Autocab launched a suite of cloud-based solutions in 2015, including its market-leading taxi dispatch system, Ghost. The business model for the cloud-based system is built on low monthly recurring Software-as-a-Service (SaaS) subscriptions charged per car, per week instead of the traditional large, up front, payments in the tens or hundreds of thousands of pounds.
One impact of this strategic shift is a short term reduction in revenues and profits as existing customers transition to this new model. However, the longer term benefits of a SaaS subscription business model benefit both Autocab and our customers. The table below, taken from the 2015 audited accounts, highlights the positive impact from this change in business model applying a standard cost of sale and customer retention period:
Company Performance – estimated over the lifetime of a customer
Managing Director Safa Alkateb commented: “Despite the competitive landscape, 2015 proved to be an excellent year. Customers new and old are embracing the SaaS subscription model of payment and as an organisation it allows us to be faster and more agile. Prior to 2015 we were averaging between 600-700 cars a month worth of new business. Today, we are averaging between 1500-2000 new cars a month.
Recurring Software-as-a-Service (SaaS) subscriptions over the longer term provide improved quality of earnings, enhanced revenue visibility and a more predictable cash flow. The advantages of a SaaS subscription model don’t stop there – it’s a win-win scenario with Autocab able to accurately forecast growth and therefore allocate resources better while customers only pay for the software they need, without being encumbered with unnecessary hardware expense. The SaaS model encourages longer term relationships to be formed, and gives us the opportunity to truly partner with our customers in their own growth journeys, rather than just being their technology supplier. The table above highlights the positive impact from this change in business model, taking into account the significant cost saving we have made in no longer having to design and manufacture mobile terminals.
Company Director Hassan Abod explains, “Autocab’s twenty-five years of investment and technological innovation has allowed us to maintain our position as market leader by providing taxi companies with the best software solutions to help them automate their business, increase customer bookings, grow profits and retain drivers. By offering a subscription-based payment model we’ve reduced the capital expenditure required by businesses and improved their cash flow through significantly smaller, manageable and predictable monthly payments negating the need for firms to invest large amounts of cash up front.”
With an annual seven-figure investment in R&D, Autocab’s innovations shape the industry as we continue our journey from our humble beginnings in Radio to Data to PDAs and, more recently, to our technology platform in the Cloud.
Autocab is the trading name of GPC Computer Software Limited
±The actual profits realised in the profit and loss account over future periods will be determined by the specific revenues, costs and retention period per customer, and may be higher or lower than the estimates above