Tech brand Hailo was founded in 2010 by three london cabbies and caters for a $70bn global market. Controversially, it has a minimum fee policy.
Marketing Week (MW): What is Hailo?
Sara Holt (SH): It is the way to get a cab in two taps. Wherever you are in London, it takes on average less than four minutes from the moment you tap that taxi to getting into it. You don’t need cash and you have an intermediary who can facilitate conversation. For example, one of the things we do frequently is return lost property,
so people can call up and we will help sort out
any problem there has been in your journey.
MW: Considering it’s the eighth cab app to market, why do you think investors were still interested?
SH: Hailo is not a name that limits us to cabs; it might lead to something far greater in future. Investors who have got really excited about Hailo have done so because it is already a very successful business model but can also be rolled into other businesses and territories very easily.
Superficially, it seems like just a cab app but the app technology is far bigger than that. The potential for connecting mobile payment with some other mobile provider – for people who might need something or want to sell something in the way that a taxi driver does – is interesting.
MW: Who are your biggest competitors?
SH: When we first started it was other cab apps but we don’t really find that any more. There are 24,000 black cabs in London and just under 14,000 on Hailo.
Our competition is the street hail. The driver pays us 10 per cent for Hailo jobs so why would they accept a job where they have to drive 500 yards up the road to a passenger when they have someone standing in front of them hailing a cab?
It’s taking entertainment marketing and applying it to taxis, which hasn’t been done before
MW: What about other start-up cab apps coming out at the moment, such as Uber or Kabbee?
SH: We are synonymous with the black taxi. We have cab driver founders in our business and we work with cabbies in a way that no other business does. There is a time when you want a minicab and a time when you want a black cab. They are all different propositions from ours. It would be wrong for me to say that we don’t see them as competition on some level but, frankly, Hailo is a completely different type of product.
MW: Newer cab apps could pick up the business of people who don’t want to pay a minimum fee. Can you explain the reasons behind minimum pricing of £10 (£8 from 10-4pm on weekdays), and £15 at night?
SH: We put in the minimum fare to ensure it is worth the driver’s while taking a Hailo job which might involve driving 500 yards up the street to pick someone up right outside their door. Making sure that both the driver and the passenger have a great experience is where the idea came from. There was an outcry at the time but we are fairly relaxed about it because it has not affected any of our business results.
MW: How did you let consumers know about the reasons behind the minimum prices?
SH: We sent an email to every Hailo customer, which we spent a lot of time crafting. We were trying to explain that if a driver has to drive 10 minutes farther to collect you and you only give them £5, they are not going to do that and you will get stranded more often. We tried to explain it from the driver’s perspective.
MW: Hailo is present in 15 cities internationally. Is the business model different in each?
SH: Yes. In the UK the driver pays us 10 per cent, in Ireland the driver pays 12 per cent, in the US, where cabs are a lot cheaper, the passenger pays a fee to use Hailo and in Japan we use fleets and the fleet pays. It depends where we are in the world.
MW: What effect has using Hailo’s app technology had on London’s black cab industry?
SH: The technology allows drivers to call and message other cabbies through the app and report on traffic updates, and we have also launched driver rewards. It’s a game in the app where the more Hailo jobs you take, the higher you get in the reward scheme and it tells the drivers how many jobs they have remaining to become a bronze, silver or gold driver.
When you hit gold you unlock rewards. For example, we had a partnership with 20th Century Fox and its film, The Secret Life of Walter Mitty, and gold drivers got a sneak preview of it. It’s like a Tesco Clubcard for drivers, which has revolutionised things for them.
MW: How do you help drivers who are not as tech-savvy with using the app?
SH: We have a driver office. You will see 65-year-old guys come in who require help to set up their phone and then they walk out and accept a Hailo job. That’s part of what has made Hailo such a success: the ability to convert these drivers
to technology and get them using the app.
MW: It was announced that Hailo is part of the Government’s Tech City UK Future Fifty – the year-long programme supporting high-growth businesses. How has that benefited Hailo?
SH: It’s really high profile and a great thing to be associated with, especially when you look at the other companies involved, such as Skyscanner, Just Eat and Shazam. For us to be in among that list has already provided a huge PR boost.
The Government’s mission is to stop companies like us going to the US for an initial public offering and it wants to help us stay here. It invited us to go with David Cameron to China to expand our profile in Asia, which is a key market for us. These are the sorts of opportunities it is giving us already, so it remains to be seen how it translates and what it will end up helping us with.
MW: How does heading marketing at Hailo differ from your former roles at Global Radio or UKTV?
SH: What has been brilliant about working here is that it needed an element of saying ‘Let’s make it famous’. Everybody heard about Hailo pretty quickly after I joined because of the stunts that we did. Access to Richard Branson, to celebrate 3 million London journeys, was easy to organise as he is one of our key investors. It’s taking entertainment marketing and applying it to taxis, which hasn’t been done before.
MW: How is your role measured?
SH: I’m closely aligned to profit and loss in the same way that an FMCG marketer is and I know pretty quickly whether something works. We have done stunts leading to app downloads and registrations but, because it has been busy on the street, the driver hasn’t accepted the job. These are all things that I have to work on because otherwise, all this awareness [raising] that we have done about Hailo isn’t going to work.
MW: What is next for the business?
SH: In terms of the UK, I want Hailo to be all over the country; a roll-out plan is within our sights. Second, a lot of product extensions are happening; for example, Hailo for business is coming very soon. If you think about all those times your company has had a private hire vehicle and you have paid a huge amount of money for it, Hailo for business and how that might work is a really exciting proposition.
Hailo in numbers
Hailo’s passengers to date
The amount raised from investors, including Union Square Ventures, Accel Partners, Wellington Partners, Atomico Ventures and Sir Richard Branson
Black cabs in London, with just under 14,000 using Hailo 15 Global cities where Hailo is active
Global downloads of the app and 436,000 Active registered customers in London
How Hailo started
Hailo is a free app, available on iPhone and Android, which connects people with a nearby black taxi based on their smartphone’s geolocation function. This both offers a quick response for customers and enables cabbies to locate more passengers when it suits them.
The start-up was founded in London in 2010 by three taxi drivers and three internet entrepreneurs. The three cabbie founders wanted to create a service that would attract passengers during drivers’ ‘dead times’. The three entrepreneurs recognised that the way to win the market was to attract people who were already engaged with black cabs.
All six met in a coffee shop near London’s Charlotte Street and spent four hours discussing how they could work together. By the end of that day, Hailo had been founded.
The company has now raised over $90m (£55.1m) from investors and is active in 15 international cities located in Canada, Ireland, Japan, Spain, the UK and the US.