It's no secret that USV invested in Hailo at the end of last year.

What is less well known is why we would do that.

Hailo announced the financing today and also a bunch of impressive hires for their US and Asia operations and they also disclosed a bunch of numbers for the first time.

Hailo is as big in their home city (London) as Uber is in SF and across the ten markets they are in, Hailo has similar scale as Uber in total transactions per day, week, month, and year. Hailo is different than Uber though. They focus exclusively on the regulated part of the market and as a result they can offer lower prices and a higher liquidity of cars to their riders. The power of this model becomes clear if you travel to London and compare the Uber experience to the Hailo experience.

Another big factor in our investment process was the "I told you so". In late 2011 as Hailo was just launching in London, the team came to see us and told us everything they planned to do in 2012. We were impressed by the team, their backgrounds, and their attitude and energy. But we had big concerns about everything they said they were going to do in 2012. A year later, they came back to see us and not only had they done everything they said they were going to do, they actually did a few things more than that. I referenced this story in a post I wrote at the end of last year. Now the company in the story has been named. They will be added to the investments page on usv.com today.

 And maybe most importantly, we believe in large networks of users that have the power to transform big markets. We've long thought that the ubiquity of the smartphone will enable transactional networks between buyers and sellers and it turns out the urban transportation market is one of the first big markets that is rapidly being transformed by large smartphone networks. We are excited to be able to invest in one of them.

#mobile#NYC#VC & Technology#Web/Tech

Comments (Archived):

  1. John Best

    Great news, I’m pleased for the London startup scene, for the guys at Hailo, and for USV.Although operating in an ostensibly similar market to Uber, how key was the difference in focus and attitude to the regulated part of that market to your decision making process (if you don’t mind me asking)?

    1. fredwilson

      We think they are fairly different businesses. Although it may be possible for one network to serve both the black car and regulated markets. That is certainly Uber’s strategy

      1. John Best

        Thanks πŸ™‚

  2. Roger Chabra

    Congrats Fred, have used them in Toronto and it’s an effortless process. Good luck.

    1. fredwilson

      Thanks Roger. I have encouraged all my friends in Toronto to try them out

  3. LIAD

    I like how they’re a lower-end mass market product as opposed to Uber which is elitist.I like how by going for the regulated market accessing and aggregating supply is easier.I like how the app’s information sharing/collaborative features are great cabbie acquisition tools.I like how being an add-on to cabbies ‘analogue’ hailing capabilities and not their exclusive fare generating mechanism like Uber is, makes Hailo far easier to scale and allows it to benefit from way lower operating costs.I like how they have the perfect name for the business.

    1. Dave Pinsen

      Interesting, too, that they aren’t trying to “disrupt” the taxi business but facilitate it. Not everything needs to be disrupted; there are profits to be made in helping to improve incumbents.

      1. kidmercury

        or so it begins. at one point google was just trying to help out yahoo with their search. samsung was just trying to help out apple with their production.

        1. Drew Meyers

          yup. they are just choosing a different place to start than lyft, uber. the end goal is the same I’d say. Be the marketplace for urban transportation.

        2. Dave Pinsen

          No comment by Hailo, so maybe you’re right.

      2. JLM

        .New economy approach to a huge old economy business by deploying minimal technology through a smartphone — the most prolific bit of tech scat on the planet.A lot of money is going to be made selling a single Coke to all of China. Lots of Chinamen.JLM.

    2. Jay Bregman

      What a great summary. You really nailed it. Thanks for the comment on the name – story on that in this comment below http://www.avc.com/a_vc/201

  4. awaldstein

    Congrats on this Fred. You must be very pleased with this finally done.I like how the chicken and egg piece that plagues social nets is addressed. Merchant side strength first on real demand, then consumer side connection.

  5. William Mougayar

    Congratulations! So, that’s the big deal you have been working on :)Can you talk more about the social network part of Hailo? Why is it different from the others?

    1. Jay Bregman

      Isolation is a pain point of drivers and we give them tools in the driver app to connect with one another (think an exclusive, taxi focused, location-based SN)

      1. William Mougayar

        Interesting. And what can they do as a SN of taxi drivers? Trying to understand it.

    2. fredwilson

      No. This is not my deal. John and Albert sourced and led this. John is on the board.

      1. William Mougayar

        Ah, so we’ll have to wait for your deal then.

  6. Rohan

    In the last month, I’ve been seeing a lot more yellow color cabs with Hailo painted all over, ads in tube stations, etc.Guess they are already putting their funding to use. Good on them!

