Hailo and MyTaxi
The news broke this morning that our portfolio company Hailo is combining forces with MyTaxi.
The combined company, which will operate under the MyTaxi brand, will be the dominant taxi hailing app in Western Europe.
Hailo is huge in the UK and Ireland and has a strong position in Spain. MyTaxi operates in Germany, Australia, Italy, Poland, Portugal, Spain, and Sweden. So this combination is a great strategic fit and the new company will benefit from a lot of synergies.
Andrew Pinnington, the current CEO of Hailo, will become the CEO of MyTaxi and the company will consolidate its operations in Hamburg Germany. The combined company will be majority owned by Daimler.
Unlike the US, the regulated taxi business in Europe got on the ridesharing bandwagon early and it is as simple and easy to hail at taxi in Europe as it is to use Uber. If you travel to Berlin frequently, you will know that ridesharing in Berlin is all about taxis.
I can’t reveal numbers, but the combined MyTaxi/Hailo business will operate at a scale that puts it in the big leagues along with Uber and a number of other emerging winners in the ridesharing business.
This is a great outcome for Hailo and I would be remiss if I didn’t thank Andrew Pinnington for his incredible leadership at Hailo over the past 18 months. Without that, none of this would have been possible.
WOW! What an investment direction: Taxis in Europe! Daimler! Good grief. Super cute result of smartphones.
Just noting: Uber is allowed only in a few countries (greater London/UK, Stockholm Sweden) – uber is banned in Germany, France, Spain, Finland, Hungary, Bulgaria and many more. Taxi business in Europe is very different than US and Asia. Long time for VCs to understand. Looking on the funding history and potential offers in the past (as revealed by hailo CEO via Techcrunch) I am wondering why it took so long for this deal. 60/40 share deal, winding down from 75 to 20 people in London (Source TC) and using myTaxi App & platform for the future in all markets shows the realitity of the deal. Still wondering why a corporate deal was accepted (no exit/no valuation) keeping in mind that you oposing in general coporate venture capital deals. But maybe it is a good start to see a positive side of this business for the future.
corporations are great for exits. daimler owns a majority of this business.i am not a fan of corporates for minority investments although many of our portfolio companies do them anywayyou may think that i have the ability to control what our portfolio companies do and if you think that you are wrong
As a VC myself I do know we have no control over our portfolio companies – neither in selling nor in who is investing in them in future rounds. I was the one who exited mytaxi to Daimler, so I agree they are a good owner of the business as well as they were a valuable co-investor when together with them on the board. Having Nic Mewes, founder of mytaxi, at the helm of Daimler Mobility Services and in the supervisory board of mytaxi is great to ensure an entrepreneural spirit for the future of the business.
>> i am not a fan of corporates for minority [email protected] Interested to hear your reasoning – would this also apply if they where a channel partner for B2B2B ?
My personal view for the ride sharing industry is that it is overhyped, great utility but as a consumer I see two things happening quality of experience decreasing (at first Uber drivers used to open your car doors now they don’t care) and prices decreasing. In other words the race to the bottom. Given my 10 years experience on Wall Street and valuing public companies and having being involved in several IPOs, and without knowing details of Uber numbers but have some decent general sense, I believe strongly that Uber’s IPO will be a disaster and most definitely will not sustain its c.$70 billion valuation, which will impact negatively this whole craze with ride sharing industry. My prediction Uber’s market cap will settle around $25 billion in the public markets…
I agree with you. If future in ridesharing is selfdriving electric cars, the apps managing a ride are a minor piece of the valuechain. Batteries, cars, driving technologies are the main parts to look at. So either carmakers or Internet platforms are dominating this space in the future. Uber is neither of them and even an IPO is at risk as more time goes by. Apple, Amazon and Google can provide more functionallity and market reach (eyeballs) to carmakers in the future. As we have seen in Yahoo the valuation of a vertical platform provider can go into free fall very soon.
If you live in NYC Uber is a transportation delivery infrastructure.
