iCabbi: a partner to global taxi industry
Gavan Walsh tells Sean Gallagher how getting lost on holidays in Portugal helped him come up with his cloud-based taxi dispatch business
While every business industry has experienced change in recent years, much of it as a result of advances in technology, one in particular has been affected more than most - the taxi industry. It is not very long ago when most of us will remember that getting a taxi involved standing on the street corner, often in the rain, in the hope of hailing a passing cab. Today, however, with the emergence of names such as Hailo and Uber, we, as users, can now access a taxi from anywhere using an app on our mobile phones. Drivers who are registered show up on our app along with their registration number, driver's name and ID and the length of time it will take to arrive at our precise location. While revolutionary for users of taxis and for individual taxi owners, such advances in technology have forced traditional large taxi companies into a challenging position - how do they now compete?
One Irish company which is helping them do just that is Dublin-based iCabbi. Set up in 2010, by founders Gavan Walsh, Niall O'Callaghan and Bob Nixon, the company already employs 47 staff and has an annual turnover of over €2.6m. Last week, I met up with iCabbi's CEO, Gavan, in the company's offices in Howth to find out what this innovative company is up to.
"We specialise in developing fleet management and booking software primarily for the taxi and private hire industry," says Gavan.
To explain where the company is positioned, he goes on to detail how there are basically two sides to the taxi industry. On one side, there are the likes of Hailo and Uber, who connect consumers directly with individual taxi drivers. On the other side are the traditional taxi companies whose office-based staff process most of their business over the phone and then dispatch these requests over a radio system to the drivers who work for them. It is in this traditional taxi company market that iCabbi now operates.
"It was about 15 years ago when the taxi industry experienced its first real taste of technology with the introduction of new data display systems, which helped taxi firms automate certain elements of the process of booking and dispatching a taxi," explains Gavan.
"However, the problem was that these systems were heavily dependent on expensive hardware that became obsolete almost as soon as it was installed. Today, however, our iCabbi system offers taxi firms access to the most advanced cloud-based dispatch system in the world and by using our SAAS (Software As A Service) model, companies no longer require expensive hardware or even software installations and can access everything they need via a simple browser. This really is the future," he says.
iCabbi currently has around 70pc of the Irish market of taxi companies but the vast majority of its revenue, however, now comes from export sales, particularly from larger taxi firms in the UK and USA, where its typical customers are firms with between 200 and 2,000 taxis.
As we stroll around the company's office, Gavan asks one of his team to call up on screen a display of its customers in one of the UK's largest cities - Leeds. Here, hundreds of red, green and yellow icons, each representing a taxi, can be seen making their way around the city, the different colours tracking who is free, occupied or en route to pick up customers - and all in real time.
"Our customer base is growing rapidly at present," explains an upbeat Gavan.
"Our international development team are in negotiations with several potential new customers across Europe as well as in Canada and Australia," he adds.
Gavan Walsh is no stranger to the transport business, having started his career as a driving instructor in his family's business - The Irish School of Motoring. He is originally from Sutton, in Dublin, and his interest in business started much earlier, in his teens, when he got involved in entrepreneurial ventures that ranged from selling Christmas trees to running social events in nightclubs around the city. After school, he joined the family's business and over time became head of the company's technical development. It was in 2009, while on holidays in Portugal with his girlfriend, that he first came up with the idea for iCabbi.
"This was before the days of Hailo," explains Gavan. "We left our hotel to go for a long walk but soon found ourselves lost in a remote area and unable to find our way back. It got me thinking that there had to be a way to use technology and your smart phone to identify where the nearest taxis were and to be able to book one of them directly without having to speak to anyone," he adds.
Once home from holidays and still excited about the concept, he immediately began assembling a team that could turn the idea into a reality. Shortly afterwards, along with his co-founders, he set up iCabbi.
Niall O'Callaghan, who comes from Howth, is a software development expert and the technical innovator behind iCabbi. After school, he studied engineering in Trinity College Dublin, but soon discovered he didn't enjoy it. Excited instead about computers and software, he bought a book on HTML and began to teach himself computer programming. Not long afterwards, he landed himself a job with one of the main banks and over the next five years progressed to become one of their most senior developers. The next period of his life was even more adventurous and saw him use his analytic and statistical skills to become a successful professional poker player before he was eventually drawn back to his love of software development.
The company's third founder, Bob Nixon, brought a different skill set to the mix. With a degree in business and a post graduate diploma in corporate treasury, he had worked as business development director with the Georgina Campbell Guides business, winning numerous web technology awards for his work there.
The company initially adopted a Hailo/Uber type model, whereby it focused on connecting customers directly with drivers but soon realised that the real gap in the market was not in the individual taxi driver market but in the traditional large taxi firm space. Such firms were seeing many of their drivers leaving to work on their own using the Hailo type apps instead of relying on their company's more traditional central dispatch systems.
"That's when we decided to move from being a provider of Business to Consumer (B2C) software to become a Business to Business (B2B) solutions provider by developing a cloud-based system that would help these larger taxi firms hold onto their drivers and help them compete against these individual app products," explains Gavan.
"However, convincing large taxi companies to switch to adapt new technology wasn't at all easy at first," Gavan adds.
Around that time, though, a well-known and respected Dublin taxi firm, VIP Taxis, suffered a water leak into its server room, which resulted in the business having to close for over six hours with a resultant loss of revenues to the company and its drivers. Recognising the risks of over reliance on hardware systems, VIP became iCabbi's first large customer to adopt its new cloud system. Soon news travelled and business began to flood in. The new entrepreneurs were now on their way.
In 2014, the firm entered the UK market, initially signing up Amber Cars in Leeds with over 900 taxis. Today, it supplies over half of all taxi companies in the UK who have over 500 taxis. It has over 22,000 taxis using its system every day between Ireland, the UK and the US, who between them take over one million bookings per week.
Funding for the venture came initially from the founders themselves and their families and friends, while in 2012 they received further investment of €650,000 from a combination of Dublin BIC, Bloom Equity and Enterprise Ireland - which helped them break into the UK market. Today, while now profitable, the company is again on a further funding round, this time for €3m, which it will use to expand its presence in the US market.
"We are also growing staff numbers," says Gavan. "Having built up a great team, whose creativity and drive have been instrumental in our success to date, we are now adding a further 20 jobs to be filled in 2016," he adds.
Gavan and his colleagues hope to see iCabbi become firmly established in North America and Canada over the next 12 months and with several foreign-language versions in the pipeline, their growth story seems set to continue. In turnover terms, the company has definite plans to triple its revenues to almost €8m during the same period.
What's Gavan's ultimate goal for iCabbi? I ask.
"That's straightforward," he says. "To create a global dispatch solution that emulates the Salesforce model and to take the company successfully to an IPO," he adds confidently.
For further information see www.icabbi.com
Gavan's advice for other businesses
1 It's harder than you might think
It is so much more difficult to start and grow a business than you might imagine. Having a good idea is important but even that is only a small part of getting the whole operation off the ground. Few entrepreneurs become millionaires overnight. You have to be prepared for a lot of hard work before you become successful.
2 You definitely need to be passionate Starting a new business consumes your life and the lives of those around you. To survive and to enjoy the process, you really have to love and have a real passion for what you are doing. Otherwise, you will never sustain the effort required to break through to success. Your passion will also be infectious and will help attract others who will share your vision.
3 You need good people and experienced mentors It is simply not possible to have all the skills you need to start and grow a business. You need to surround yourself with people who have. Experienced mentors who have already travelled this road can also really help speed up the journey by drawing on their experiences, which will also help militate against common costly mistakes.
Sunday Indo Business