  7. Carl Rahn Griffith

    Blimey. This is very disruptive. Very interesting. Congratulations!As we discussed a few weeks back, what is particularly interesting here regards tangential opportunities because the black-cab knowledge-base in London is immense and infinitely more useful than any app.If their unique level of city-knowledge can be replicated somewhat in other cities that can only be a good thing – it has to be recognised not every culture can undertake the daunting ‘knowledge’ training our black-cabbies undertake.Crazy numbers of other opportunities will arise.It’s going to be like iTunes for city living/travellers (but without the awful monolithic software framework).

  8. JamesHRH

    Congratulations on getting off the schneid!I like the focus on drivers – especially the idea of having former cabbies recruiting. Creating a personal, sales style relationship with senior influencers creates such strong credibility. It will be a key lever in their success.

    1. fredwilson

      i didn’t really get off the schneid. my partners Albert and John, who have deep european connections/roots, sourced this opportunity in late 2011 and stayed in touch with the management throughout 2012, putting us in a position to make this investment. john took the board seat. i am pretty involved though. i do PR, marketing, and regulatory stuff when asked πŸ™‚

      1. Jay Bregman

        Now you’re just being modest πŸ˜‰ One of the things I am learning to love at USV is it’s small and focused and a true partnership so you get everyone’s help and attention.

        1. JamesHRH

          Fred mentioned on AVC a while back that he has not led a deal in some time. He is right to parse this out & correct me.

      2. JamesHRH

        My bad.Look forward to seeing you light the lamp soon.Maybe AVCers could have something like this installed above their laptops – http://www.wired.com/design

    2. Robert Holtz

      Is that fair really to say Fred was ever even ON a schneid? He just hasn’t seen deals he liked enough to pound on the desk and proclaim, “We gotta do this.” USV still had deal flow of which you can now add this newest deal.

      1. JamesHRH

        Yes, it is fair to say it.

  9. Jan Schultink

    Congrats!This is a city-by-city landgrab business

      1. Jan Schultink


  10. takingpitches

    So so clever to create the driver network effect. At a certain point, like Facebook, everyone needs to wants to be on. And such a shrewd way to get drivers on before TLC fires the starting gun.I am curious to how many NYC drivers have already downloaded the app. I am going to start asking drivers on cab rides.

    1. JamesHRH

      I love the customer acquisition strategy – although I bet they don’t call it that.Add value / take out none (phone based cabbie social network), add more value / take out a little (transactions). Scale like crazy.

      1. Jay Bregman

        Supply breeds demand breeds supply…

        1. awaldstein

          Nicely phrased.Marketplace dynamics at their core.

    2. Jay Bregman

      About 5,000 NYC Yellow Cabbies have already downloaded it and thousands use it every week.

      1. takingpitches

        So about 12%…

        1. jfunk

          there are around 13k cabs in NYC.

          1. takingpitches

            And about 40K drivers of those cabs…

          2. takingpitches

            Yes, but multiple drivers to a cab (shifts). I understand there are about 40k drivers. Sent from my iPad

    3. fredwilson

      I think something like 5000 but I could be wrong about that number

  11. Barry Nolan

    Not only do I love hailo, but as important, so do the cab drivers. It’s cheaper, and more equitable for them (the favourite cabbies don’t get the best radio’d fares). Also the rate your driver, and vice versa the passenger, brings some much needed reputation management.

  12. Richard

    one thing i like about uber is that I know the quality of car. Im not a car snob, but certain cars are very uncomfortable. Will hailo ensure late model cars?

    1. Carl Rahn Griffith

      A black cab is a black cab is a black cab in London, Rich.

      1. jason wright

        and yet they’re not always black, Carl.

        1. Carl Rahn Griffith

          Lol, good catch! πŸ˜‰

          1. jason wright

            you set your own trap πŸ™‚

          2. Carl Rahn Griffith

            I usually do, Jason πŸ™‚

      2. Richard

        Many cities have no regs on cab models/model year.

    2. kidmercury

      uber seems to me to be for a higher class market, hailo seems more for the (increasingly impoverished) common man/woman

      1. Carl Rahn Griffith

        What next? Rickshaws?Biggest challenge will be that people still have the means and opportunity to go to places – jobs, leisure, etc…

      2. awaldstein

        ‘common’ person with now dollars takes the subway not cabs in nyc.

