In the rush to revolutionize taxicabs, the hot new property isn’t a fancy black sedan or a network of hustling cabbies. Instead, digital entrepreneurs are suddenly racing toward the 21st century version of hitchhiking.
So-called “ridesharing” services, which enlist everyday people to make some money by picking up other folks, have been spreading from the San Francisco area thanks to high-profile startups like Sidecar and Lyft.
Uber, a heavily financed startup that is taking on the “black car” and taxi industries, recently jumped into the ridesharing game too, unwilling to let other upstarts expand on its possible turf.
But some startups haven’t bothered to change lanes—and that could be an advantage.
One of the most notable examples is Hailo, a London-based company that makes smartphone apps to connect consumers and cabbies.
“Simplicity is a beautiful thing,” Hailo CEO Jay Bregman says. “We believe that there is more than enough room to build a spectacular business just focused there. So we are laser-focused on doing yellow cabs and doing them perfectly, and nothing else.”
Considering the way taxi services are regulated around the country, that should be plenty of work.
In many cities around the U.S., local governments have strict laws and rules limiting the number of players in the car-for-hire industry. The regulations are meant to help protect consumers from unsafe drivers and wildly varying fares. But predictably, the highly regulated industry has become relatively closed-off, and hasn’t leapt ahead with the latest advances in technology.
There are also plenty of bad actors. An amazingly detailed Boston Globe investigation, for example, recently revealed the seedier sides of the taxi industry, replete with tales of bribes, driver gouging, and straw-man license owners cashing in on lucrative taxi leases.
The highly regulated, insular nature of the taxi industry has led to plenty of clashes around the country as entrepreneurs have attempted to shake up the old-school taxi and black-car system. And by far, the most pugnacious has been San Francisco-based Uber.
Uber’s early approach was to start hooking up drivers and passengers with more expensive sedan rides without getting officially blessed as a regulated black-car booking service, leading to some skirmishes with local authorities.
In some cities, including Washington, DC, and Boston, government officials conceded to well-organized pressure from the app’s fans.
There’s a good reason why those people are so vocal—the Uber app, and others like it, can make a formerly frustrating task seamless. Whip out your smartphone, and up pops a little icon on the map where you’re standing. Push a button to call a car, and it arrives. When you leave, pay through the app with the credit card you have on file.
The established taxi industry, however, isn’t quite so sanguine. In Boston, for example, taxi interests have sued Uber in a case that has federal implications (Uber has asked that the civil lawsuit be dismissed).
Hailo, however, has mostly escaped that ire.
While Bregman says there have been some conflicts, he thinks his startup avoids spooking the entrenched taxi systems too badly because of its focus on getting more people into cabs when they’re empty, rather than trying to crowd out the cab companies or own the relationship with drivers.
For instance, Bregman says, taxi drivers spend 40 to 50 percent of their time “desperately seeking fares.” Hailo’s goal is to put riders in those empty cabs, but make it incremental business rather than cutting out a radio dispatch company or other entity that makes money by getting payments from cabbies.
Hailo can make that approach work when it has large numbers of cabbies signed up, Bregman says.
Hailo says it has about 1,400 drivers registered for its service in Boston, a significant number when compared to the 1,825 licensed taxis in the city. Hailo claims 32,000 drivers registered across all of its cities, and says it is on pace for $100 million in
