Hailo Business and Revenue Model

Hailo has a very strong value proposition and that has been one of the key factors for its growth. While other UK taxi apps and businesses are mostly customer-centric, Hailo addresses the problems faced by drivers and in turn, caters to the whole ecosystem and not just one aspect of it. This has been Hailo’s edge that enabled it to thrive in this competing market.

History of Hailo Taxi App

Founded in London in 2011, Hailo is a UK taxi app that matches drivers and passengers. It was founded by six individuals: three business entrepreneurs and three cab drivers. This unique combination helped them understand the local taxi market and factor in issues faced by both taxi drivers and passengers, when creating their platform and business structure.

When Hailo was first launched it was the 6th or the 7th taxi app in the UK. Hence, the competition was already established. Yet, it’s core focus on the driver’s community and building a community of cab drivers is what helped Hailo get an edge over its competitors.

Overview

After first launching in London, Hailo launched in Dublin, Boston, Toronto, and Chicago by the end of 2012. By 2013, Hailo taxi service was available in 16 cities, had completed more than 3 million rides, and had over 30,000 registered taxi drivers. As of April 2014, Hailo had raised over $90million from investors. 

Hailo Growth — One of the best UK Taxi Apps

Since its inception in 2011, Hailo had established its presence in 16 cities including Dublin, Toronto, Chicago, and New York City in 2013. In 2012, it’s sales reached over $100m and more than half of the drivers in London had registered in Hailo, which accounts to over 23,000 drivers. Out of the registered drivers, over 25% of drivers were using the app on any given week, which is a phenomenal number considering that traditional taxi services were witnessing a decline in their turnover during the same time.

Investments:

2011: $3.0 million seed round funding in two tranches.

2012: $17m in Series A round funding led by Accel Partners which also included contributions from Atomico and Wellington Partners.

$30.6m Series B round funding led by Union Square Ventures.

A tech-driven business, Hailo had over 200 employees, out of which 80 were engineers. Their taxi service app not just focuses on comfort and accessibility for passengers but also helps drivers be a part of a community that encourages them to build additional channels of income.

The company has also recruited senior executives with proven experience to help establish their presence. In the United States, it has hired a former Starbucks Executive to leverage his expertise in scaling while maintaining topnotch customer experience. In Japan, it hired an executive credited with bringing software giant SAP to market leadership.

With Japan’s taxi services market alone estimated to be around $25 billion, Hailo aims to be Japan’s first end-to-end mobile taxi app. It has signed an exclusive partnership with KDDI, leveraging its 35 million subscribers to support launches in Asia, starting with Tokyo24.

Hailo Taxi App Business & Revenue Model

Hailo, through its taxi app, connects two sets of people: passengers who need an immediate ride and taxi drivers. Hence, its customer base is divided into two groups, passengers and drivers.

The first criteria for the business to be successful is to have both the customer groups download the app and use it.

An interesting strategy that Hailo uses when launching in a new city is to select three influential taxi drivers from an area and distribute it to the driver community through them. That makes the adoption process more customized.

But why would someone download Hailo when the taxi service app industry is saturated with experienced players like Uber, Taxi Pal, Lyft, Get Taxi, etc.?

This is where Hailo’s value proposition comes to play.

Hailo Value Proposition

Despite having its fair share of competition, Hailo’s approach to the problem that it was trying to solve helped it stand out from the crowd. Here are the key gaps in the market that Hailo addressed:

1. Technologically-driven engaging platform

Being a tech-driven business, Hailo uses technology to create a rich experience for both passengers and drivers. Both can communicate with each other directly through their app, and hence waiting time for both drivers & passengers is reduced and they can easily connect with the nearest passenger/taxi online. 

It uses GPS technology to easily match drivers and passengers. The booking is extremely easy to facilitate and passengers can specify the type of taxis that they are looking for. 

2. Driver focused app

Instead of just addressing the passenger side of things, Hailo addressed the issues faced by drivers as well. Their thorough research into the taxi markets of London helped them identify major problems drivers were facing, and they used that knowledge to build a system that not only resolved those problems but also empowered drivers. 

Two key problems that drivers in London faced were: isolation and low income. Driving is an isolated job and Hailo solved this problem by creating a community for drivers through a private location-based social network.

Hailo is one of those UK Taxi apps which has an efficient application whose system enables the drivers to easily find passengers and also get access to analytics. Drivers can use data to measure their uptime, downtime, earnings, peak passenger locations or hours, etc. 

Hailo Revenue Model — How does Hailo make money?

Hailo uses different revenue models depending on the area it’s serving. However, the most common revenue model is the low cost pay-as-you-go model. On this model, they charge a flat fee on each trip booked through the app. Commissions aren’t charged for tips received by drivers. 

The other way Halo makes money is by charging a cut from the driver, passenger, or both. The cut varies according to cities, time, etc. In London, it charges drivers 10% of the fare. In the US, it charges a fee to the passengers for booking a cab through their app which ranges from $0.99 to $3. 

Regardless of its revenue model, Hailo enables drivers to get a competitive edge over other taxi services and maximize their earning. Unlike traditional taxi services, they do not charge extra for rentals, credit card charges, weekly fees, etc. 

Build a UK Taxi App like Hailo

UK Taxi Apps like Hailo need to have an effective structure that makes booking cabs seamless. If you want to build a UK taxi app like Hailo, then you need to look for UK Taxi app developers who specialize in developing such apps. These apps need to have a complete system in place that works well not just while booking but also while payment, analysis, and maintaining data.

Contact us to know more about how to build a UK Taxi app like Hailo.