        1. Aaron Klein

          + Bloomberg and me (unless I’m late). πŸ˜‰

          1. awaldstein

            And I always. Faster usually except cross town,

        2. kidmercury

          that’s certainly true. though nyc is generally priced beyond the commoner’s reach

      3. Guest

        Totally off-topic, Kid – seen this? Yikes…North Korea video shows US city in flames after missile attackhttp://gu.com/p/3dhmk/tw via @guardian

      4. Richard

        we are beginning to be so brain washed as a society. Why can’t cab drivers compete on fares just like every other business? Uber and Hailo are not as disruptive as we think!

        1. Carl Rahn Griffith

          See what you mean but I believe the disruptive element comes from potential synergies elsewhere in this model. Its biggest threat is the relative indulgence that taking a cab has become – of course there will always be a fundamental demand in commerce city centres/airports, where it is an expensed item – bankers, etc. Oh, hang on… πŸ˜‰

        2. Matt Zagaja

          Considering the fixed costs of capital (and time) there is only so much that competition can push the price of a cab ride down before it becomes detrimental to user experience (or irrational for people to enter the market). Sometimes innovating on features and service is the better route.

        3. kidmercury

          i’m a cheapskate so i love to see businesses compete on price, although if you can differentiate, you can often get a higher margin — same concept in any sector

        4. JamesHRH

          Airlines don’t compete solely via fares.They compete on destinations, hubs, departure times, on time performance, plane types, reservation systems, service, etc.Cabs are, really, a ride in a sedan from where you are to where you want to go. It is a single point value prop that likely precludes price competition..

          1. Richard

            I don’t get it? For example, let gov regulate safety and number etc. cab driver # 1 could be more efficient and be able to pass on savings to riders. It works in virtually every other private sector enterprise?

      5. Carl Rahn Griffith

        Totally off-topic, seen this? Yikes…North Korea video shows US city in flames after missile attack http://gu.com/p/3dhmk/tw via @guardian

        1. kidmercury

          yes i did catch that. i don’t think a nuclear war will happen. though perhaps i overestimate the sanity of the world’s most powerful criminal organizations…….

      6. fredwilson

        Dunkin Donuts vs Starbucks?

        1. kidmercury

          well personally i find both those brands to be pretty crappy but starbucks does manage to differentiate itself so seems like an apt analogy here

    3. Carl Rahn Griffith

      If you’ve never been in one, Rich, they are very comfortable and spacious – sure they may not be ‘stylish’ but I (still) see them as more of a treat than a Lincoln Town Car from when I was in NYC. Can’t speak for other cities of course where often a generic low-spec Mercedes saloon is pretty ubiquitous – and far from ideal in many respects.The London black cab is purpose built and has evolved over many iterations. Love ’em!http://en.wikipedia.org/wik

      1. Richard

        it is a great car!

      2. fredwilson

        Me too

    4. fredwilson

      Its regulated cabs only. Yellow in NYC, Black in London, etc, etc

  13. Richard

    Can you speak to the on going passenger liability? healthcare is increasingly more expensive each year. What is the cost per ride to insure the passenger for Hailo?

    1. Jay Bregman

      We are a matchmaking service – an extension of a hail that allows drivers and passengers to solve the line-of-sight problem. We use existing licensed drivers and infrastructure so liability protections are already in-built into the taxi system.

      1. Richard

        Fyi, If a dispatcher, by inaction, becomes a proximate cause of some injury there may be liabilities.Β 

  14. takingpitches

    Also, the prior post now makes so much sense about delivering on your promises.Reading these articles, I like Jay Bregman a lot! Great contrast to Uber. Heads down, concentrating on Hailo. I also like the Berkman Center connection which I share…

    1. Jay Bregman

      πŸ™‚ Loved my time at Berkman – I was there in 1999.

      1. takingpitches

        Cool – used to know JZ very well!

        1. Jay Bregman

          He’s a star! I remember hanging out around his office with him writing papers with Pink Floyd blaring out fondly….

  15. jason wright

    my feet were made for walking

    1. Carl Rahn Griffith

      Luddite! πŸ˜‰

      1. jason wright

        i didn’t take to prams either.

        1. Carl Rahn Griffith


    2. ShanaC

      do you have nice boots for them though?

      1. jason wright

        is that a song i hear you singing over breakfast?

  16. jason wright

    i’d like to see stats for total taxi miles per year in London set against smartphone penetration/ usage. i wonder if it’s a positive correlation or a negative one? Weighted to take account of that city’s never ending population growth.

    1. Jay Bregman

      I would say miles travelled probably remains the same but earning miles increases. I.e. Hailo puts more cabs on the street without putting more cabs on the street.

      1. JamesHRH

        That’s a great line.

