Taxi app competition about to step up a gear in Ireland

As Hailo and Uber battle for customers, the one clear winner could be the consumer

A user scans for an available vehicle using the Uber Technologies app on an Apple iPhone 5. Photograph: Chris Ratcliffe/Bloomberg

A user scans for an available vehicle using the Uber Technologies app on an Apple iPhone 5. Photograph: Chris Ratcliffe/Bloomberg

 

Remember the days when hailing a taxi meant standing on the side of the road at 3am, trying to find the one empty cab on a Saturday night that might not be out of service after a long night.

Things have changed in the Irish taxi market. Two years ago, Hailo launched in Dublin, bringing the ability to hail a taxi using your smartphone to the masses.

Since then, it has had a relatively privileged place in the market and you can’t go more than a few hundred metres in Dublin without seeing the logo somewhere.

Operators like NRC have their own apps, but Hailo is still the most recognisable.

It is a different story elsewhere. In China, for example, there is a revolution going on in the taxi industry. Apps are battling it out for the lion’s share of the market there, with Didi Dache and Kuaidi Dache offering both drivers and passengers subsidies for using the rival services.

Although Hailo has launched in a few Asian cities, including Osaka in Japan, it has yet to crack the Chinese market.

Could similar competition occur in Ireland? Possibly.

Market foothold

Newcomer Uber, which began operating here in February, is keen to get a foothold in the market.

 

Last week it launched its new UberX service, which uses regular taxis but its own fare scheme. The upside is that it can mean cheaper fares for customers, depending on the journey time.

To promote the service, Uber was offering free journeys on the UberX service from 6pm on Friday and continuing for the weekend, giving people the chance to try the new offering for themselves.

The vehicles are all commercially licensed, according to Uber, so no concerns there.

Uber drivers don’t accept cash, unlike a regular taxi or Hailo cab. It is credit card or Paypal only, charged through the app.

Executive cars

Hailo isn’t sitting back though; the company announced last week that it would be rolling out a few new services next month that would take in everything from executive cars to a slightly more upscale taxi service, known as Hailo Plus.

 

Chief executive Tom Barr is betting that some passengers would be willing to pay a few euros extra for a better service.

“We’ll be looking for the line between the executive service and the regular taxi ride today to find that middle ground,” the former Starbucks executive says. “People are looking for a service that they can be guaranteed a different experience that they might pay a little bit extra, to know they’ll be guaranteed a really nice car, an even more trained driver.”

It is a gamble when UberX is threatening to undercut the current pricing structure on which Hailo relies.

Barr says the new services are not a response to Uber’s entry into the Irish market, although many would assume otherwise. Although the Hailo chief executive says he welcomes competition, you would be forgiven for putting two and two together and drawing the conclusion that Hailo’s move is a reaction to Uber’s expansion.

“We always have an eye to our competition,” he says. “We don’t take our position in the Irish market for granted.”

Ireland is punching well above its weight in terms of its importance to Hailo’s market. Although our country may not have the population of some of the smaller cities where Hailo has been rolled out, on a percentage basis, the customer base here is far in excess of what the cab company expected. About 9,000 taxi drivers in Ireland are signed up, with about 7,000 in Dublin.

“This month we’re hitting half a million smartphone users in Ireland, which is staggering,” according to general manager of Hailo Ireland Tim Arnold. “Active users is about two-thirds of that.”

It is a figure that Barr says the company is proud of. That is partly why the company decided to roll out Hailo Plus here first, he says.

Testbed

Ireland is going to be the testbed for the new service before it goes elsewhere.

 

It is not the first time either; Ireland was also the first market where Hailo went nationwide, launching in towns around the country in addition to the major cities.

The plan for Hailo Plus is to take some of the higher-end cars available in Hailo’s regular taxi fleet – for example, Mercedes, Audi, BMW vehicles – and putting drivers through additional training to meet the standards of what the new service will demand. Exactly what that training will entail has yet to be unveiled.

That is in addition to Hailo for Business, which will open up the e-hailing service to business accounts. allowing users to charge a cab journey to a business account while providing the receipts to office administrators.

However, there is still one glaring omission – and it could be a deal- breaker for business customers. While Hailo is great for grabbing a taxi at that very minute, what it does not do is allow you to pre-order a taxi.

