Taxibeat, the hail-a-cab smartphone app and taxi driver marketplace, has raised an additional $2 million, adding to the approximately $1.4 million raised previously. Once again, the backing comes from unnamed high-net worth individuals, while the new capital will be used, in part, to further fuel the Greek startup’s continued expansion into Latin America, a market that is seeing it go up against Rocket Internet’s much better funded Easy Taxi.
Specifically, Taxibeat is launching its taxi driver marketplace in Mexico City, pegged for mid-July, adding to its existing LatAm presence in the form of Rio de Janeiro and São Paulo in Brazil. It also operates in four European cities: Athens (Greece), Oslo (Norway), Bucharest (Romania), and Paris (France).
In contrast to Taxibeat’s approximately $3.4m in funding, Rocket’s Easy Taxi, which was founded out of Rio de Janeiro in 2011 and operates in the same LatAm cities as Taxibeat (along with other cities in Brazil and further afield), is thought to have raised over $20m in total. Most recently it closed a $15 million Series B from Latin America Internet Holding (LIH), Rocket Internet’s holding company in the region, and part-owned by Millicom.
Taxibeat’s smartphone app, available on iOS and Android, enables users to locate nearby taxis, hail the driver of their choice and rate them once the ride is over. Rather than running its own fleet, it targets independent taxi drivers and those associated with taxi firms, charging a small commission on the business it brings, with no extra charge passed on to passengers.
Meanwhile, passengers using the free app get a much greater choice of taxi ride, right down to the individual driver, guided by user ratings and other information displayed, such as current distance and what amenities are available in the taxi. By making taxi travel a true marketplace, down to individual driver, Taxibeat claims to be having an effect on the quality of service that taxi drivers offer.
As for why the startup appears to be bedding down in Latin America, deviating from its European roots, Taxibeat says that market size is a major factor, noting that mega-cities like Mexico City and Sao Paulo can’t be compared to anything it could do in Europe.
Additionally, in Latin America, public transportation infrastructure is poor, meaning that non-affluent people rely on taxis in a way they don’t in many European countries where the subway and buses are a preferred and cheaper option.
Finally, Taxibeat says that the taxi market in many LatAm countries is broken, with high crime rates and poor quality of service on the one hand, and a “handful of good drivers trying to distinguish themselves from the pack on the other”. A reputation mechanism enables the cream to rise to the top, thus raising standards overall.