  17. ShanaC

    How much do you think favorable regulatory environments helped them? Not every city is as cool as NY – some are angry at uber…what do you think the battles will be?

    1. Jay Bregman

      London, in particular Transport for London and John Mason, who heads the Public Carriage Office, were extremely supportive of e-hailing and their approach was to set basic standards to protect drivers and the public and let the market decide winners. Check out his presentation at a recent conference here https://www.google.com/url?…

    2. fredwilson

      Complicated question. Its not a comment reply. Maybe a blog post. But not for me to write

  18. kirklove

    Figured it was them you were hinting at (#OreoTell).It’s interesting how both names signify their respective markets and approaches – Uber sounds overly expensive and their branding reflects that. While Hailo is much more utilitarian sounding and looking. People seriously underestimate branding and positioning and the message that sends. Design is just as important as tech. Maybe even more so now.Congrats to the Hailo team.

    1. jason wright

      both can exist, no?

      1. kirklove

        Not following? Hail O and Uber? Then yes. Design and Tech? Absolutely. So yes to everything! πŸ˜‰

        1. jason wright

          U and H.

          1. Richard

            there will be more

          2. kirklove

            Many.I’ve never understood the Internet philosophy of winner takes all. There isn’t one restaurant in the world everyone goes to. There isn’t one channel everyone watches on TV. The Internet and web services will be the same way – many, many niche services, often direct competitors. It’s a great thing for consumers.

          3. Carl Rahn Griffith

            Yes. There’s, what, some 6-7bn of us on this poor little exhausted blue dot nowadays, isn’t there? OK, not all ‘consumers’ as yet but the BRICs is changing that (poor buggers – welcome to our hell).

          4. Aaron Klein

            With networks though, it is winner take most for a given use case. I do think people hire apps to do a specific job for them, though. I could see Hailo owning cabs and Uber owning black cars.

          5. PhilipSugar

            I agree when you have network effects winner takes most.

          6. Richard

            Price will rule the outcome here in the long run.

          7. JLM

            .This is indicative of the maturing of the Internet, that everyone does not have to follow the “next big thing”. And only the Next Big Thing.Your comparison to the restaurant business is apropos.It is particularly insightful because even when location, parking, cuisine, ambiance, chef are considered — sometimes they have just one dish that works perfectly for you.Here is a Texas treasure, the Chicken Fried Steak. No, my friend, not “a” CFS, “the” CFS.Monument Cafe, Waco, Texas. THE BESTOn Earth as it is in Texas.Sorry, it was 88F yesterday and it going to be 75F today. Snowing yet?JLM.

    2. jason wright

      can’t ‘uber’ be a quality of service word? it’s very flexible, which can be useful, but can also cause problems.disclaimer. i’ve not used U nor H

      1. kirklove

        It can, yes. Though they’ve chosen to “brand” it more elite. This of course is my opinion. Others may and most likely see it differently. Though their pricing reflects a luxury service. A great one, but costly one.

        1. JamesHRH

          I think Garret Camp would tell you that the original idea was to position it above cabs.His next idea – blackjets – is even more elite. I love his ideas – he is making those markets more accessible (blackjets sells seats on provate jets, a fractional Netjets!).Very hilariously cool & neat idea for a certain segment.

          1. Cam MacRae

            A mob here called EmptyJets has been selling seats on empty return legs for a few years. You can also make an offer. I haven’t had cause to use it yet.

          2. Pete Griffiths

            still very expensive

        2. Aaron Klein

          I agree. Uber is branded as elite. I’d be much more likely to use Hailo because I’m price sensitive. Every time I’ve used Uber, I’ve spent ten minutes trying to hail a cab first.

    3. fredwilson

      hailo was founded by six founders. three of them are cabbies in london.

      1. kirklove

        Then I like them even more now.

      2. Pete Griffiths

        Wow! Three cabbies. That may explain why they did what they said they would. :)Some of your readers may not know the process that a London cabbie has to undergo to become licensed. Basically they have to undergo an extremely arduous training process to ensure that they have intimate knowledge of the city. This infamous process – ‘The Knowledge’- takes years and culminates in a horrendously difficult exam. It is why London cabbies know where they’re going. Compared with the knowledge, building a startup is a piece of cake.

