Hailo to exit North America — report

Hailo to exit North America — report

16 OCT 2014

Taxi booking app maker Hailo is to pull out of the US after being unable to compete in a market in which rivals Uber and Lyft are engaged in a price war, according to a Financial Times report.

The company said it made the decision to withdraw from the US and Canada as it was impossible to be profitable in those markets.

In addition, co-founder and co-chief executive, Jay Bregman, is to leave the company with Tom Barr, his fellow co-chief executive, left in control.

Barr told Financial Times that the two entrenched “first-mover competitors”, already active when Hailo moved into North America, are engaged in a price war.

He claimed Hailo was growing in the region, but that the profitability of the market and the environment being fostered by rival companies “ceased to make sense”.

Around 20 members of staff in the region are likely to lose their jobs, equivalent to around 10 per cent of Hailo’s headcount.

Hailo launched in New York in March last year and currently has North American operations in Washington DC, Chicago, Boston, Toronto and Montreal. It has received more than $100 million in investment to date.

The company operates in around 30 cities globally, and is the most-used taxi-service app in London, Madrid, Barcelona and Dublin. It has more than 1.4 million registered passengers with revenue totalling more than $100 million in 2013.

The focus for Hailo now will be to expand into new cities in Europe and Asia, where Barr said authorities “see more importance in how the taxi industry supports the citizenry”, resulting in “a friendlier environment to grow in”.

The company partners with local taxi groups who continue to use a meter, with Hailo taking a 10 per cent cut of fares.

In contrast, Uber works with contracted drivers that aren’t registered taxi drivers. It has been heavily criticised by taxi driver groups for unfairly competing with their businesses.

In addition, Uber offers lower fares, which the company argues leads to more journeys and a rise in total income for drivers.

Authorities in Germany have tried to impose restrictions on Uber, which recently led it to start working with licensed taxi drivers in the country.

Despite controversy, Uber recently received $1.2 billion in funding, giving it a valuation of $18.2 billion.

Author

Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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