I do live in NYC even as a transportation delivery infrastructure it is not worth $70 billion, most definitely overvalued, especially on EBITDA and Net Income basis, which apparently both are negative. For comparison purposes FedEx, which is a true and proven delivery infrastructure is worth $43 billion. How on earth is Uber valued at almost 2x FedEx? The same issue I have with Compass, the real estate brokerage firm which is trying to raise money at 3x the valuation of Douglas Elliman, a true powerhouse in NYC residential real estate. It is ridiculous!
I dunno if I agree but I”m not a banker, I’m a technologist and market maker.Got to wonder though where the core of the change is for us urban dwellers.Everything we want can be delivered basically same or next day with invariably no delivery cost.Where is the power?With the backend like Fed Ex or UPS or with Amazon?I find being less sure much more useful a poise as change sweep continually over us.
Congrats Fred! I hope this will improve the user experience. I’m London-based and deleted my Hailo app. Strangely the experience with Gett is always better (exact same cabs and cabbies). However during my 50+ business trips to Germany, I found myTaxi to be the benchmark. The fusion won’t be black and white, but there are some best practices for the taking.
Seems like congrats are in order Fred.Planning a trip to Porto and about so I’ll be downloading one ap it seems.
> If you travel to Berlin frequently, you will know that ridesharing in Berlin is all about taxis.Funny – I am in Berlin almost every month – and I never used a taxi there – public transport is so excellent I find there is no need at all !There is a need to eat great currywurst at “esS” Bahn Tegel though – best public transport system in the world ! – So good its got to Stuttgart already ! (see below)None-the-less I do agree that Western Europe is a great fit for these companies – well done !
i sometimes see Uber branded taxis where i am in the UK, but i’ve never seen the Hailo brand.
Nope. This is what people do in Berlin: https://www.blablacar.co.uk and across Europe. HAILO had a 22million loss in 2014. Don’t know anybody of my friends in London who uses HAILO. They UBER, ADDISON LEE or BlackCap.
Yup, Blabla is big in Europe. Do you think it can enter North America?
Possible. It might be that people just don’t trust each other that much in North America. Safety and fear is a big issue in some states.
Social acceptance is def part of it
Use Hailo a lot in London. It’s crucial when using a wheelchair. All black cabs have ramps.
Uber is definitely not the only game in town. Although they are strong in some cities, they are weak in others. Recently at the San Jose airport, the Uber wait was 15 mins, so I hoped in a cab.In Paris, you can’t schedule a reservation ahead with Uber, but you can with others, so I reserved one with SnapCar and proceeded to experiment with AlloCab, Chauffeur Privé and LeCab, all of them giving equal level service as Uber. You couldn’t tell the difference. There seems to be a levelling off of Uber’s market growth from an anecdotal perspective. Imagine if Uber was a public company today, their stock would have taken a small beating on this news.
Most correct.In places like NY you realize that Uber is not a ride sharing app but a transportatioin infrastructure. PU food, checks, packages. Huge power here.Ride share is a commodity. A software driven transportation ecosystem isn’t though.
NYC seems to be a stronghold for Uber, no doubt about that.
i use it here for some things but mostly for transportation deliveries not as much rides.When in LA, it is an absolute essential ride share.So depends.BTW–hugest change here is the massive offering of Amazon going head to head with Fresh Direct for next day order ahead on your account food delivery.
In NYC it brought a better class of service – unlike many places all Uber drivers in NYC are commercially licensed, professional drivers. All of their cars need to be certified by the Taxi & Limousine commission and many of the initial drivers were long-term cabbies who wanted to strike out on their own (which was price-prohibitive before due to the high cost of yellow cab medallions). Service went up, car quality went up, driver happiness went up. At the same time it pulled the best riders from the yellow cab ranks and it was a very easy sell for frequent business travelers to switch over to Uber.This is a very different experience than in cities where UberX can summon a dinky car with a questionable driver.
There are advantages for Uber to have stayed private so long, but I also wonder if at this point it’s hurting them.
