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Mobile app drives digital disruption for London taxi company

Tom Kaneshige | March 12, 2013
Mobile transportation apps like Hailo and others have forced traditional taxi companies to pull a strategic u-turn. Here's the story of how 60-year-old Radio Taxis Group of London has gone digital and mobile to catch up to Hailo's disruptive powers.

Legacy infrastructure leads to the million-dollar question for Radio Taxis Group: Do call centers, account management systems, code-of-conduct and background checks for taxi drivers, and other traditional customer services matter to passengers? Digital disrupters, obviously, are more streamlined.

"Maybe the Hailo business model works, in which case we'll have to change and get rid of all the infrastructure, but I'd be surprised," Riesel says. "I think it's a mistake to make technology the master."

What's in a Name? Everything

And then there's the grand old brand.

Londoners know Radio Taxis Group well, and so do taxi drivers. Many of these drivers have a longstanding loyalty to Radio Taxis. They've put the company logo on their cab doors. They worry that violations of the code of conduct might result in a censor or even suspension from the circuit. Do they have the same loyalty to Hailo or any of the other dozen mobile taxi apps? Probably not.

Right now, there's slow demand from passengers for taxis in general. Taxi drivers are looking to tap any channel to score fares, digital or otherwise. If the market changes and passengers are everywhere, taxi drivers might be inclined not to use Hailo and give up 10 percent of their fare. This might also be the time to switch to a passenger-convenience fee for using the app.

All of this merely ups the ante for a successful debut of the app, now called "Radio Taxis, London's Black Cab." Radio Taxis Group's decision to tie the app name to the brand carries lots of advantages but can also backfire. What if the app proves more difficult to use than Hailo? What if no one uses it?

The fear is that taxi drivers will see a lot more fares coming from the Hailo app than the Radio Taxis app, which sit side-by-side on a taxi driver's smart phone.

"There's brand risk if it doesn't work," Brown says.

 

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