        1. David Clarke

          ‘The Knowledge’ was of course for many years the barrier to entry for becoming a cab driver in London, leading to artificial scarcity and high prices. AFAIK it is still a prerequisite to driving a black cab in London, even though in the age of GPS it’s comically outmoded (and maps worked just fine before the age of GPS…). Moderately scientific studies (http://www.bbc.co.uk/news/h… have indicated that cabbies’ brains alter structurally as a result of studying ‘The Knowledge’. An unfortunate side effect appears to be a propensity for endless commentary on football and immigration policy…

          1. Martin Eriksson

            It is most emphatically NOT outmoded, at least until apps like Waze and Hailo capture some of the traffic data. The knowledge isn’t just the 25,000 streets and 20,000 landmarks you have to learn in a six mile radius from Charing Cross but also 320 routes and the best ways to get from one part of town to another. If you’ve ever been in a black cab you know they don’t follow the straightest route – but they’ll always get you there the fastest…

          2. Pete Griffiths


          3. David Clarke

            Fair point, they can & do dynamically adjust based on traffic, road closures etc. But this behavior is also highly algorithmic in its own way and hence also amenable to automation. The other point is that I am paying highly (in pounds and average wait time engendered by cab scarcity) for the privilege of what amounts to a tiny average travel time saving once I’m finally in the cab…

          4. Pete Griffiths

            I’ve always enjoyed taking a cab with a driver who knows where the *** he/she is going.And GPS doesn’t completely solve the problem as it is a poor substitute for local knowledge.But there is no doubt a cabby brain is neurologically speciated. πŸ™‚

          5. jason wright

            i could use apple maps to tell my cabbie which way to go to get to my destination.

        2. Jay Bregman

          Terry, Russ, and Gary will love this – forwarding to them now!

          1. Pete Griffiths


      3. William Mougayar

        I just read the WSJ article, and it’s a fascinating story. They look like a very smart & well managed company.

    4. Aaron Klein

      Fred did a good job of cloaking this with his Snapchat post. We couldn’t tell if he wanted to invest in cabs or sexting. (Both huge markets, LOL.)

    5. JamesHRH

      Bang on Kirk.Uber is still a great idea – if I was them, I would have tried to buy Hailo during this financing.Uber, in the end, is the smaller market – “why not town car it?”

      1. kirklove

        Great story Jay and props to the designers. Much congrats again.

  19. Richard

    how about some real disruption where drivers compete on price

    1. Aaron Klein

      Gotta get rid of the regulations that do such a great job of “protecting” consumers.

      1. JamesHRH

        I don’t have a problem with fixed fares – its a utility and has to be regulated.If you deregulated taxis, Manhattan (and the core areas of all cities) would be in permanent gridlock.Customers will ask for everything if you let them – @samedaydr:disqus !

        1. David Clarke

          You can deregulate supply while still regulating price– this was done in Dublin a number of years ago leading to a massive needed increase in the # of cabs; and the popping of a bubble in the secondary market for cab licenses. The actual prices charged are still regulated.

        2. Richard

          regulate numbe of cars, let fares float. Works for airlines

          1. JamesHRH

            fair enough.

        3. Aaron Klein

          Regulation cloaks itself in protecting the consumer but is really a self-serving partnership between Big Government and Big Business.As much as I like predictability as a consumer, it’s a simple fact that there would be more innovation and more great products like Hailo without the iron fist of controlled monopoly.

  20. Carl Rahn Griffith

    Where there are expense accounts/company credit cards there’s revenue/new market opportunities – ’twas ever thus, but increasingly so…

  21. brian trautschold

    the 2013 delivering on promises piece is an excellent one… To me, the biggest piece of that means you have to actually make promises. put your stake in the ground, and pin ears back to actually *doing* what you say. Great to hear about a team not only setting high expectations, but then exceeding those expectations…Not many companies are willing to swing so hard they may miss.

  22. Pete Griffiths

    Aaaah. So this is the team that overdelivered. Can’t keep a good Brit down. πŸ™‚

    1. jason wright

      is London British anymore?

      1. Carl Rahn Griffith

        Lol. Well, it’s certainly the world capital for money-laundering.

        1. jason wright


      2. Pete Griffiths

        If you’re a cabblie you’re a brit.

        1. Carl Rahn Griffith

          Top geezers – and lasses! – all.

  23. Youssef

    I’ve used Hailo about 110 times in the last six months without a single problem. Brilliant startup, totally disrupting the Taxi industry here in Dublin. True democratisation of the public service vehicle, as they are classified here. The irish Taxi Regulator should have built this 5 years ago, and it should be a standard across all cabs. Anyway, should have, could have, more power to them. Hailo is Fantastic.

    1. Jay Bregman

      Really appreciate this – Irish team has worked very hard to build a great service – and the drivers really are wonderful and passionate. It reminds me of London but growing even faster. Cork is next btw.