Here in Berlin, a key issue with using the MyTaxi app is that sometimes the driver will guilt you into paying cash when they drop you off. This really kills a key element for me in using a taxi at all. So I wind up using the Uber app (somewhat reluctantly, because they sort of lie about launching their normal service any day now) to hail a taxi instead, as I also see most US visitors do. I do agree however that the mytaxi app allows for more options (such as a baby seat).And cabbies tell me that taxi.eu / taxi.berlin pull from a much larger pool of cars than MyTaxi does; lots of locals use that instead.Me personally: head over heels for DriveNow (and e-mio scooters, like Scoot Networks in SF). I use DN to drive myself (and others) everywhere, especially to the airports.
I’ve used both: MyTaxi in Spain (which at the time had a really strange yet perfectly functional way of paying via app) and Hailo in Ireland, UK, and for a short wonderful spell in NYC (sniff) – I remember it had an excellent UI. Apps that better enable the utilization of existing infrastructure vs. introducing an entirely new layer have more long-term value to me as a consumer. All of the taxi drivers I’ve spoken with seem to like the apps too (vs. Uber which is universally perceived as stealing business and running around regulations that professional commercial drivers need to adhere to) and a few have found interesting ways to build their own book of business (for example, the cabbie I hailed via MyTaxi in Madrid to take me to the airport offered up business cards w/ his Whatsapp which he’s using to build a book of clients directly, especially for pre-scheduled and longer rides).I’m excited for this merger while wondering how far away are we from an auction-based transportation dispatching model (as consumer, I request car with X seats at Y location; multiple providers who can show up within a pre-specified wait time & price tolerance submit bids for the ride, and winning ride gets assigned to passenger).
Albert Wenger wrote about that last part you mentioned, as a personal bot that goes fetching for you. Technically you could set up a bot that gives you price & arrival times, like a Kayak. I’m surprised that no one has done it yet.
People have tried – the problem is that it requires you to go fishing into various systems that are generally very poorly architected if you want to access the smaller taxi and private hire firms. Also taxis are an on-the-spot decision vis flight and other travel which is pre-booked and therefore gives you more time (and upside) to compare.
True, but a percentage of trips are pre-planned, like going to the airport or restaurant or events, etc. This might apply better initially to scheduled trips, which Uber doesn’t accept.
Yes – it could mirror the way ad auctions work in programmatic advertising quite well, which is one of the reasons I’m thinking about it (and we borrowed liberally from stock trading before us).What’s missing is a centralized payments option — e.g. when you book a meeting in your calendar on mobile (and calendar is just one of the many potential starting points) you have the option to add transportation. A bot then takes your pre-configured preferences into context, puts the ride parameters out on the auction, and providers then place bids for the ride. You as user get one bill for transportation (or perhaps have a subscription of some type).I’d say that that’s what’s missing from bots today – a payments layer and framework although I’m reasonably sure I could hotwire most of what I’ve described w/ a bunch of APIs and Button.
Why doesn’t uber accept scheduled trips in your opinion?
They’re starting to – rolling it out to business customers first:https://www.uber.com/info/s…This will in turn enable more automation (e.g. automatically request Uber for every flight in your calendar). Scheduled meal delivery (via Eats) or weekly meal subscriptions probably aren’t far off.
In regulated taxi markets there is a fixed price based on time and distance. So there wouln’t be competing offers. The other side of this fixed price model is the support of mobility in times were there are no metros/tubes/buses are running: no low prices as well as no high prices via auctioning. (Would be unfair to cabbies if no surged pricing is allowed but discounts should be possible)
Competing for the customer – not for the price of the ride. This is what Uber’s matching algorithm does today but in a non-transparent way (and w/ no way for other car providers to submit their bids for the same customer and ride).Also consider transportation subscriptions for consumer that also extend to certain types of on-demand car rides (e.g. only short distance, or up to 6 airport transfers p/m included).
mytaxi is offering a ride for cab drivers via its system. But all will have the same revenue and the same fee (7% of a the ride revenue). So that side is covered as well with other e-hailing apps.
