Politics 12 June 2013 Hailo - the taxi app that's killing minicabs New tech in a flagging industry. Sign up for our weekly email * Print HTML Hands up who’s fed up of struggling to find a black cab? You can put your hand down now — literally — thanks to Hailo, an app that uses smartphone technology to do the work for you. London black cab drivers have never quite managed to master supply and demand. The streets are packed with available cabs, amber lamp lit up, when you don’t need one, but when rush hour starts every single one seems to be perpetually occupied, leaving you — inevitably — in the cold, rain and gloom. A new app, however, promises to make the cab trade as efficient a market as any City trader, standing somewhere near Bank, vainly sticking out a hand at the traffic in the hope of a taxi, could desire. Hailo, invented by a group of six which included three taxi drivers, is already being used by two-thirds of the 16,000 full-time black-cab drivers in London and by almost 300,000 customers after only eighteen months, and it’s disrupting — positively — the industry for both. Once downloaded free of charge, Hailo lets you flag a black cab from wherever you are in London with two taps of your phone: one to open the app and another to hit the ‘Pick Up Here’ button. Thanks to GPS, which tracks the cab, you can see how long it’s going to be, and the driver’s details are confirmed for your security. You don’t even have to worry about directing the cabbie to a cash point on the way home: you can pay by credit card without extra charge. The driver pays 10 per cent of the fare to Hailo. London is not the only city to benefit: one in ten of Dublin’s residents use Hailo, while there has been success in Toronto, Chicago, Boston and Madrid. The route has not been clear everywhere, however. One doesn’t think of London’s grumbling, cynical black-cab drivers as being the first to adopt innovative technology, but they are signing up to Hailo in droves, a hundred registering per week. Neil Chadwick, a black-cab driver in London for the past eleven years, has been using Hailo since it launched there in 2011, and is a devoted convert: "I’m doing less hours, getting my money quicker and I’m getting home a little earlier. It gives you another set of eyes. It’s not like being on a radio circuit [which farms out the jobs centrally]: it’s the same as working off the street, but you’re getting jobs that you can’t see. Normally customers would have to go out on to the main road to hail a cab, but now they can do it from where they are, so I’m picking up fares more and more in obscure streets I’ve never heard of." It’s a strong endorsement of Hailo that it is enabling customers to flag down cabs in streets even a London cabbie deems obscure, but then this is a piece of disruptive technology — and it’s this element that has been crucial to its success. As a result of the market disruption being wrought by Hailo, minicabs or private hire firms who rely on people pre-booking taxis online and over the phone are seriously worried about their future. As Ron Zeghibe, one of Hailo’s non-taxi-driver founders and its chairman, says with satisfaction: ‘They aren’t just being phased out. It’s like a revolution: these guys are dead.’ Talk of a revolution might seem rather dramatic, but Steve McNamara, general secretary of London’s Licensed Taxi Drivers Association, uses exactly the same word: ‘The introduction of Hailo has revolutionised the taxi trade in London, and it’s educating a whole new generation of customers about the benefits of using a real taxi driven by a professional driver with the Knowledge, as opposed to the minicab service that many had grown up with.’ As well, then, as making the market more efficient, Hailo is also pushing out competition — a double disruption. The reason the seven similar apps that were in existence before Hailo failed to really take off, suggests Ron Zeghibe, is because they were not based on a proper understanding of London’s black-cab market. "Hailo is a 21st-century technology solution, and it’s disruptive. But it’s also about taking the solution and grafting it on to what is, in London, a 400-year-old industry. If you don’t understand the operational intricacies of the industry, you will fail." Zeghibe and two internet entrepreneurs joined forces with three London cabbies — Russell Hall, Gary Jackson and Terry Runham — to get an insight into the industry’s problems. Hall was a London cabbie for 30 years and says that driving around empty was a major concern in the trade: "One big problem was filling the dead mileage. I live in Kent, so driving back late at night, I’d stop at a set of traffic lights, a car pulls up beside me, it’s obviously a private-hire care, there’s a lady in the back, and she should really be in my vehicle. But she can’t get into my taxi, because she doesn’t know I’m available. Now she can hail me on her phone.’ Unlike the entrepreneurs behind the preceding apps, Hailo’s founders had this insider knowledge to rely on. ‘It was our impression,’ says Zeghibe, ‘that the iconic London black cabs had been under pressure for a number of years by the private-hire industry and the professionalisation of minicabs represented by the likes of Addison Lee. They really felt their trade was under threat. "So we thought, with the power that smartphones are putting in everyone’s pockets, you could offer software solutions through apps and algorithms. You already had the technology to come up with a much more cost-effective solution in matching up drivers with customers, and cutting out intermediary costs." Part of the function of disruptive innovations is that they change a market that users might not even realise is flawed. For example, pre-booking seems like a perfectly good way of getting a cab when you want it, but according to Zeghibe having to do so is a sign of the market’s imperfection: "You pre-book because the system is broken, not because it works really well, because you can’t rely on getting a cab exactly when you want it. But if it were a really good market, you’d be able to just flag down your cab exactly when you wanted it." Despite the benefits of using Hailo for customers and drivers, not all cities are as welcoming as London. In New York, where Hailo rolled out in May, livery and black-car firms are trying to sue the city for permitting customers to hail yellow cabs with smartphone apps. They argue that apps such as Hailo and its biggest US competitor, Uber, discriminate unfairly against poorer customers who are unable to afford smartphones, and would allow yellow cab drivers to refuse fares more easily. A similar scenario has played out with other disruptive technologies: while Airbnb, which allows users to hire spare rooms in people’s houses, has been a big success in Britain, it was ruled illegal in New York in May. These apps and sites still have to fight against deep and powerful vested interests in a country which prides itself on its free-enterprise culture. Zeghibe is dismissive of the black-car and limousine industry’s reactionary stance: "It’s complete and utter bullshit. What it really comes down to is that a number of players in New York don’t want competition. London is a much more liberal market — it allows innovation to happen.2 The Hailo lawsuit was thrown out in April by a State Supreme Court judge, and Hall attests to a huge level of interest in Hailo among yellow-cab drivers, so it seems that opponents will not have their way in New York. The path for expansion is clear for Hailo, and it plans to be in Tokyo, Osaka, Barcelona, Madrid, Washington DC and Cork by the end of the year. And, as Hall points out, cab drivers the world over are happy for the disruption the app has brought to their trade: "We had a golf day yesterday, and this guy I’d never met before came up to me and said, “Thanks for saving the cab trade.” To get that commendation was magnificent." This article first appeared on Spears magazine › Will Osborne listen to Boris and allow councils to borrow to build? Photograph: Getty Images Mark Nayler is a senior researcher at Spear's magazine. Subscribe from just £1 per issue More Related articles Jeremy Corbyn has found a vulnerable spot on Theresa May and trade Politicians are worried that their pensions are destroying the planet. Is yours? Nap Store: Where did all these new mattress start-ups come from?