    2. fredwilson

      It was what they did in Dublin that really convinced us

  24. mydigitalself

    Hailo is by far and away my app of the year for 2012. Not only does it make hailing a black cab easy, but more importantly is how easy it is to pay with your card on file. No more hunting around for ATMs whilst the meter is still running.PS LIAD: In London, I wouldn’t in any way describe them as a lower-end part of the market. Sure, they aren’t Uber, but black cabs are in a class of their own in terms of the market.

  25. awaldstein

    Looks like I’m going to experience the battle for New York. Looking forward to this.

  26. andyidsinga

    what does “higher liquidity of cars to their riders” mean? _more_ cars for their riders …or something else?

    1. Jay Bregman

      more taxis available – or more specifically, more taxi capacity available. Hailo cabs spend most of their day hunting for fares on the street so we have wide and shallow networks where drivers pick up only a few incremental fares but passengers get <2 min service in scaled cities like London.

      1. JamesHRH

        Cool that a such a marginal asset utility increase can drive such strong consumer performance improvement.

    2. fredwilson

      More cars

  27. jimmystone

    Congrats. I really like this company. Great taxi hailing iteration.

  28. markslater

    you were mentioned and quoted in the boston globe…..We were interviewed about it yesterday……see you in the market.

    1. fredwilson

      I will check it out

  29. PI

    Love this concept. Ever since I fell victim to Uber’s surge pricing I was hoping someone would come along and offer the technology perks while still allowing the consumer to be protected by regulation. This seems like the answer. Exciting stuff.

    1. Jay Bregman

      Watch this space – thanks for the kind words.

  30. kenberger

    I just sat down with a founder of a competing incumbent and he was saying how it’s problematic to have “taxi”, “cab”, “limo” etc in your name because you then are open (in the US) to being regulated like a T&LC company. This is the reason that Ubercab changed to Uber, Cabulous changed to Flywheel, Taximagic is debating its options, etc.So I predict that Hailo is addressing that their URL is hailoCAB.com (cool as that phrase sounds).

    1. Jay Bregman

      That restriction against those words only applies if you provide non-taxi services (e.g. Black Car, Limo) which we don’t do. It’s meant to prevent passengers from being confused about what service and price they are getting.

      1. kenberger

        ah, very informative answer, thanks.I love it when the founders show up here at AVC.

        1. JamesHRH

          Jay shows up with his homework done – impressive.

        2. fredwilson

          me too. that’s the way to do it.

  31. LE

    I really like the idea and understand this is a primarily an app but I have to say that the naming is a problem.My first reaction upon seeing this post was “hailio” not “hailo”. (“ilio” would be more common (because of “io”) then “ilo”.My 2nd thought was “hailo.com” which is owned by a german company.Branding as “hailo” and having a website of “hailocab.com” will cause issues. Doesn’t have the “pass along” value and there are several ways to misspell it.At the very least they should refer to themselves as “hailocab” not “hailo” and even then I still don’t like the drawbacks (but at least you remove some problems).

    1. awaldstein

      I think this is less of a problem cause its an app and honestly on the street brands just don’t suffer from the same issues as category based online businesses.Soul-Cycle is the best case in point that jumps to mind. No one does or really can spell them!

      1. LE

        Owning names as I do I’m in a unique position to see the traffic loss by not having the correct domain (misspell, typo, hard to pronounce etc.). Depending on the situation it could be trivial or significant and in any case it’s a “leak” in marketing.Take the simple “pass along” test. You see a friend in a cab line and you want to tell them about this great app they should use. How easy is it going to be to relay this to them so they can easily find it (and even remember it)? Or if they get a guest spot on a morning show in a city how easy will it be to remember the name?Now once the app gets ubiquitous that’s less of a problem you can misstype it in google and they will know what you mean. And people will just know (like “Oprah”).By the way if you google right now “cab hailing app” the attached comes up. A few stories on the funding and then in position 3 a competitor with a similar name.Here’s the point I’d like to make though. In business you need all the advantages you can. There are plenty of names out there and there is no reason to settle for a name that is potentially problematic. It’s not that hard to come up with a short name that doesn’t have drawbacks and is brandable and that means it might not have “cab, car, taxi” etc. in it.The main reason startups come up with so so names is they get fixated on a name and can’t buy it for lack of funds. Then they rationalize that it’s not a big deal by looking at some others that have been successful w/o putting effort into naming. This is understandable given the resources of a startup of course money wise. But once you get funded you can afford to put some attention into your brand which will be pretty important. Even if you have to rename your company.

