How e-hail app Hailo is playing by the rules to take on Uber and Lyft

hailo logo

Hailo doesn’t yet have the name recognition that Uber and Lyft do, but the taxi-hailing app is poised to change how you get around your city.

Hailo rarely makes headlines, because the company never receives cease-and-desist orders and is never targeted by protesting cab drivers. Its strategy for expansion is simple: Choose the biggest, most tightly regulated transportation markets. Meet with officials. Find out what the rules are. Launch with full approval. That method has worked in 20 or so markets around the world, including New York City, Washington D.C., and London, where the app was founded by three black-cab drivers and three entrepreneurs. Less than three years later, Hailo now works with more than 65,000 drivers and has carried more than 10 million riders.

The app connects drivers with passengers, like its competitors do. But those other apps have met resistance when they try to launch without permission, like Lyft did this month in New York. Hailo will never take that approach, said Kevin Hatfield, co-president of Hailo North America. But New York is a large, constantly changing market, and he doesn’t begrudge Lyft or Uber for the way they do business.

“There’s a lot of people who have set up shop and continue to set up shop here,” Hatfield said. “I truly believe there’s room for everybody.”

I recently sat down with Hatfield to talk about e-hailing, ridesharing, and the future of Hailo. (Hint: it goes beyond the traditional yellow taxi.)

hailo hatfield

Kevin Hatfield at Hailo's New York offices.

TechHive: How is Hailo different from Uber and Lyft?

Kevin Hatfield: We only work with licensed, insured drivers and fleets of companies that are part of an approved space. We’ve always believed there are two customers: there’s the driver side and the consumer side. I think we have a really well-known reputation in the industry on the driver side and recognize that without the drivers really part of the process, it’s difficult to have a consumer service that works really well. That’s been tried and true throughout our beginning as well as present day.

The other key difference for us is our approach. We believe there’s a difference between disruptive disruption and constructive disruption. I would put us squarely in the constructive disruption camp. We come in and we help to modernize the city’s transportation. We help to evolve it, but we’re trying to do that in a way where we work with the regulatory bodies or the city itself. I think our approach has been quite different but the outcome has been a similar service. We’re two taps away on the phone to get a ride.

TH: Coming into a tightly regulated market like New York is not a smooth process. What was your approach?

hailo app

Hailo works like every other car-hailing app: Just enter your address and wait for a ride.

Hatfield: The word smooth is a tough one. [laughs] New York, given the size and complexity of it, took a very active approach toward managing an e-hail pilot. Even with that active approach, there’s always constituents and other parties and members of the existing infrastructure that are pulling in different directions. The idea of the pilot was to put it out there and start to gather data, start to answer questions…We’re now a year in, and it’s actually answered a lot of questions. The iconic New York taxi market, as well as all the other viable forms of transportation, including livery and black car, are still very much alive and well in the traditional forms that we know it. E-hail is becoming a more and more important part of that.

How do you incentivize drivers to stick with Hailo? Many drivers use your competitors’ apps.

Hatfield: We recognize that there’s multiple technologies out there, and I think the difference for us is that drivers typically feel the difference pretty quickly with Hailo. Here in New York we have a drivers’ center that’s open six days a week til 1 a.m. That’s opposed to having office space for drivers in an office tower that’s open for two hours a week when you need to see someone or have a problem. If a driver needs immediate assistance, if it’s an issue during a ride or a training issue, they can hit a button and get straight to somebody live, they can talk to them at a Hailo office—as opposed to some of our competitors, where you have to send an email through the app and wait to be potentially be responded to. It’s a very different process in terms of the care and feeding that we show the driver community.

Uber has been criticized over its surge-pricing policy. Will Hailo ever use surge-pricing?

Hatfield: Because we started with taxi, typically the taxi rate is what governs the ride. As we move into other car types, our rates have changed. As we launched Hailo Plus, which are basically sedans and town cars, we introduced that at a 15 percent premium on top of the taxi meter, which is still pretty minimal compared to others. Over the summer, we’ve actually matched taxi rates. We have messed with rates, but for the betterment of consumers as we launch those services. In terms of surge, we currently do not have surge pricing, and if we were to do that, we would introduce it in a way that would be a healthy balance between serving the customer and rewarding the driver for that.

One of the ways you’ve attracted new users is through the liberal use of promo codes and free rides. How long will you use that tactic?

Hatfield: People love their promo codes. We’re happy that they love them. Like any other industry and any other product, as you introduce it, there are dollars you give: whether those are rebates toward consumer packaged goods or a promo code for a service like ourselves. At the moment we have some pretty generous promo codes, but those are introducing our new Hailo+ service. As usage starts to balance, that’ll potentially taper off. We’re using it as an introductory promotional tactic.

hailo ad

If you live in a Hailo market, you'll see plenty of ads with promo codes in your Facebook News Feed.

Lyft is hoping New York legalizes and regulates its peer-to-peer ride-sharing model. Given your experience with regulators here, do you think that’s likely?

Hatfield: A couple of our competitors are in the ride-share space. There’s a really fine line between how they operate in New York and how they operate in other markets. If you really peel back the layers, you can see both the Taxi and Limousine Commission and the state of New York have ensured that they’re following the rules. What appears to be happening is that’s exactly what those competitors are working on right now. They’re figuring out a way to fit within the rule structure.

At least for the moment, we believe they will ultimately follow the exact same structure that ourselves and every other competitor has followed here. That said, we’re in support of evolving that rule structure, because we believe there are parts of it that need to evolve and change. The more of us that are involved in helping to evolve that, the better.

Uber has said that if the TLC approves ride-sharing, they’ll hop on board. What about you?

Hatfield: Our mantra has always been licensed, insured, approved drivers. As that model applies to more than just taxi or black car, we’d consider it. It’s essential that we consider all options on the table. The key is they would always be an officially approved, sanctioned service.

What’s next?

Hatfield: We’ll continue to look for opportunities to expand in North American cities. In some of our markets, we’re continuing to expand. We may not advertise it as much—like in D.C., we launched Arlington and Alexandria. We also launched Atlanta. There are a number of other North American cities that are in queue.

What about new features?

Hatfield: It depends on the market. Some markets will continue to see expanded options around how to get a ride. There’s currently two services in New York, and soon there will be three [Hailo Black, a black-car service]. In some markets, you still see a single choice, but soon, you’ll see a second or even a third. Given our roots, we’re filling out the East Coast at the moment, and we’ll continue to consider other markets.

This article was updated at 1:26 p.m. PT to correct the number of markets Hailo operates in.

This story, "How e-hail app Hailo is playing by the rules to take on Uber and Lyft" was originally published by TechHive.

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