I love tech startups. Where else, except in cyberspace could you start a company, that’s free to both customers and suppliers, with no planned revenue stream? And be taken seriously enough to get backers? Add that it’s not even really launched yet, but you’ve generated so much advance buzz and publicity that you have not needed to pay one single public relations pixie. Just as well, because you have not yet decided how to make the money you’d need to pay them.
Welcome to www.taxiheroapp.com . But don’t rush off to download the app that rain or rush hour, locates a taxi for you, for free, and sends it racing to wherever you are. Well you can try, but they have not signed up enough of Hong Kong’s 18,000 taxis yet. But it’s happening, apparently.
Taxihero’s business development director Lars Maehler says they don’t really plan to be up and running much before Christmas. When it starts for real, you will download the app, select where you are going via google maps and GPS on your trusty smartphone and hey presto, your personal taxi hero will message you: “Congratulations, you’ve found your taxi!” He or she will then come and pluck you from the pavement.
Maehler and his colleague Kara Ng are infectiously enthusiastic and very confident. But hey do admit that usually it’s the other way around. “Usually the product is finished and then marketing starts,” he says. “But with us, it’s completely in reverse, we have the exposure, but the product isn’t there yet.”
It’s just sort of soft operational. First, they told their friends to use the Taxihero app, then they started a social media site, then they did the Apple and Google stuff. No traditional marketing at all. And that was enough. “The numbers of growth have been just astounding," he says.
All about taxis
Hitting up the more than 40 taxi owning associations and drivers takes time. The number of drivers exceeds 18,000 and they all, for some inexplicable reason, change shift at 4pm. When I call a taxi call centre apparently I have a 30 per cent chance of success, Ng tells me. When Taxihero has critical mass of signed up cabs, my chances will soar to 80 per cent with the trusty app.
Taxi licences - the new real estate
Taxis are big business now, with a taxi licence costing HK$7 million. Now that real estate is a no go, they have replaced property as a spec that rapidly appreciates in value. Most taxi drivers pay a variable day hire rate to rent their car from an owner. They take home from hK$14,000 to $16,000 per month.
So how do the bright young chaps at Takihero plan to make that old-fashioned thing called money, if everything is free? “We have formed a few strategic partnerships that are very exciting,” says Maehler. Good. And? Taxi associations get approached by would-be business partners all the time, he adds, so they are really picky. “Our priority now is to build up a user base. In terms of revenue streams, there are a few ideas in the making. But those are not our preliminary priorities.”
I’m getting deja vu. So they have done that Year 2000 dotcom thing of starting a company without any revenue? “Yep,” he replies. “But there are a lot of potential revenue streams, I mean we can go to any ad-based strategic partners who pay a privilege fee, we haven’t actually nailed down a specific one, we need to see how the market responds once we are in full swing. Then we can see."
"Obviously are not going to be working for free forever in terms of just provision of free apps," he adds. Thank goodness for that. But they will never charge a customer over and above the five bucks you pay for any booked taxi, which the cabbie gets.
No firm revenue ideas
“The truth is we don’t actually have a revenue idea yet. Well because there is so much potential in different ways where you can raise revenue streams…we are not nervous about it. Once it’s in operation the ideas are in place to implement them.” I’m very glad to hear it, especially as two other companies are hovering with similar ideas. But Taxihero started first.
I must still look puzzled, because he keeps going. “I could list out ten different scenarios of how we would potentially make money, but at the end of the day we haven’t exactly had a decisive decision towards that.” Well no, that much is crystal clear.
So, how have they raised funds thus far? Through individual high-networth investors, I’m told. He explains they are angel investors, no venture capitalists. It’s purely through personal connections with people who said “Yes this is a service we want to see here in Hong Kong - and they were nice enough to contribute.”
So assuming all these red cars are recruited, what’s in it for the cabbies? “Reducing their idle time – we get them more jobs,” says Ng. If they can cure the Pedder Street taxi clog and persuade blue Lantau cabs to show up on the airport rank without a call fee and an extra “incentive”, they get my vote. I just hope they don’t starve before they decide how to make some money.