Congrats. Good move by them. I look at different “apps” with an international context now. Can they be used anywhere? For example, that great app that works in NYC, Boston, Chi, SFO and LA-can it be used in rural areas? Can it be used internationally? International market is huge, if you can get it. It’s not to be ignored. There are a number of different startups taking on the same thing. If they get big enough, PE firms could decide to roll them up and create a bigger business instead of a fragmented one.By the way, this works well if integrated correctly. Matt Maloney did a bang up job integrating Grub Hub and Seamless-and it lead to an IPO.
Rural–is there really an mobile application for rural use that speaks to growth, stickiness, anything? Eludes me.
Europe is different than the big countries like US, China and India > regulations, payments, firms. So there were many hailing apps per country but only a few left: mytaxi, cabify, get(taxi), and cab owned taxieu, G7/Taxibleu. So definetly a market for PEs to go for consolidation. It looks like Daimler made the move to kick it of. So interesting to see if they pick up more or if a PE will do a counter strategy to pick the rest to compete with Daimler. At the end of this game there will be either a new partner for Didi/ola/Lift/grabcab or a takeover target for uber. However still the question will be a pure hailing platform player can compete with carmakers or Internet giants.
I’m glad Hailo has found a home because it would seem it wasn’t able to raise any further money. The “uber” factor must have been a big one when they were out pitching for their next round.The UK taxi market is highly regulated. Uber are discovering this, you can’t just sign up to be a driver you have to have to be licenced.
Congrats to Hailo and the MyTaxi teams, and to the investors who believed in the teams. This is entrepreneurship at its finest!
Great outcome for both Hailo and MyTaxi. This combination results in a focused European leader and a real fighting chance of regional pre-eminence. Congrats to Andrew Pinnington and the Hailo team on a tremendous result.
I don’t get it:There are cab companies. If want a cab, then call a cab company.Well, sure, if are away from home, then need a phone. Since now there are fewer public pay phones, maybe need a cell phone, maybe a smartphone. So, get a smartphone and call a cab company.But why does this simple use of a smartphone to call a cab company result in huge new businesses such as Hailo, MyTaxi, and Uber?And, for such a big business, why should they have a big enough advantage over just the old, small, local cab companies to become so big, e.g., spread over several whole countries, get backed by VCs and Daimler, etc.What’s going on?<———–>Okay, reading more today, maybe the reasons for Hailo, MyTaxi, Uber include:(1) The customers are mostly people traveling long distances, say, between cities, usually via air, maybe sometimes via rail.So, these customers need cabs but usually don’t know any good, old, traditional, local cab companies to call.So, with a smartphone and an app, in nearly any town they go to, they can call any one of Hailo, MyTaxi, Uber easily without bothering to find out about local, old, traditional cab companies.(2) Maybe the customers get to use a smartphone app to pay for the cab ride.(3) Maybe via the smartphone app, the customers gets to give feedback back to the central office on instances of poor service. The feedback gets a customer ID from the means the customer used to pay for the ride — so, the customer gets a feedback track record at the home office of Hailo, MyTaxi, Uber.(4) Maybe the driver for Hailo, MyTaxi, Uber gets to give feedback on customers who are rude, that feedback tagged with both the driver ID and the customer ID.Then a customer-cab ride matching algorithm can try to avoid matching drivers and customers with bad feedback histories.(1)-(4): Are those some of the main reasons for Hailo, MyTaxi, Uber?
You are missing a few steps. 1) I want a cab 2) I find the number of a local cab company 2) If it answers, I tell them where I am going and they refuse or quote a really high price 3) If it doesn’t answer, or can’t do it, or the price is too high, I repeat this process every time I want safe, reliable transportation. Even if I know some reliable local operators around me what about when I am across town or across the continent? This is the reason why smartphone hailing networks exist – they take away all the friction from the ordering and tracking process while applying consistent upfront pricing and payment methods across the network. This is a lot more than an “app” in and of itself, which explains why the scale and technological complexity of these networks is high by any standard.
