Phone App to Drive more Passengers to Black Cabs

The founders of mobile music service Spotify, and online telephony business Skype have invested in a smartphone app, nicknamed as the Facebook for cabbies, which was created for London’s black cab community.

The new app is called Hailo, which helps black cab drivers of London’s iconic cabs, fight off competition from fleet hire vehicles and minicabs by sharing between themselves critical information, such as traffic trouble spots to avoid and places where passengers are waiting to be picked up.

Other smartphone apps have already been developed and released, for example by private hire vehicles provider, Addison Lee, for hailing taxis and minicabs.

Customers will also be able to hail down black cabs using Hailo on their smartphones. Hailo also has ambitions to be a more flexible alternative to radio cab services, which charge drivers a fixed fee to guide them to jobs. With Hailo, drivers are charged a proportion of each fare it brings their way, but is free to use for both passengers and drivers.

One of Hailo’s six founders, Jay Bregman, 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.”
According to Bregman, so far in since the four months Hailo has been available, about 2,000 drivers, roughly 10% of all London’s cabby community, have downloaded the app. The market leader in the radio cab market in London, Radio Taxis, has about 3,000 black cab subscribers.

£750,000 was raised to fund Hailo 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.

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

The funding will also support Hailo’s expansion plans and discussions have also been held in New York with the Taxi & Limousine Commission about launching in 2012.

With the economic downturn taxi drivers are struggling, as less people are using cabs as a method of transport, the cost of taxi insurance has increased, as well as fuel prices and general costs of running taxis. However, the launch of the app helps to steer more customers to use black cabs and encourage more business.

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