Unlike rival app Uber, Hailo allows people to hail licensed taxi drivers. The firm — founded in 2011 and backed by high-profile investors like Virgin billionaire Sir Richard Branson — pulled out of America in October 2014, where Uber has snapped up the majority of the market share.
The discontinued US operation racked up losses of £11.76 million for Hailo, more than half of the company’s overall losses in 2014.
When Hailo withdrew from the US, it said it was unable to compete with its American rivals because it lacked the marketing capital that they had.
“The astronomical marketing spend required to compete is making profitability for any one player almost impossible,” the company said in a statement issued to media.
Having raised over $100 million (£69 million) from Accel Partners and others, Hailo doesn’t exactly appear to be short of cash. But its US counterparts like Uber and Lyft are raising significantly more and using it to fund aggressive marketing campaigns. Uber, now valued at over $60 billion (£41.2 billion), has raised in excess of $6.6 billion (£4.5 billion), while Lyft reportedly spent $96.1 million (£66.1 million) on marketing in the first half of 2015 alone.
Despite the heavy losses in 2014, Hailo was still able to increase its overall revenues by 39% to £7.9 million.
Hailo has been through a number of CEOs as it looks to secure its place in the crowded taxi app market. Former Carphone Warehouse COO Andrew Pinnington was appointed CEO last January after cofounder Jay Bregman and Tom Barr stepped down when Hailo closed some of its international operations.
In a bid to drum up more business, Hailo started allowing private taxi drivers to pick up passengers through the app. However, after protests from London’s black cab drivers, the company backtracked on this move last October.
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