Uber and Hailo do battle for Irish cab fares
The taxi industry comes second only to retail as the sector most disrupted by the internet. Now two online firms are wrestling for control of the Irish market - and it could get ugly, writes Sarah McCabe
Published 24/08/2014 | 02:30
A turf war has erupted on Dublin's streets.
But its not drug lords or feuding families at fault.
The battle is raging between two of the biggest players in an industry unknown to most of us until recently - online taxi companies.
US behemoth Uber, a business valued at $18bn just four years after its founding, has just launched in Ireland.
Uber's service centres around a smartphone and tablet app. Once downloaded, it pinpoints users' location via GPS. This allows them to book any cab nearby that's hooked up to the Uber system in seconds. Drivers benefit by picking up fares they would otherwise miss.
Passengers benefit from price reductions; Uber cars don't use a standard meter. Instead the fare is calculated using the company's own GPS-based mileage counter. Uber says fares work out around 10 to 30pc cheaper than traditional taxi journeys, depending on the distance travelled.
"We are opening up the market to people who previously couldn't afford taxis" said Uber UK and Ireland general manager Jo Bertram. "We even have a split fare option, making it really easy to share cabs".
Uber's launch in Ireland was a soft one, with relatively little fanfare. The company is only beginning its marketing offensive. To begin with it only offered its niche luxury service Uber Black, which targets wealthy and corporate travellers. This allows users to book town cars, with suited drivers, for standard taxi journeys. The downside is a higher fare and a minimum charge of €15, regardless of the journey travelled.
Uber is available in hundreds of cities around the world. Press the Uber button anywhere in London, Paris, New York or Sao Paolo, and a cab will be there in minutes.
But Uber is not Ireland's first online taxi player. Unusually, it is entering the Irish market facing an already powerful incumbent.
That challenger is Hailo. Hundreds of thousands of Irish people already have Hailo's yellow-themed app downloaded on their tablet or smartphone. Offering a flat 20pc off all fares, its offer is hard to resist.
The consumer-facing differences between Hailo and Uber are hard to distinguish. Both offer an app-based ordering services, both have thousands of cars on their books and both offer a reduced fare.
Their differences, instead, lie at corporate level. Despite raising around $80m from big-name investors such as Richard Branson, Hailo is still tiny in financial terms in comparison to Uber. Set up by a London cabbie, it is only available in a smattering of cities in Ireland, the UK, the US and Japan. Dublin was its second ever market. What this means for Ireland is that Uber has far more resources to throw at marketing and winning customers than Hailo does.
The battle so far has been relatively subdued; Uber is aiming for measured expansion. "The regulation of taxis in Dublin is light, meaning there are a lot of old and uncomfortable cars on the streets" said Bertram.
"We are being selective about our cars and drivers - we want users to know they will have a good experience in Uber cars. We also have a feedback option built into the app, meaning people can let us know straight away if they are unhappy with their driver, and we can take action."
But if other cities are anything to go by, competition could turn vicious. It has certainly turned ugly in the US. There, a third player called Lyft has accused Uber staff of making thousands of Lyft ride requests only to cancel them at the last minute, leaving drivers out of pocket. Uber responded in kind, alleging that people associated with Lyft had skipped out on nearly 13,000 Uber rides in the same way. Each company denies the other's allegations.
Both have also entered the lobbying game. Last week Uber hired David Plouffe, a former top political adviser to US President Barack Obama, to help it cope with regulatory hurdles and opposition from cabbies around the globe.
Uber's plans extend beyond taxi services. Instant ordering via its app is being expanded to a whole variety of services, said Bertram, everything from bicycling couriers (Uber Rush) to vans (Uber XL). It has even begun delivering medicine, diapers and toothpaste in Washington.
But for now it's Irish ambitions don't extend beyond Dublin. While Hailo is available in Cork, Limerick and Galway, Bertram says Uber has no concrete plans for other Irish cities.
"We are focused on building up our base of cars and getting the average arrival time down. It's currently around eight minutes, we'd like to see that fall to four".
Sunday Indo Business