Thanks. After I posted, I read some of Ana Milicevic here and guessed at points (1)-(4) I added to my post while you were giving maybe a similar answer. Thanks.I’ll try not to be so slow witted next time!
What I have experienced is faster service, as drivers near your location are more likely to serve your request. Another benefit is that your know the cab’s plate number and driver name in advance for future reference if you, for instance, left something in the cab. One thing I like is that you can rate the driver as you mention, I am not sure but I think they can rate the passenger too. All goodies in my opinion.My inner dinosaur thinks it is just ‘automated demand management’ plus some perks 🙂
I was slow to see that frequent airline travelers could really like those big brands. Of course, the big shot flyers use limos for the last miles at each end! And, don’t really know how to fly unless have own 757!But a few times I used a cab in my town, I quickly got to know about the company and some of the drivers.Once communicated a little with some guy maybe high at Uber about optimization. Eventually it looked like he wanted a really good solution, really easily, for some poorly formulated problem that likely didn’t have an easy solution, much less a really good, easy solution!Yet again, I saw that it’s better for me to formulate my own problem, then solve it. And I like Trump’s advice to Ivanka: As long as you are going to think, think big.So, I shouldn’t get bogged down in some nearly impossible problem, formulated by someone else, someone who wouldn’t do much good for me anyway.Or, another part of the lesson: Go all the way from the formulation of the problem to the guy who serves the customers and users and actually receives the revenue as his own! So, don’t solve a likely poorly considered problem for someone else, and don’t let anyone get between you and the paying customers!Be the one who gets PAID! And, of course, OWN the business!
cab companies still provide the cabs and rides. The reason is just digitalization of industries. The old economy was to slow in adapting users behavior. Like you order pizza via app or do banking over an app. If cab companies would have jumped on this trend in 2010 the raise of this wasn’t a matter in Europe where cabs have a high quality and safety standard. In U.S. the raise of Uber is mainly driven by the poor quality and safety of cab companies. NYC and other metropoles may be the exception, but in general Uber is a better standard. in Germany when calling a cab you will get a Mercedes E/C class, BMW 5 and an Audi 6 as a ride. Thats another reason why Uber is not taking off in European countries: the quality difference is just too narrow if any. The only way to enter the market is on lower prices – something Uber in the long run wouldn’t like to see as a strategy.
I took a taxi in Ireland a couple weeks ago- a regular one, not a ride-sharing one- and the driver and i had a nice chat. At our destination, he got out his cell phone and asked for my number. I kind of froze because I just usually expect to pay by credit card. He said I could pay by online- he just had to send me a text. Yeah right, I thought. I started looking for people who could help me in case the situation got dangerous. I said, sorry, I can’t; my phone is on airplane mode, which means I won’t be able to receive texts. He told me to take it off airplane mode and I said, sorry I can’t because I’ll have a huge bill when I get home. Can I just pay with cash? He said no. Omg, my heart was pounding. I didn’t know what we happening, because this all felt so creepy, him insisting he have my phone number, but he didn’t look like he was being malevolent. Finally I realized that I read about this stuff all the time on Avc and I wasn’t being kidnapped or robbed, so I persuaded him that I would get out of the car (which I really needed to do) and go to a nearby hotel and log onto their Wi-Fi, from whence I paid him his 25 euros through Hailo. Just another day in the life of a savvy world traveler. But honestly, do people just take their phones off airplane mode at random intervals during their travels?
Wow. That story is astonishing. Refusing cash? Bizarre.
He just really wanted me to pay over an app.
You’re not explicit but I assume that you didn’t call the ride using Hailo? Given that he refused your cash, I imagine that might be easier for his tax affairs. The less cash he takes the less time-consuming scrutiny he comes under from the tax inspector. Another possibility is that there’s an incentive to put as many fares as possible through the app – lower card commission perhaps.Very interesting experience you had. Not good that you were put into a position where you felt so uncomfortable.
