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.
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.
