Hailo, a cab-hailing mobile app that counted itself among the DC taxi industry’s few digital allies, is pulling out of North America, saying it has become too difficult and expensive to compete. The company, which bases its local operations out of a mustard-yellow building on Florida Avenue, Northwest, does not name the competition that is driving it away, but the victors are obvious: Uber and Lyft.
Unlike those apps, which dispatch private drivers outside the traditional, heavily regulated taxi industry, Hailo connects professional cab drivers with customers who would rather hail with their phones than flail their arms on a street corner. The London-based company set up in DC in 2012, with its executives promising to take a softer, more collaborative approach with local taxi officials than the anti-regulatory strategies Uber and Lyft are famous for. Instead, Hailo says it will now focus on Europe and Asia.
“In the next phase of our growth, we have decided to put all of our energy and resources into these areas,” Hailo CEO Tom Barr says in a company statement. “We have therefore decided to end our operations in North America, where the astronomical marketing spend required to compete is making profitability for any one player almost impossible.”
Hailo charged users $1.50 for its electronic hailing service; after that, customers paid the regular, city-mandated taxi fares. That put Hailo at a disadvantage against Uber and Lyft, which promise rates as low as half the regulated fare schedule.
A Hailo representiative says the pullout is “fluid,” but does not say how many taxi drivers are affected. (Like its less-sanctioned bretheren, Hailo refuses to provide specific figures.) But the company’s impending departure is a big win for Uber and Lyft, and a big loss for the DC Taxicab Commission, which held up Hailo as one of the five—now four—digital apps approved by city bureaucrats for calling hired drivers.
Traditional taxi rides are dropping sharply to cut-rate services like Uber and Lyft, with some traditional cab companies saying their revenues have declined as much as 30 percent since the largely unregulated apps entered the market. The DC Council is about to give official clearance to the newer apps over protestations from cab drivers and DC taxi czar Ron Linton.
Perhaps Hailo’s exit is well-timed, though. Last week, Linton announced plans to roll out a city-issued taxi-hailing app.