I relayed it more to poke fun of myself than to criticize the company. It was a regular, normal taxi cab called by the concierge at my hotel. Before the Hailo link he sent me, he’d also tried sending me a link through another online payment system. And I had offered to get cash from the ATM at our destination, but he preferred online payment, so we sat there fiddling with it for a bit. It was awkward, as I did think he was crossing a line asking for my phone number, but it slowly dawned on me this was the new fangled way of doing things. I just didn’t want to give out my number. He said taxi cab companies aren’t allowed to carry interac machines in their cars anymore because if they got stolen, they have everyone’s credit card information in them, although that must be a local thing. I’ve paid by credit card just fine before.
I had a similar experience where, also in Ireland, because I didn’t have any cash, I asked if he could take a card and he said only through an app (not Hailo though) which involved him sending me a text, me following a link, and then the whole thing not working. I ended up getting cash from the concierge at my hotel.A couple of days later I used Hailo and it worked perfectly.
two notes to this: 1) safety for cab drivers – while cashless payments are taking off in Europe it will decrease the risk of cab drivers being mugged for having cash in their pockets. paying via app, paypal, etc. will limit the amount of cash and change they need to drive around with. Also it is preventing tax evasion. Recent study in Germany found that 20% of rides are not marked legally taxes by taxi firms. 2) Roaming costs by Telcos are history soon. T-Mobile US is having roaming free calls/data in 100 countries. ATT and Verizon should follow soon while European carriers are forced by EU laws to eliminate roaming costs by 2017 latest.
Congrats on Hailo.Is there a long term business interest for Diamler in providing the vehicles for the fleet?In South America both Easy Taxi and Safer Taxi dominate the traditional cab online ride request market and Uber is the market disruptor with normal and shared rides. Not exactly the same business model but I think it will eventually converge, as the regulated cabs that actively fight Uber adopt the apps and put themselves into the same business model and out of regulation. I ask drivers what is the ratio of the rides they get from apps relative to the total and the answer is usually between 30% and 50%.Both app/companies charge a fee to the driver, not the passenger and it is usually paid in cash or with credit card according to the regulated meter. It works quite fine out of rush hours, never before I had a cab at my door in 4-5 minutes, which is really instant service if you consider the time it takes to get out to the street. If world coverage to follow Uber is important, Easy Taxi or Safer Taxi are interesting to consider.http://www.easytaxi.comhttp://www.safertaxi.com
Was the decision to HQ in Germany influenced in any part by Brexit?
as the share deal is 40% hailo shareholders and 60% myTaxi (daimler) and the tech team of myTaxi will maintain the tech infrastructure based on their systems keeping the HQ is more obvious. myTaxi is maintaining more tech platforms for Daimler – e.g. car2go, movel etc so it would have happened this way also without Brexit. London is still very expensive to hire compared to Germany for engineers anyway so also economically it does make sense.
Once upon a time, I was traveling like crazy. Every week, I would call cab companies to go from the home to the airport and back.They were often not available, or would not show up on time. I would need to be on the phone giving detailed directions to my home.The experience of using a credit card was time consuming and painful, the pricing would vary across drivers and cab companies, and the drivers would some times be rude and unprofessional.I had no choice as a customer except to bite my tongue and hope the next ride was better.Uber, Lyft, Hailo and others have changed all of this.The app is just a front-end. The real magic is that it is more easy, more convenient, more affordable, more transparent and more accountable.What has made this seemingly little idea of an on-demand taxi service a multi hundred billion dollar market is the notion of demand orchestrating its own fulfillment. When people can express demand simply, and it can be fulfilled in near real time with minimal fuss and friction, it has the potential to fundamentally alter user behavior, and transition customer spend.In the long term, personal transportation is more likely to move to a programmatic model where multiple bids are received towards fulfilling a specific request. But I am guessing it is at least 5-10 years away, for it needs new consumer-focused players with sufficient gravitas to force the ecosystem to fall in line.