Hailo Takes on Uber as it Debuts in Toronto, Plans North American Expansion

Today UK-based Hailo announced the launch of its taxi app in Toronto after building a presence in both London and Dublin, as a part of a roll-out strategy to expand to the North American market. The company’s Toronto launch coincides with a city-wide campaign by another taxi-app provider, Uber, which launched taxi service in Toronto in August and is currently offering three days of free cab services to offset the arrival of the competitor. There are currently 450 Hailo-supported drivers in the city so far, and that number will reportedly hit 2,000 over the next few months.

Hailo’s team has an understanding of both the business side and the driver’s perspective, with one of the co-founders Russell Hall having been a London cab driver for 22-years before helping found the company. “We knew to be really successful in the business we need to understand the taxi side of the equation and the passenger side. Because there’s two problems this business tries to solve, drivers have 30-50 percent downtime and passengers find it really difficult to find a cab. So we’re solving both the efficiency problem on the part of the drivers and the accessibility and convenience problem on the part of customers,” founder and CEO Jay Bregman commented in an interview.

The consumer-facing app, available both for iPhone and Android, is very similar to the Uber experience: users ‘hail’ a cab with two taps from wherever they are, with a timer that shows the approximate waiting time and a map to provide a visual of where the nearest cabs are in relation to them. They then receive a notification when the cab arrives, input their payment information into the system once, and pay automatically upon departure with the receipt emailed to them for their records. They can also preset their tip options that are tiered from 15-25 percent or a custom option.

Drivers are prescreened to ensure that they’re licensed and are approved individually. The company didn’t need to partner with local fleets like Beck since the company is a licensed cab company, and since cab drivers in Toronto operate as independent contractors, they can work with more than one company. “We have a very unique strategy in the marketplace, our strategy is that we put drivers first. Everyone else in this marketplace looks at this through the perspective and lens of the customer, because that’s what they know,” Bregman added. “The way to provide the best service for customers is to focus first on the experience of drivers.”

Drivers download their own backend Hailo Driver app which lets them chat, and receive real-time alerts about traffic, accidents, and high demand areas. It also gives them the ability to process credit card payments and includes a built-in analytics dashboard to show them their stats for the day. Hailo will also guarantee payment for all the transactions acquired through their service to the cab driver, saving them from worrying about failed transactions or customers dashing off before paying.

With Hailo, customers are charged whatever rate they incur on the cab’s meter while Hailo takes 15 percent of each driver’s fare, which includes full access to their network and credit card payment processing. Competitive services like Uber provide very similar functionality, however their services add an additional 20 percent to the metered fare with an undisclosed amount going to the driver (though that extra 20 percent includes gratuity, Hailo users can add their own gratuity before their ride starts).

“Because of our focus on the drivers and we have drivers in the business, we just have a better quality and community of drivers. We also have higher liquidity, it’s not as if our app is just a booking app and the only virtue of it is the driver just sits and waits for it to blink every once in a while. Drivers are engaging with this app all the time, it’s helping them even when we’re not not delivering them paying gigs, so actually we create this engaged community of drivers, that’s why we have 7,000 cab drivers in London,” Bregman said in response to competitive pressures faced in Toronto.

With London, Dublin, and now Toronto under their belt, the company is getting geared up to take their service to Chicago, Boston, and New York City in the coming months. The company has no shortage of funding, with $17 million earlier in the year in a Series A round from Accel PartnersAtomico, and Wellington Partners. They also understand that one of the other variables their success rests on is the adoption of smartphones by cab drivers. Although confident that drivers are getting on board, the company is looking to partner with Canadian wireless provider Telus to provide custom plans targeted specifically at taxi drivers. It will be interesting to see to what extent Torontonians adopt their services, especially since they’re competing with local taxi companies as well as startups like Uber.

Note: BetaKit reached out to Uber’s Toronto general manager for comment, but didn’t receive a response by publication time.

 

Humayun Khan

Humayun Khan

Humayun Khan is a Senior Writer and Analyst at BetaKit. A marketing graduate with honors, Humayun's work experience spans the fields of consumer behaviour with noted contributions in an academic paper published in the Journal of Consumer Psychology and market research consulting having coordinated projects for a major financial services client at Decode Inc. More recently he was involved in business strategy as a Business Analyst for an equipment rental outlet and prior in the National Marketing Department at Ernst & Young LLP. He is passionate about emerging and disrupting technology and its ability to transform and create entirely new industries.

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