        1. awaldstein

          No argument on any of these as you are the pro.Where I disagree is that it will hurt it significantly.How it sounds is as important as anything else in an app based, socially shared world. No one spells a company name for me, they send me a link. I don’t think I”m an exception.

        2. Jay Bregman

          I think in the mobile world URLs and Google searches just matter less. We don’t get a lot of people searching on Google for a taxi hailing app…

          1. JamesHRH

            Name is great.Halo of cabs around me.Hail / Hello play on words.And your cabbie customers will be your best app channel by far.Love the ‘ad agency guys with investor badges at the launch’ story I came across – smart move by both parties.

      2. LE


    2. Jay Bregman

      This was exactly my thought when we were starting. But then I remembered that we are a mobile-focused business. Our biggest channels are app stores. Not URLs. Searching on “hailo” is easier than “hailocab” and keeps us open to layering additional products and services (not taxi related) to consumers in the future…

      1. Richard

        Big marketing opportunity in the US with the Latino and African American crowd.



        1. JamesHRH

          + 1Safari now comes with unified search / URL box.That will drive URL typing down even further.

  32. Dasher

    Congrats Fred.This is an example of an investment where there is a lot of competition and is somewhat crowded space. I would guess that must by why you passed on them initially. But their execution gave you the comfort that they can one of the winners in this space.Can there me multiple homeruns in this space? Does this have network effects that you look for in you investments? If there are network effects then the market tends to be winner take all. If there can be multiple winners, then this indicates little or no network effects which is against your thesis. Interesting dichotomy, no? How do you see this space?

    1. Jay Bregman

      Don’t want to put words in Fred’s mouth, but the market is large enough ($40B+) to support a number of billion dollar businesses. We hope to be one of them but there may be others. There are very strong network effects within cities but also between cities which are due to brand but mostly at this point institutional learning / strategy / and executional capability. It’s interesting to note that the VC community feared that the market would fragment by city or region but that largely has not happened – actually it’s the reverse – there has been massive consolidation and we believe this will continue. This is not an easy business to get right.There is an interesting discussion of this point in a panel with me and Travis at LeWeb London – http://www.youtube.com/watc

      1. Dasher

        Thanks Jay. Congrats on the new round lead by an awesome VC firm like USV. Wish you continued success.

    2. fredwilson

      There are network effects but they are strongest in each geography and less strong across markets

      1. Dasher

        Thanks. This means there could be room for multiple winners since there are many geographies. This is a land grab game with multiple players with different approaches.

  33. joe

    Wonder if something like this could be made to work for airplane travel…

    1. wiwa

      I would love to be able to hail an aircraft flying overhead, have it land and pick me up on my street. That’s the future!

  34. Obi Offorjindu

    Fascinating market developing in London. You have Hailo and GetTaxi in direct competition and Kabbbee, who are focusing on “minicabs” – private hire cars which are much cheaper than the taxis. I just saw an ad for Kabbee at the subway station so I wonder how well they’re doing and how well they are funded?

  35. Chris Phenner

    Halio is buying *radio ads* in Chicago (WXRT, for one) and I cringe every time I hear one — no tracking and those locally-targeted spots must be so expensive.I love the news, and I can’t wait to try them, but I cringe at that channel of spend.Chris

    1. Jay Bregman

      I share your concern! But this is a different kind of business where normal digital channels don’t work. It’s all about creating awareness of a new service most people don’t yet understand. Our most effective advertising is on taxis and word of mouth from taxi drivers to the many passengers who are not yet using Hailo.

      1. JamesHRH

        Radio is the next level up for word of mouth.Interesting that social media has value for your customers but does not seem to be a driver of their customers adoption of the app.Of the traditional media channels, radio is, by far, the least affected by online media competition or digital content distribution disruption.Not a bad spend, if you get an experienced hand to lead the campaigns.Full disclosure, I started my career in the radio industry.

  36. John Revay

    I guess now Fred will leave the scooter home and stop riding the subways πŸ™‚

    1. JamesHRH


    2. fredwilson

      nope. taxis are a part of my transportation mix and always will be. but i am not giving up the scooter and the subway.

  37. Elie Seidman

    Has struck me that Uber is basically trying to rebuild Carmel/Dial7/Boston Coach but with VC money and a very temporary advantage of having a mobile phone app. But the cab/car companies have historically adopted new tech (phones, radios, pagers, etc.) pretty quickly. Borrowing from the travel space, better to be meta search – let the cab companies do what they’re great instead of fighting them at every turn.

