Only six years ago nobody had heard of iPhones or Androids, today most everyone has one. Ten months ago no one had heard of taxi apps like ingogo and goCatch, today their combined claims suggest nearly 5,000 cabbies and 60,000 passengers have downloaded one or the other and signed up as users and those numbers are increasing daily. There is nothing that can stop the growing popularity of taxi ‘hail’ apps because they provide what the networks have consistantly failed to deliver - improved productivity, more income for drivers and better and faster service to the public.
by Peer Lindholdt
According to a 2010 report by the NSW Independent Pricing and Regulatory Tribunal only 20% of Sydney fares are generated by the taxi networks, the rest come from hails, trunk groups and private clients. Makes one wonder what justification they have for charging their operators $8,000+ p.a. in network fees.
There isn’t any. They get away with it only because governments make it compulsory for operators to belong to an accredited network and fail to regulate the fees they can charge.
It is distinctly possible that the introduction of the hail app will compel some state governments to reassess this part of the regulations, hence the feverish attempt by taxi councils to discredit the apps and have them banned or regulated to death.
London’s famous black cabs do not have to belong to a network and less than a third do, the rest, about 15,000, choose to live off hails and regulars. So says my mate Stanley, who has been a black cab owner-driver for 52 years, turns 76 in April and still drives five day shifts every week. He was also one of the first London cabbies to trial black cab hail app Hailo when it was launched last August and today seems to think it is the best thing since sliced bread.
Hailo works much the same way as Aussie apps. Pax can hail a cab and watch it’s progress on their smartphone, and pay by credit card. But, that’s where the similarities end. Unlike our apps, which provide jobs to drivers for free and pay us a percentage of any card transaction fee, Hailo charges Stanley 10% of the metered fare on the jobs he accepts plus 4% on credit card transactions. Passengers pay only the metered fare. No doubt consumer gurus like Prof. Allan Fels would like to see the same here.
In the meantime our apps are powering ahead with no government interference. Not yet anyway.
GoCatch co-founder Andrew Campbell claims having more than 4,000 drivers Australia-wide signed on and ‘ingogo’, which requires more stringent identity proof and is presently only rolled out in Sydney, but will enter the Melbourne market this month, has broken its December target of 750 drivers. Both claim to have more than 30,000 passenger downloads.
That the taxi industry mafia, meaning the networks and Cabcharge, are worried is understandable. This powerful cabal, which has controlled the industry and government policy for decades, is fast losing its grip.
Cabcharge has particular reason to be concerned should paying fares by smartphone take off. It has millions invested in EFTPOS terminals which could soon become obsolete as usage drops and providing, maintaining and upgrading them therefore becomes uneconomical.
George Mickael, the owner of GM Cabs, the second largest provider of mobile EFTPOS in Australia after Cabcharge, has been quick to realise the wisdom of “if you can’t beat them, join them”. He has signed a deal with goCatch to enter into a joint venture, bought smartphone payment system developer TPay outright and plans to launch his own app, GM Go Mobile, using their technologies. A very astute move, if you ask me.
Also, last month ‘ingogo’ founder, Hamish Petrie, revealed he is ready to roll out his smartphone payment system, which instead of the 10% fee charged on EFTPOS will charge only 8% with a generous 5% going to its drivers. Both fares and bonuses will be paid into their nominated account the next business day. Pretty cool.
However, passengers who hail a cab using ingogo are charged a so called ‘ingogo base fee’ of $1.80. I wrote, mistakenly, in our last issue that drivers would get half of that. It is retained in full by ‘ingogo’, and that has a few drivers crying “rip-off” as drivers in Sydney get the $3.30 booking fee on network jobs.
Well, apps are not networks. Belonging to a network is compulsory and costs taxi operators thousands of dollars a year. It doesn’t pay drivers commission on electronic transactions or enable us and passengers to communicate directly with each other. And they don’t provide live Google mapping showing the position of drivers and passengers, thus reducing the problem of ‘no jobs’ and ‘no shows’. GoCatch and ingogo do .... and for free.
The entry into the app market by GM Cabs is muddying the waters. Owner George Mickael has thousands of loyal supporters using his EFTPOS terminal and selling his Go Mobile app to them should be a breeze provided the deal he offers is competitive. The same of course applies to Cabcharge should it decide to launch its own app.
The battle of the apps has only just begun in ernest and no doubt OZ Cabbie will have riveting reports from the front in future issues. Stay tuned.