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Is Hailo losing it’s Halo?

Hailo the mobile app which lets you e-hail taxis has been a phenomenal success story and already boasts over 440,000 registered users in London and gained an abundance of PR and media coverage. They are also part of the Government’s Tech City UK Future Fifty, the year-long programme supporting high-growth businesses.

The appearance of Richard Branson sitting in the driver’s seat of yellow branded iconic black cab in the media certainly helped awareness as does being seen as one of London’s home-grown tech start-up success stories. On top of these media-related success stories Hailo benefits from being a tech company with massive investment (in total $125.1 million to date) and being headquartered in London’s silicon roundabout with access to amazing talent.

However, the burning question is whether Hailo can sustain their user growth in the UK or whether they will now require more serious mobile & digital marketing beyond PR and yellow Hailo branded cabs to help them to grow and in turn reach the next level.

The recent backlash of users over the increase of minimum fares (£10-£15 depending on the time) has certainly been an issue for many Londoners and with so many competing apps it should be apparent that any hint of complacency could be an issue when users look for alternatives. I do however understand the reasoning for the change in minimum fare policy. On the other side cab drivers using the app are charged a 10% fee for all fares. It’s obvious what they would rather do, wait a few more minutes for a street hail and take the full fare than take a Hailo job and receive 10% less for a short £5.00 journey.

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Ultimately passengers travelling a shorter distance around the city do lose out, but at least they will have more chance of grabbing a Hailo cab during peak times. You just have to calculate in your head if its cost effective with those min fares. (I hear one lady sat in the cab until the minimum fare was reached even though she got to her destination, to get her moneys worth!!)

Hailo has a critical mass of 14,000 cabbies already signed up, and so has opportunities to build dedicated cabbie community features such as a Hailo radio service, group buying and they already offer insightful data around their trips and fares.

Jay Bregman, the CEO and five other founders, three of whom are cabbies are a very smart and resilient bunch of folks and they have hired some amazing talent, especially in the technology, design & branding front. I’m yet to see any major marketing innovation, however, beyond the early tactic used by many of the other major taxi app players too, which has been to give out £5, £10 or even £20 vouchers to get referrals and fuel the viral engine.

Also the danger of recent PR stunts is that they are short lived and if done well the increase in app usage you get from people being reminded to either use or download the app, can cause massive demand within a short time. This spike can have the knock-on result of an overall dip in service levels, yielding a negative first time experience for many.

Below is a snapshot of the Hailo app in Apple UK store chart rankings over the last 90 days and it shows how they are struggling to get into the top 10. Download stats should be taken with a pinch of salt, as there’s no way for a user to try an app without downloading it. So an app’s download stats remain the same whether an app is used once and deleted (which is very common) or used multiple times.

It would seem TV commercials might not be an option for Hailo due to wasted eyeballs until they have achieved national cab coverage by expanding to new cities and here also remains a challenge on how to to market the service beyond the borders of the M25 and reach into other towns and cities while maintaining high service levels and providing effective coverage. London is always a different ball game (I know too well from my JustEat marketing day’s)

A more local offline approach focusing on large business accounts that use taxis and minicab services, like in-direct competitors Addison Lee may be a wise move. However the main reason why a company chooses Addison Lee, or a local firm, over using black cabs, are usually price and service driven. With a local minicab firm they benefit from the option of a choice of cars and sometimes up-to 70% cheaper prices than black cabs for common journeys such as airport trips. Despite Addison Lee’s excellent service levels and large fleet of 3,500 cars the negative PR they have picked up is making logistics and transport managers re-assess who they now use. Still they hold a strong grip on many business accounts. So, the recent announcement of the product extension of “Hailo Business” will certainly mean Addison Lee has a new fight on their hands.

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Let us also not forget other major industry players such as GetTaxi, Uber and minicab app’s Minicabster, Kabbee and of course, the usual quick phone call to a local minicab firm. But Hailo’s main direct competitor in London, according to the head of marketng  is actually the “street hail” but I also think Uber is now biting at their heels. (Currently no.4 in UK App Travel charts)

Maybe Hailo is already focusing on a key growth metrics such as getting people to add their credit card to the app as soon as they download it. This user behaviour will yield many more journeys. Hailo’s brilliant name (created by a marketing agency, anyone know who they are?) and technology is amazing. I’m yet to see any major digital marketing campaigns and look forward to seeing how this channel unfolds. Indeed they might just be focusing on global expansion to other countries or even considering using the technology they’ve built for other sectors than try and squeeze more Londoners onto the app with all the noise in this space right now.

So anyhow here are my 7 points from an outsiders view (in no particular order) on driving growth for Hailo:

1. Get more users to add and store payment details on the app (ideally when its downloaded first time!)
2. Expand to other urbanised cities and promote heavily locally
3. Launch Hailo business targeting business accounts, picking up some Addison Lee contracts
4. Innovate the viral growth engine beyond just money off vouchers
5. Produce some awesome digital & mobile marketing campaigns to drive more downloads
6. Partnerships – Lots of opportunities here
7. Unify and define a global brand with core Hailo-ness, which allows local markets to execute localised campaigns under one core brand umbrella

In the meantime there will always be a late party, urgent meetings across town, tube closures, delayed trains and rain so there’s always going to be a need to get from ‘A to B’ quickly and comfortably and there will always be room for innovative app’s that make it easier. Overall, the sector is worth £3 billion a year and the ones with the biggest budgets, best viral growth engine, repeat user usage and talent will be the ones who succeed.

Hailo is well on its way to doing that in London in the black cab sector; I’m just glad it’s not the minicab sector. (That’s where my successful start-up is focused!)

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