    1. JamesHRH

      Elie – single app for every cab company on the planet has large consumer convenience value. More of an advantage that it appears.

      1. Elie Seidman

        Definitely agreed. Maybe it’s the wrong parallel but I think of it as meta search. The underlying cab brands – that already exist – stay the same but I get the benefit of being able to reach them through a single app. From my vantage point, Uber is trying to be both the single app and the brand of the cab/car company. Seems not worth it.

  38. Abdallah Al-Hakim

    The “I told you so” is a powerful example of how to impress VC. Also reading below that 3 of the founders were cabbies makes this an even more compelling story. I will be giving them a try soon as some local stores in Toronto are handing $5 off coupons for the first hailo ride!

  39. William Mougayar

    Aren’t you going to miss blowing a whistle to hail a cab in NY? Maybe they should add a special feature that simulates a whistle sound as soon as the cabbie is nearby πŸ™‚

    1. fredwilson

      yes, i will miss that. i am pretty good at it.

  40. Donna Brewington White

    Congratulations on the formal announcement and what seems like a sweet investment.Just signed up to be a founding passenger in NYC. Country bumpkin that I am, one of my favorite aspects of visiting NYC is taking taxis. Now it will be even more fun! Hope they arrive before my next trip.

  41. Carl Rahn Griffith

    Only just realised Richard Branson is also an investor – interesting…

  42. Prokofy

    I like the sound of this better than Uber, which I loathe for their culture and their defiant disruption for disruption’s sake — Paul Carr’s series of articles critical of them on Pando Daily was terrific.Instead of displacing immigrants who need taxi driving jobs for entry into American society and the work force, with unregulated drivers who work for elites with expense accounts that can accelerate and disrupt maniacally, this seems to drive the innovationfrom the needs of the drivers, by making a social network for them and a way of accessing their social network for customers.I’m going to withhold praise, however, until I see if it gets the critical mass. It isn’t just about uptake of yet another ap. It’s about whether all cab drivers have fancier smart phones. All cab drivers have cell phones now — that’s a given. And they chat on them with their friends and fellow drivers all day — another given. But do they have cheap Metro PCS phones with only SMS text or have Androids come down to a low enough cost that somebody who has to pay $150 a day to the medallion owner before he himself can make a penny will be able to buy it?There’s also the question of whether this could increase accidents because drivers will be tempted to keep looking at their phones to see if messages are popping up with fares. I don’t know if there’s a way to make yet another gadget that mounts on the dashboard or to make it audio or what to do about this but it’s an issue. Of course, in start-and-stop Manhattan traffic it’s less of an issue than elsewhere.

  43. Tom Labus

    It’s nice when things work out with a year like that but things have a tendency to even out so maybe a few bumps in the future.

  44. William Mougayar

    Today in Toronto, incidentally the big story was that about 200 taxi drivers are estimated to have unchecked criminal records because the city checks them only once every 4 years.Hopefully, Hailo would be more diligent with their drivers in Toronto & I’m getting the sense they are propagating some of the London cabbies qualities into other cities by virtue of their expansion.

    1. John Revay

      HUMM, Carefull who’s care you hop in.

  45. NYC Events

    Smart move & yet better choice.

  46. jason wright

    how well does this business fit with the usv thesis?it seems geo constrained, with regulatory hurdles and barriers, and cultural issues.

    1. fredwilson

      it’s a large network of drivers and passengers

  47. aminTorres

    There must be an amazing feeling in the air at USV when investments are finally announced. – Congrats!

    1. John Revay

      I wonder why there is a delay….If I got funded by USV…or any other blue chip firm – I would be peeing in my pants to tell the world!

      1. aminTorres

        There are all kinds of strategic reasons why team/investors would want to hold off the cheering… Some may be to get to certain milestones without much disturbance in the process, I’ve seen this done when companies want to sneak ahead of competitors… One reason I would personally opt for is to make some sort of synchronized impact, get a few press items lined up, some product launch or some event. etc… am sure Fred has 10 other reasons he could share.

        1. John Revay

          Thank you – I figured as such – many reasons…I recall when Fred announced the Brewster investment – it was 6 + months after the fact – they were building the app.

  48. charlie osmond

    As a Londoner, Hailo has changed my life. That sounds like a grand claim, but for example, last weekend I sent a cab to my daughter and was able to watch her snake across the city to me. Huge saving of effort and emotion.Great business. Great execution and great to hear USV are an investor in a plucky London startup.Charlie

  49. John Revay

    Nice that they have both iOS and Driod….Makes sense especially since their footprint is International.I will look forward to Hailoing a cab in NYC