October 30, 2011 10:51 pm

Phone app steers customers to UK’s black cabs

A smartphone app, dubbed the Facebook for cabbies, has been created for London’s black taxi community with investment from the founders of online telephony business Skype and the venture capital group behind mobile music service Spotify.

Called Hailo, the app helps drivers of the iconic Hackney cabs fight off competition from minicabs and fleet hire vehicles by sharing between themselves critical information, such as the places where customers are waiting to be picked up and traffic trouble spots to avoid.

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Several smartphone apps have already been developed for hailing taxis and mini cabs, such as the highly popular one developed by private hire vehicle provider Addison Lee.

Members of the public will also be able to do this for black cabs using Hailo. However, the business has bigger ambitions, aiming to be a more flexible alternative to radio cab services, which charge a fixed subscription to guide drivers to jobs. Hailo’s app is free to use both for drivers and passengers, but cabbies are charged a proportion of each fare it brings their way.

Jay Bregman, one of Hailo’s six founders, said: “Drivers don’t have any affinity with these [radio taxi services] because all they do is supply them with orders.

“What we are trying to build is a tactical tool to engage the community and encourage interdependence.”

About 2,000 drivers, roughly 10 per cent of all London’s cabby community, have downloaded the Hailo app in the four months it has been available, according to Mr Bregman. Radio Taxis, the market leader in the radio cab market in London, has about 3,000 black cab subscribers.

Hailo raised £750,000 in a seed round of funding, led by Wellington Partners, Spotify’s backers, and Atomico Ventures, the early stage investment group set up by the founders of Skype.

Niklas Zennstrom, Skype’s co-founder, is personally leading Atomico’s involvement, according to Mr Bregman.

The money will in part support Hailo’s international expansion plans and talks have been held with the Taxi & Limousine Commission in New York about launching there next year.

The creation of Apple’s iPhone and other smartphones has spawned a large market for downloadable apps, ranging from silly gimmicks, such as turning a phone into a mirror, to more sophisticated services, such as online boarding passes for plane trips.

This in turn has encouraged a generation of software developers to have a go at creating businesses to sell their creations, often in their spare time and sold for a few pence a time.

Robin Klein, venture partner at Index Ventures, said his email inbox is filled each day with business pitches from people who see this as an easy route to entrepreneurship.

“It is possible to build a significant business on apps, but it does require significant adoption,” he said.

The smart apps were those that generate repeat revenue from services to users, Mr Klein added.

“Reasonably big businesses can be built out of these but they really need to use the power of the mobile, such as its ability to find your location.”

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