Hailo app proves a virtuous circle for London's black-taxi drivers
A low-key meeting of a few cabbies and entrepreneurs in 2010 gave rise to an app that has now spread to Toronto and Tokyo
Gary Jackson, left,
and Ron Zeghibe, co-founders of Hailo. The taxi app has now spread to 13
cities around the world. Photo: Simon Dawson/Bloomberg/Getty
To anyone passing, the meeting of six men might have seemed incongruous amid the normal hustle and bustle of a busy central London cafe, with customers tucking into full-English breakfasts and mugs of builders tea.
It was in Double J's Cafe on Charlotte Street in November 2010 that three taxi drivers, trying improve the lot of the average cabbie, first met with three entrepreneurs who were eager to bring mobile technology to black taxis. The modest beginning, which stretched over three hours, cemented the idea for Hailo, the taxi app that has spread to more than a dozen cities across three continents and raised more than $90m (£55m) in three years.
The app appears simple – a tap on the trademark yellow button hails a nearby taxi and journeys can be paid for using credit-card information that has already been uploaded to the system. More complicated was getting together a network that worked for drivers and passengers. Hailo was the eighth app of its type to launch in London, according to Ron Zeghibe, the company's chairman and one of the three founder entrepreneurs.
"We could have the best 21st-century technical solution in the world but, unlike a lot of tech startups, this is grafting technology on to a 400-year-old industry. If you think for a minute that you can walk in and slap this technology [on] and get [drivers] all to say 'wonderful, you saved our lives', you are smoking dope," he said. "You really do need to understand how that business operates, its mindset and how we can work best for [the drivers]."
The answer was delivered in the form of the three cab drivers – Russell Hall, Gary Jackson and Terry Runham – who had set up a company called Taxilight to arrange deals on journeys for the 40% of the time when black cabs are empty, typically on their way into London or returning home.
The meeting in Double J's between the drivers and Zeghibe was set up by Jay Bregman, who had a company that electronically tracked couriers, and was also attended by Caspar Woolley, a former Liberal Democrat election candidate.
By January 2011, Hailo had offices on HMS President, a converted first world war ship on the Thames at Blackfriars, with Bregman as chief executive and Woolley as chief operating officer. "We were the eighth app to launch in London. Addison Lee had [had] an app for two years. You had Kabbee and GetTaxi [among others]. All these guys had a headstart and should have been able to get the market share.
"The problem, I think, was that most of them looked at getting the customers. We flipped that on its head. With the help of these guys on the inside we realised that what it is really about is building the loyalty [of] the driver base," Zeghibe said.
Credit-card facilities were included to counter the fact that two-thirds of London taxis at the time could not take cards, a social networking function was added to tell drivers which areas were busy with work, as well as accounting features to show how much they had earned.
Drivers pay 10% of the cost of the job when they pick up a customer, while the app got rid of additional costs such as "run-in" fees (charged from when a driver takes the booking) to market black cabs as being value for money.
Meanwhile, the three drivers worked to bring their fellow cabbies on board using the catchline "winning back the work".
By the time they launched the app in the latter half of 2011, they had 800 drivers signed up. Today, that stands at about 14,000 in London.
Expansion to Dublin happened in July 2012, which has a large over-supply of drivers. Of the city's 10,000 around 6,000 are signed up to Hailo.
One month's profits from Dublin was used to launch in Cork, Galway and Limerick. Toronto and Chicago followed although there were legal stumbling blocks in New York that caused a delay. Osaka was set up to test the Japanese market before the attempt to take on Tokyo, a city of 13 million people.
Zeghibe said: "The ambition from the start was a global network. The taxi booking business is the first step in building that network. We are not spending millions of dollars to build a social network. If you are going to have a platform and a network, you need a backbone to it. You want to be in London, New York, a number of other hub cities in the US, and you want to get to Asia and ultimately over time have a global network. We will be able to pick [smaller cities such as Manchester and Birmingham] off [later]."
Institutional backers own most of the company with the management team retaining a "very substantial share" but profitability as a group "would be too premature at this stage" as it grows, he said.
They have 50,000 drivers signed up internationally and plan to open in six more cities this year.
Recently, Bregman has suggested expanding the app to include local services, with Zeghibe talking about offering deals on data roaming as an example.
"2015 is the kind of time when we will be looking to expand into lots of cities. It is the kind of thing where we would be doubling or tripling in size," said Zeghibe.
Expansion is dictated by which cities are seen as being "taxi towns", according to Zeghibe. While Los Angeles is the second-largest city in the United States with 3.8 million people, it has just 2,000 cabs. San Francisco is similar with 1,400 cabs – fewer than Cork in Ireland.
