In 2013, after some mobile taxi-booking software companies received financing, they began a carpet-bombing promotion in cities like Beijing and Shanghai. Users learned about the rise of mobile taxi booking through Weibo, online news, traditional newspapers, building advertisements, text messages, etc., either actively or passively. Under the promotional push of sharing receipts for reimbursement and recommending to receive phone credits, many users started trying to use mobile taxi booking. Encouraged by them, other software companies also followed the trend to enter this industry, making advertisements and promotions, just like the group-buying e-commerce of those years, all flocking together to create a buzz.It's not easy to do well in mobile taxi booking, but the market entry threshold is not high. Although the pioneers have developed significantly over more than a year, there are still many followers coming. Regardless of their product quality for now, these dozens of products can be roughly summarized into the following categories:1. Pure mobile internet applications that provide passenger-side and driver-side apps to directly facilitate taxi booking transactions. Representative products include Yoyo Taxi, Didi Taxi, Kuaidi Taxi, etc. These products were born in cities where taxi booking had obvious pain points, started early, and developed the fastest. Currently, they are the main force in the mobile taxi booking market.2. Mobile taxi booking apps developed by taxi companies and dispatch centers. These enterprises invested heavily in installing GPS terminals on taxis and setting up telephone dispatch centers. Seeing their driver resources and business gradually being eroded by mobile internet companies, how could they fall behind? Generally, these enterprises only develop passenger-side apps and can only dispatch taxis connected to their own system. Their advantage is the inherent driver resources, but the app experience is poor, and the old mindset of guarding their own interests also limits their development.3. Apps hosted by the government and developed by third parties. In cities without large car companies, the unified dispatch platform is generally constructed under the supervision of the government transportation department. The popularity of mobile internet and the rise of mobile taxi booking apps will also drive the government to keep up with the trend. Since the government usually entrusts the project to third parties for development, problems such as poor app experience and slow improvement are basically impossible to overcome. Its advantage is the pre-equipped driver resources and low cost of publicity and promotion.The above three types basically cover most of the current mobile taxi booking related products. Among them, the first type best fits the development trend of mobile internet and will inevitably become the mainstream in the future; the other two, although they won't exit the market in the short term, also have no possibility of growing strong.A herd mentality in an industry is not necessarily a bad phenomenon. A large number of start-up companies entering this field popularize the concept of mobile car booking; at the same time, the rules of the entire industry have not yet matured, and continuous attempts by a large number of enterprises will eventually form a reasonable set of rules. However, before that, latecomers will inevitably be suppressed by the early entrants, mainly in terms of funds and resources. To avoid repeating the mistake of group-buying going from prosperity to decline in a short period, players in the mobile taxi booking industry should first avoid competing by burning money.Many insiders can't help but wonder: without burning money, it's impossible to quickly capture the market, without the market, one cannot survive. Isn't burning money just about speed?Through investigation and analysis, as well as some industry experience, I explain from the following aspects:Firstly, after taxi booking software companies raise funds, the capital is mainly used to acquire more driver resources and passenger resources. This thinking is basically the same in the industry, and the operation methods are also similar. It's nothing more than accumulating resources through subsidies for drivers, discounts for passengers, advertising campaigns, etc. Taking Shanghai as an example, the effect is relatively immediate. A certain taxi booking software company has reached nearly 10,000 orders per day within a few months, surprising many media outlets and investors. But after talking with some taxi drivers on-site, I found an interesting phenomenon: almost all drivers have installed multiple taxi driver-end software on their smartphones. Although they each have their preferences, they all indicated that as long as the quality of the business provided by any APP is good, they would accept it. Moreover, drivers' preference for a particular product mainly comes from getting more cash subsidies from it. On the passenger side, some frequent taxi users also install multiple taxi booking software on their phones. As long as a product has discounts or promotional activities, they will prioritize using that product to book a car. Therefore, the effect of burning money to occupy the market is very limited. The following factors will quickly weaken the effect of burning money:1. The emergence of a better mobile taxi booking software;2. Market activities of competitors;3. Product flaws or defects;For start-up companies with limited funds, competing by burning money with peers is no different from drinking poison to quench thirst.Secondly, the essence of the difficulty in hailing a taxi is caused by a combination of supply and demand, traffic, and management factors, which cannot be changed simply by changing the way taxis are hailed. Imagine if all users hail taxis through the same taxi booking software, then the only change is that the booking method changes from a phone call to a mobile phone, and the result will not be much different from when phone booking was popular. During peak hours, it will still be difficult to hail a taxi, and during idle periods, drivers will still have no orders. Currently, some passengers feel that using mobile taxi booking software allows them to quickly hail a taxi, mainly because the number of passengers using mobile taxi booking relative to drivers is still small, and supply and demand can balance; secondly, taxi booking companies subsidize drivers for taking orders, but can this last forever? Start-up companies need to realize this point and don't need to worry about whether this industry will be dominated by one player. Doing well in their own products and services is the right way.Thirdly, from an industry perspective, hailing a taxi is essentially still a traditional service industry. Currently, mobile taxi booking software only targets the needs before passengers get in the car, and does not involve the needs related to taxi services during the ride to the destination. Although mobile taxi booking companies can schedule drivers, they do not have management rights. The management rights of taxis and drivers always lie in the hands of car companies and relevant government departments. Doing light means doing insufficient. Start-up companies might as well look for opportunities from other angles to delve deeper into the industry instead of blindly following trends.In summary, the mobile taxi booking industry is still in its infancy. Although the pioneers have achieved initial success, from the perspective of the entire industry, it is still in the trial stage, and the business model, service model, and profit model are far from being fixed. If start-up companies only want to compete by burning money, they will end up with the same fate as most group-buying and e-commerce companies, benefiting those who have strong financing capabilities and enough funds to 'burn'. In other words, even if you want to burn money, don't compete, find your own positioning and timing, and spend the money wisely. It's too late and there will be no opportunity for those who blindly follow trends. Pursuing speed in fields where many rules are still uncertain will inevitably bear considerable risks. Such big risks should be left to wealthy enterprises. Are start-up companies ready for a protracted battle?(Author: Jiang Weiqing, 10 years of software product R&D experience, 5 years of taxi industry R&D and operations experience. Weibo: @Taxi-Laojiang)