Hailo Launches App-Based Cab Service In Toronto As A Fully-Licensed Taxi Company

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Hailo is making the trip overseas from the U.K. with its first North American launch today, as it officially debuts its service in Toronto. From launch, Hailo faces stiff competition – Uber is offering free taxi service all this week, in a move blatantly designed to take some of the wind out of Hailo’s sails. But I spoke with Hailo Toronto President Justin Raymond at their local headquarters, and he made it clear that his service is ready to compete, in terms of both the customer-facing and driver-side experiences.

What Hailo now provides in Toronto is essentially the same service it offers in London and Dublin: A way to hail taxis via an app for iPhone or Android devices, complete with a map showing you where the nearest drivers are and their progress as they approach; estimated time of arrival; notifications that tell you when the cab has arrived; and payment via credit card on file that happens automatically, so that a user never has to take out their wallet, and a cab driver never has to worry about ditched fares or other problems like credit cards getting declined.

Drivers can sign up from any existing cab company, because in Toronto, cab drivers are independent contractors, which Raymond explained means that they always have the choice to either turn their dispatch radios on, or seek fares just by cruising the curb. Hailo is just another way taxi drivers can try to fill their unused inventory, i.e., the back seat, when other options aren’t necessarily providing fares. And the big benefit for drivers is that Hailo is actually a licensed cab company in Toronto, which means that drivers don’t have to worry facing fines or issues of legality in accepting Hailo fares. That’s in stark contrast to Uber, which has faced questions about whether or not it requires a license, in other cities as well as Toronto. For its part, Uber claims that it is simply a technology company, and as such doesn’t require a license to operate, noting that all of its partner drivers are completely licensed and insured.

Hailo’s revenue model and fee structure is slightly different from Uber’s, too. The company takes a 15% commission from drivers on any fares it provides, but that’s an all-in fee that covers credit card processing, and guarantees payment – so if a credit card is declined, Hailo takes the hit, not the driver. Drivers keep the tip, which can users set either as pre-set amounts of 15-, 20-, and 25 percent, or their own custom value. With Uber, a 20 percent charge is added to the metered fare, of which Uber takes an undisclosed, “small” percentage, and the rest goes to the driver.

I spoke with a few cab drivers about the services, and people seemed inclined to try their luck with the variable tip rate. Cabbies like that they can still count on the occasional big tip, even in place of consistency. The one major issue facing widespread adoption appears to be that drivers need a smartphone to get up and running with Hailo, which Raymond admits is something around 70% to 80% of cab drivers in the city still don’t have. Hailo doesn’t provide smartphones, since Raymond says that isn’t a sustainable business decision, but they do work with cab drivers to get deals through local carriers on devices. Even despite that barrier, Raymond says there are about 450 or so drivers already on board, with nearly 1,600 more at some stage in the pipeline of the onboarding process.

Recently, Toronto’s own Beck Taxi cab company launched a smartphone app for hailing cabs, but it’s still routing things through the old dispatch system, so it doesn’t change anything on the driver side. Hailo is bringing a completely new experience, along with detailed, real-time reporting for drivers, crowdsourced information about where cabs are needed and where they aren’t, and a much-needed update to how fares are assigned. On the consumer side, the experiences of these kinds of apps are all relatively similar, and I think winning over drivers will go a long way toward tipping the balance one way or the other, and Hailo’s done a very good job of making sure its driver partners get an experience with Hailo they won’t find elsewhere.