Friday 19 July 2019

How Free Now seeks to regain its Hailo with a second rebrand

First it was Hailo, then Mytaxi. The new name for Ireland's biggest taxi firm is Free Now. Adrian Weckler speaks to its boss, Alan Fox, about the future of taxi technology and customer service issues

Driving forward: Alan Fox, general manager of Free Now. The taxi app has been rebranded from Mytaxi
Driving forward: Alan Fox, general manager of Free Now. The taxi app has been rebranded from Mytaxi
The taxi app has been rebranded from Mytaxi
Adrian Weckler

Adrian Weckler

This week, Mytaxi formally rebranded itself as Free Now. Although the choice of name has raised eyebrows, the company that started its life in 2012 as Hailo is now the largest taxi business operating in Ireland, with 12,000 drivers, 540,000 regular customers and 4.5 million passengers carried in the first three months of this year. It is also part of a wider taxi transportation group across Europe, ultimately owned by the German automotive giant Daimler.

It is starting to introduce new services, such as shared taxi trips between multiple passengers via its new Mytaxi Match app feature. In future, it hopes to add other Uber-style effects, such as 'surge pricing' for busy times of the week, and a fleet of electric scooters around Dublin.

But the company has also had a tough time with its customer service in the past two years, with technical problems arising from its switch from Hailo to Mytaxi, and controversial new features, such as the introduction of a €5 cancellation fee levied on passengers, but not on drivers.

It also says that its second major rebranding exercise in two years will cost around €3m.

Here, the company's general manager Alan Fox, a former AA Ireland marketing manager and telecoms executive with O2 Ireland and Meteor, talks to Adrian Weckler about the firm's challenges and opportunities.

Adrian Weckler (AW): Why change from Mytaxi to Free Now?

Alan Fox (AF): The majority shareholder [a joint venture between BMW and Daimler] took the decision to rebrand the entire organisation across 11 different markets. Free Now is only part of the new mobility group.

AW: Why the word 'free'?

AF: It represents freedom as opposed to 'no cost'. In terms of branding, the name obviously seems a little odd at the beginning. But really, that's the same with every new brand.

It's to illustrate our vision for the brand, which is a future where there are multiple mobility options available to passengers through one application.

AW: As successful as Hailo has been, things have become a bit messy now, surely? This is the company's second rebrand in two years.

AF: Well, I'm glad you pointed out that Hailo was a success. Mytaxi has been an even greater success. We've grown our passenger and driver numbers very significantly. It is true to say that when we transitioned from Hailo to Mytaxi a couple of years back that we did have some technical problems.

And that was because we were undertaking Europe's biggest-ever app migration with hundreds of thousands of passengers and tens of thousands of drivers from one platform to another. So it wasn't just a simple rebrand.

Thankfully, from that perspective, this time around, it will be different. This is very much just a rebrand. There's no technical migration. The rebrand itself is there to offer distinctiveness and consistency across hundreds of different cities and 11 different countries. So that when you land in Germany, Poland or Spain, you can use the app in the same way.

AW: How much will the rebrand cost?

AF: The investment is in the order of €3m. That includes media, creative development, operational rebranding, radio, outdoor and digital ads.

AW: Will there still be a cancellation fee of €5 for passengers with Free Now?

AF: Yes. I'd like to say a couple of things about that. We hope nobody will ever be charged a cancellation fee. The reason we're introducing it is to align ourselves with the market. All of our competitors pretty much charge the same thing.

But it's also to change behaviour for certain groups of customers. On a Saturday night, you might have a group of people coming out of a restaurant and they order four taxis in the hope of increasing their chances of getting one. That means we have four taxis going to that location.

And that's three other passengers who won't get a taxi because those taxis are all allocated. We're trying to change that sort of behaviour so that we can improve the efficiency of the fleet and improve our pick-up rate, particularly at peak times.

Any money we get from this will be reinvested in passenger discounts and vouchers. So we're not profiting from this. It's simply to improve the efficiency of our fleet.

AW: Why have things turned ugly at times in the public perception of Mytaxi? Hailo had a hugely positive brand. It's fair to say that Mytaxi has struggled, comparatively.

AF: We're never happy to get negative feedback. Every time, it hurts. You don't get used to it. However, what's happened separately is that consumer expectations have risen.

Bear in mind that before Hailo, people had to queue at a taxi rank, sometimes for hours. What apps like Hailo did at the time was a revolution.

So I think there's an element of looking back through rose-tinted glasses at that period of time, just simply because the expectation level was so much lower.

When I look at our delivery today, I can tell you that we have never had a shorter wait time for a taxi, even versus when we first launched back in 2013.

It's just over three minutes now, on average. And we've never had a cancellation rate lower than we have now on the driver side.

We've never carried more passengers. We have about 540,000 customers that regularly use the service. And we have about 12,000 drivers, up on last year.

So both our passenger and driver bases are increasing very significantly. When you look at the metrics overall, it's actually never been better.

AW: A second rebrand in two years must be expensive. What will the company's accounts show?

AF: The 2017 accounts that we've filed will show a loss, which reflects the investment that was made in the business that year, both on the technology transition we talked about and the rebranding [from Hailo to Mytaxi]. But that investment paid off. Our gross revenues grew 27pc and our gross margin grew by 30pc.

AW: Are you really going to launch a fleet of electric scooters in Dublin?

AF: Yes, subject to legislative change. It will be a very strong addition for short hops around the city. You go up to one on the street, scan a QR code and it activates the scooter. And then you pay per minute per kilometre. It's the same as the brand we operate under in Portugal, Greece, and in other locations around Europe.

AW: Does this mean we'll be stepping over scooters on city paths like they do in the US?

AF: Potentially, but we would have an operations team going around and moving them and making sure that they are properly located.

So while some people might leave them around, they'd be relocated.

AW: How many scooters might there be?

AF: I don't know. I think Lisbon, where we operate scooters, has about 700. In Athens, I think we have about 1,000.

AW: When do you think it might happen? Is there any sign of electric scooters being legalised here?

AF: I don't expect it to happen this year, but it could happen early next year.

There are a lot of hurdles to jump over. But it does appear that there's legislative movement into making them compliant.

I don't know when it will happen, but we're very keen to be one of the providers.

AW: What else are you looking at?

AF: We're carrying more business customers. We've won some significant business and government contracts, up 27pc on the previous year. Government contracts have given us a new route to growth. The HSE, for example.

AW: The chairman of the board of BMW, which has a stake in Free Now, said the future vision of the firm is an all-electric, self-driving fleet. When would this happen and where would that leave drivers?

AF: I can't see that happening for the foreseeable future in Dublin. As far as I can see, in Dublin, we're always going to need taxi drivers. Firstly, the technology is a long way off. Secondly, the regulations would need to change massively.

AW: Yes, but your own company says it's the goal.

AF: Yes, I'm not disagreeing with what he's saying in terms of the long-term future. But in any sort of meaningful timeframe here in Dublin, I just can't see it. There's a huge number of considerations, from insurance to pedestrian safety.

I think it's going to be something a little bit like nuclear fusion, which is always 10 to 15 years away. There are absolutely no plans to try autonomous vehicles here.

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