Hailo - the taxi app that's killing minicabs

New tech in a flagging industry.

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

Photograph: Getty Images

Mark Nayler is a senior researcher at Spear's magazine.

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Arsène Wenger: how can an intelligent manager preside over such a hollowed-out team?

The Arsenal manager faces a frustrating legacy.

Sport is obviously not all about winning, but it is about justified hope. That ­distinction has provided, until recently, a serious defence of Arsène Wenger’s Act II – the losing part. Arsenal haven’t won anything big for 13 years. But they have been close enough (and this is a personal view) to sustain the experience of investing emotionally in the story. Hope turning to disappointment is fine. It’s when the hope goes, that’s the problem.

Defeat takes many forms. In both 2010 and 2011, Arsenal lost over two legs to Barcelona in the Champions League. Yet these were rich and rewarding sporting experiences. In the two London fixtures of those ties, Arsenal drew 2-2 and won 2-1 against the most dazzling team in the world. Those nights reinvigorated my pride in sport. The Emirates Stadium had the best show in town. Defeat, when it arrived in Barcelona, was softened by gratitude. We’d been entertained, more than entertained.

Arsenal’s 5-1 surrender to Bayern Munich on 15 February was very different. In this capitulation by instalments, the fascination was macabre rather than dramatic. Having long given up on discerning signs of life, we began the post-mortem mid-match. As we pored over the entrails, the curiosity lay in the extent of the malady that had brought down the body. The same question, over and over: how could such an intelligent, deep-thinking manager preside over a hollowed-out team? How could failings so obvious to outsiders, the absence of steel and resilience, evade the judgement of the boss?

There is a saying in rugby union that forwards (the hard men) determine who wins, and the backs (the glamour boys) decide by how much. Here is a footballing equivalent: midfielders define matches, attacking players adorn them and defenders get the blame. Yet Arsenal’s players as good as vacated the midfield. It is hard to judge how well Bayern’s playmakers performed because they were operating in a vacuum; it looked like a morale-boosting training-ground drill, free from the annoying presence of opponents.

I have always been suspicious of the ­default English critique which posits that mentally fragile teams can be turned around by licensed on-field violence – a good kicking, basically. Sporting “character” takes many forms; physical assertiveness is only one dimension.

Still, it remains baffling, Wenger’s blind spot. He indulges artistry, especially the mercurial Mesut Özil, beyond the point where it serves the player. Yet he won’t protect the magicians by surrounding them with effective but down-to-earth talents. It has become a diet of collapsing soufflés.

What held back Wenger from buying the linchpin midfielder he has lacked for many years? Money is only part of the explanation. All added up, Arsenal do spend: their collective wage bill is the fourth-highest in the League. But Wenger has always been reluctant to lavish cash on a single star player, let alone a steely one. Rather two nice players than one great one.

The power of habit has become debilitating. Like a wealthy but conservative shopper who keeps going back to the same clothes shop, Wenger habituates the same strata of the transfer market. When he can’t get what he needs, he’s happy to come back home with something he’s already got, ­usually an elegant midfielder, tidy passer, gets bounced in big games, prone to going missing. Another button-down blue shirt for a drawer that is well stuffed.

It is almost universally accepted that, as a business, Arsenal are England’s leading club. Where their rivals rely on bailouts from oligarchs or highly leveraged debt, Arsenal took tough choices early and now appear financially secure – helped by their manager’s ability to engineer qualification for the Champions League every season while avoiding excessive transfer costs. Does that count for anything?

After the financial crisis, I had a revealing conversation with the owner of a private bank that had sailed through the turmoil. Being cautious and Swiss, he explained, he had always kept more capital reserves than the norm. As a result, the bank had made less money in boom years. “If I’d been a normal chief executive, I’d have been fired by the board,” he said. Instead, when the economic winds turned, he was much better placed than more bullish rivals. As a competitive strategy, his winning hand was only laid bare by the arrival of harder times.

In football, however, the crash never came. We all wrote that football’s insane spending couldn’t go on but the pace has only quickened. Even the Premier League’s bosses confessed to being surprised by the last extravagant round of television deals – the cash that eventually flows into the hands of managers and then the pockets of players and their agents.

By refusing to splash out on the players he needed, whatever the cost, Wenger was hedged for a downturn that never arrived.

What an irony it would be if football’s bust comes after he has departed. Imagine the scenario. The oligarchs move on, finding fresh ways of achieving fame, respectability and the protection achieved by entering the English establishment. The clubs loaded with debt are forced to cut their spending. Arsenal, benefiting from their solid business model, sail into an outright lead, mopping up star talent and trophies all round.

It’s often said that Wenger – early to invest in data analytics and worldwide scouts; a pioneer of player fitness and lifestyle – was overtaken by imitators. There is a second dimension to the question of time and circumstance. He helped to create and build Arsenal’s off-field robustness, even though football’s crazy economics haven’t yet proved its underlying value.

If the wind turns, Arsène Wenger may face a frustrating legacy: yesterday’s man and yet twice ahead of his time. 

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit