrated with Google Translate

  • Diversified payment integrations and pay later 

  • User access restrictions and many more

Taxi Dispatcher: How Does the Software Work?

Taxi Dispatcher: How Does the Software Work?

Now that we’ve gone through how taxi dispatch systems can be utilized to generate more revenue with utmost customer satisfaction, let us guide you through the process of this software.

Ride Request

The foremost step in taxi dispatch software is when a passenger requests to reach a destination on the taxi booking app.

This gives the software access to passenger information needed to provide them with a ride of choice:

  • The geolocation of the passenger requesting a ride, usually with the help of GPS 

  • The destination or dropoff location and the distance from the area of pickup

Any individual preferences, including a choice of vehicle, payment method (cash or digital), prescheduled ride, etc.

Match Drivers

Next off, automated taxi dispatch systems use the available passenger data to match a suitable driver through a central dispatch center. This is done on the basis of free drivers, their customer ratings, and proximity to the pickup location.

 Passenger Location Sharing & Taxi Dispatch

This is simply followed by the central dispatch center or mobile app sending the passenger’s request to the available drivers. Once the ride request is accepted, the passenger’s GPS coordinates are sent to the designated taxi driver.  

Ride Confirmation & Tracking

Once the taxi driver has accepted a passenger’s request, a confirmation notification is sent to the passenger panel on the taxi booking app. Now, the customer can easily track the driver’s location and vehicle and check the estimated time of arrival (ETA) via the app to ensure a smooth commute. 

Some taxi dispatching software also have built-in OTP for passenger verification before starting the ride and avoiding driver fraudulency.

Ride Completion

Upon the passenger’s arrival at the destination, the driver ends the ride through the taxi application and proceeds toward payment clearance.

If the fare is to be paid digitally, the taxi dispatch app automatically asks the customer to clear the payment. The passenger then does so by adding the credit card credentials or using a mobile wallet.

Payment Processing

When the payment is cleared from the passenger’s end, the system processes the bill and notifies the passenger with an e-receipt. Simultaneously, the received fare is credited to the rider’s wallet after deductions of the taxi company’s agreed-upon commission.

Passenger Data Analytics

To utilize the taxi booking app, data collected from the system is later analyzed to enhance customer support and operational efficiency, as well as to expand the taxi business with more app features and services.

Wrapping it Up

Now that we’ve managed to cover the topic of the day, “How does taxi dispatch work?” and why it’s so in demand, you might want to read up on the expenses of building one for your business. If so, head off to our “How much does a taxi dispatch cost?” blog and be wise about your decisions!

Frequent Confusions on Taxi Dispatch Software

How Does a Taxi Dispatcher Find Me so Quickly?

Since the live location of the passenger is shared through GPS, as soon as they request a ride, the taxi dispatch system can determine it and forward the same to a taxi dispatcher. 

Can I Request a Specific Type of Taxi Through Dispatch?

What Happens if My Taxi Doesn't Show Up?

Is it Cheaper to Hail a Taxi on The Street or Use Dispatch?

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