Hailo blames “astronomical” marketing costs for US exit
UK-basedTaxi app provider Hailo has pulled out of the American market, blaming “astronomical” marketing costs that made profitability “almost impossible”, the company said.
Hailo originally launched in 2011 as a London black taxi app, allowing customers to hire a taxi without hailing in the street. allowed passengers to hail a London black cab via its app. But it provoked an angry reaction from cabbies in the Summer when it extended the app to Private Hire operators, with many taxi drivers refusing to use Hailo and taping over advertising for the app on their vehicles.
A US launch took place in 2012, but Hailo has been unable to compete with market-leader Uber and car-sharing start-up Lyft. Hailo chief executive Tom Barr told the Wall Street Journal that profitability was “almost impossible” for any single player in the US market. Indeed, Uber employs aggressive marketing tactics to encourage new sign-ups, offering heavy discounts to first-time users.
In a statement, Hailo said the “astronomical marketing costs” required to build the brand and compete against Uber were too great. Around 20 employees will lose their jobs.