That could be for an hour from now, or a day. While it doesn’t seem like much of a hardship – most taxis will arrive promptly and you can always see how far away your driver is – if you are travelling from a suburban or more remote area, the ability to book a taxi in advance is crucial.

The ability to pre-book taxis is something that Hailo is working on, Tom Barr says, although regulations mean it won’t be available to every market.

On top of that, there is the new executive cars that Hailo has been adding to the fleet in previous weeks. The plan is to make that more widely available in the Irish market over the coming weeks.

Hailo’s expansion plans haven’t all gone smoothly elsewhere though. London taxi drivers, upset when Hailo added executive cars there staged a protest outside Hailo’s offices in the city.

However, Barr says the unrest over the move was “overblown”, putting it down to a misunderstanding about what the company was trying to do.

 

Executive cars

“There were rumours out there that we were going into minicabs when actually we were just going into private executive cars to meet business customers’ needs,” he says.

 

“When we explained to drivers, which we have over the past number of weeks, we had really good feedback from them. They recognised that getting business accounts means they’ll get more business, but to get that, we need to offer private executive cars. We’ve turned a corner on getting our side of the story out.

“Our general philosophy is to be on the side of the taxi drivers.”

As both companies gear up to battle for the city’s taxi customers, the one clear winner could very well be the consumer.

 

Test drive: The UberX experience

Before the rush kicked in on Friday, we decided to test drive the UberX experience and compare it to Hailo.

Booking the car through the app wasn’t a problem, although there seemed to be few UberX cars operating around Dublin’s city centre before the free journey promo starting.

One car accepted the job and though said it would us pick up within 13 minutes.

Then it went a bit wrong. The wait time lengthened by a few minutes. Then another few. Then the driver cancelled the job and, with no other UberX cars in the area, that left us with no option but to come up with an alternative. Just not UberX.

That seems to be a problem with UberX though; checking back in over the following few days, there were few, if any, UberX cars available, even in the city centre.

The UberBlack experience was a bit more successful. Within a few minutes of booking, the car arrived, complete with a pleasant driver who even got out to open the door.

It is all part of the UberBlack service – higher-end cars, premium service – essentially, you get what you pay for.

Beware of rush hour though.

TIME AND DISTANCE CHARGE

Uber – both Uber X and Uber black – charge by the kilometre and per minute, so getting stuck in traffic will significantly increase the fare – and you won’t know until you get out of the car and the charge hits your Paypal account what you have paid to get home.

Uber’s fare calculator put the journey at about €17 for the UberX car (which never arrived), a few euros cheaper than the regular taxi fare you would pay through Hailo.

It does warn you that it may be more expensive, based on traffic.

In total, the UberBlack car cost around €50 for the journey, thanks to a run-in with city traffic.

 

Taxi apps: What would it be worth paying extra for?

With Hailo about to launch its new Hailo Plus service in Dublin, we started thinking about what would be worth paying extra for. The shortlist:

DON’T MENTION THE WAR Or in this case, the economy. While a friendly face is appreciated, there are a few subjects that are guaranteed to put everyone in a bad mood.

Discussing the economy is one of them. The last thing you want is to get out of a taxi more pessimistic than when you got in. Ditto for discussing the Government’s record, property values and how everyone is emigrating apart from you.

PERSONAL GRUDGES Remember a while back when the taxi industry was regulated and there was no love lost between taxi drivers and hackneys?

One particular terrifying journey involved a taxi driver detailing exactly how he would deal with the aforementioned hackney drivers (it wasn’t friendly) and people who double-parked (give gardaí the power to set the cars on fire).

Now, it’s often the gardaí that come in for vitriol.

AVOID PERSONAL QUESTIONS Some people find it a bit awkward when they get into the back of a taxi and the driver is virtually silent once they find out your destination.

Others relish the quiet. Most of us can hold some form of polite conversation somewhere in between.

But “polite conversation” does not have to include intrusive questions about your family, current relationship and personal life choices.

Up to and including one particular gem: “Was your pregnancy planned?” Awkward silence is actually preferable.

BAN EASY LISTENING MUSIC There’s a certain radio station that shall remain nameless that seems to be a staple of about 90 per cent of taxi drivers in Dublin city.

Usually late at night, always mellow music, enough to put you to sleep. Kill the radio and we’d hand over the extra cash.

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