"Chicago, however, is a taxi town. The old chequered cab? That is where they were built. And they have the second-largest fleet after New York – because there is an old downtown," said Zeghibe.
It was in Double J's Cafe on Charlotte Street in November 2010 that three taxi drivers, trying improve the lot of the average cabbie, first met with three entrepreneurs who were eager to bring mobile technology to black taxis. The modest beginning, which stretched over three hours, cemented the idea for Hailo, the taxi app that has spread to more than a dozen cities across three continents and raised more than $90m (£55m) in three years.
The app appears simple – a tap on the trademark yellow button hails a nearby taxi and journeys can be paid for using credit-card information that has already been uploaded to the system. More complicated was getting together a network that worked for drivers and passengers. Hailo was the eighth app of its type to launch in London, according to Ron Zeghibe, the company's chairman and one of the three founder entrepreneurs.
"We could have the best 21st-century technical solution in the world but, unlike a lot of tech startups, this is grafting technology on to a 400-year-old industry. If you think for a minute that you can walk in and slap this technology [on] and get [drivers] all to say 'wonderful, you saved our lives', you are smoking dope," he said. "You really do need to understand how that business operates, its mindset and how we can work best for [the drivers]."
The answer was delivered in the form of the three cab drivers – Russell Hall, Gary Jackson and Terry Runham – who had set up a company called Taxilight to arrange deals on journeys for the 40% of the time when black cabs are empty, typically on their way into London or returning home.
The meeting in Double J's between the drivers and Zeghibe was set up by Jay Bregman, who had a company that electronically tracked couriers, and was also attended by Caspar Woolley, a former Liberal Democrat election candidate.
By January 2011, Hailo had offices on HMS President, a converted first world war ship on the Thames at Blackfriars, with Bregman as chief executive and Woolley as chief operating officer. "We were the eighth app to launch in London. Addison Lee had [had] an app for two years. You had Kabbee and GetTaxi [among others]. All these guys had a headstart and should have been able to get the market share.
"The problem, I think, was that most of them looked at getting the customers. We flipped that on its head. With the help of these guys on the inside we realised that what it is really about is building the loyalty [of] the driver base," Zeghibe said.
Credit-card facilities were included to counter the fact that two-thirds of London taxis at the time could not take cards, a social networking function was added to tell drivers which areas were busy with work, as well as accounting features to show how much they had earned.
Drivers pay 10% of the cost of the job when they pick up a customer, while the app got rid of additional costs such as "run-in" fees (charged from when a driver takes the booking) to market black cabs as being value for money.
Meanwhile, the three drivers worked to bring their fellow cabbies on board using the catchline "winning back the work".
By the time they launched the app in the latter half of 2011, they had 800 drivers signed up. Today, that stands at about 14,000 in London.
Expansion to Dublin happened in July 2012, which has a large over-supply of drivers. Of the city's 10,000 around 6,000 are signed up to Hailo.
One month's profits from Dublin was used to launch in Cork, Galway and Limerick. Toronto and Chicago followed although there were legal stumbling blocks in New York that caused a delay. Osaka was set up to test the Japanese market before the attempt to take on Tokyo, a city of 13 million people.
Zeghibe said: "The ambition from the start was a global network. The taxi booking business is the first step in building that network. We are not spending millions of dollars to build a social network. If you are going to have a platform and a network, you need a backbone to it. You want to be in London, New York, a number of other hub cities in the US, and you want to get to Asia and ultimately over time have a global network. We will be able to pick [smaller cities such as Manchester and Birmingham] off [later]."
Institutional backers own most of the company with the management team retaining a "very substantial share" but profitability as a group "would be too premature at this stage" as it grows, he said.
They have 50,000 drivers signed up internationally and plan to open in six more cities this year.
Recently, Bregman has suggested expanding the app to include local services, with Zeghibe talking about offering deals on data roaming as an example.
"2015 is the kind of time when we will be looking to expand into lots of cities. It is the kind of thing where we would be doubling or tripling in size," said Zeghibe.
Where it works
Hailo currently operates in London, across Ireland, Madrid, Barcelona, Boston, Chicago, Washington, New York, Atlanta, Toronto, Montreal, Tokyo and Osaka.Expansion is dictated by which cities are seen as being "taxi towns", according to Zeghibe. While Los Angeles is the second-largest city in the United States with 3.8 million people, it has just 2,000 cabs. San Francisco is similar with 1,400 cabs – fewer than Cork in Ireland.
"Chicago, however, is a taxi town. The old chequered cab? That is where they were built. And they have the second-largest fleet after New York – because there is an old downtown," said Zeghibe.
No comments:
Post a Comment