With Hailo’s goodbye, Mytaxi CEO Andrew Pinnington explains that the real fuel driving the Daimler-owned venture is data.
If you really want to know where car manufacturers stand on the future of self-driving vehicles, Mytaxi CEO Andrew Pinnington has the answer.
“We stand with the drivers. And with our network of 120,000 drivers, we are in the driving seat. Simply, we see data as the differentiator between having a brand identity or going the way of most commodity goods. The latter is simply not going to happen.”
‘We are bringing a 17th century trade into the 21st century and doing that in harmony with the city’
– ANDREW PINNINGTON
I meet Pinnington at the Mytaxi offices in Dublin just as the business is in the process of rebranding from its former Hailo identity. Downstairs taxi drivers come and go, getting up to speed on the new Mytaxi app that replaced Hailo in Ireland last Monday (6 March).
Hailo, which was founded by a group of London taxi drivers in 2009, merged with Mytaxi last year. Auto giant Daimler – owner of car brands such as Mercedes – acquired a 60pc stake in the new venture.
Hailo, as it was formerly known, had grown to become the dominant taxi app in Ireland and is used by more than 10,000 Irish taxi drivers in Dublin, Cork, Limerick, Galway and some principal towns.
The rebrand to Mytaxi has been steadily rolled out in European markets in recent weeks. But ‘rebrand’ doesn’t do it justice; it is effectively a vast technology project, porting users over to the new app. Business accounts connected to Hailo will move over in the coming weeks.
It is no mean feat when you consider that it involves 50 cities in nine European countries.
Cool, calm and collected, Pinnington said the merger and subsequent acquisition by Daimler, also the owner of Mercedes, will make Mytaxi the European leader in the ride-sharing market.
“It gives us the deep pockets we need to go into other markets and be the number one player in this space.
He sums up what the taxi app business is all about: “We are bringing a 17th century trade into the 21st century and doing that in harmony with the city.
“The merger was a much more natural approach than having to go raising loads of capital and competing, beating each other’s brains out. It was a natural transition that puts us on the road to leading in Europe.”
Pinnington began his career at Bain & Company. He completed his MBA in the US and worked with PepsiCo for a number of years before joining Carphone Warehouse when it was in its infancy. He moved to the Hailo team two years ago.
“Having this scale brings significant benefits. It gives us shareholders with deep pockets, puts us all under one umbrella and enables us to invest in technology and develop the business more quickly.”
At the same time, Pinnington wants to give the local operations of Mytaxi their own autonomy. “It is about creating a strong core with a great deal of local flexibility.
“Here in Ireland, one of the reasons the Hailo brand succeeded was because Tim Arnold and his team adjusted it to feel more Irish. A lot of the communication feels very local, with a personal feel, and we are going to carry that on.”
Arnold said that Mytaxi employs 23 people in Ireland and the intention is to continue to grow the brand and localise it.
Apps such as Mytaxi and Uber are redrawing the map and transforming the landscape when it comes to the taxi business.
“Our approach and philosophy is all about what we call ‘constructive disruption’. For our business to succeed in Europe, we have three stakeholders to consider: passengers, the drivers and the regulators. We are trying to balance the needs of all three because of our heritage and the need to stand out.
“The lynchpin is by making ourselves more appealing to drivers.”
This means creating tools and services that make taxi drivers’ lives easier, with less friction. New innovations include pooling services and the ability for drivers to find assignments that match their homeward journey so that the asset that is their car is still making revenue.
“The more supply that we can bring into the market and the more share of that supply’s time, the more we can provide better services.”
While taxi apps empower the drivers, efforts by Uber to develop self-driving cars must surely worry them. Pinnington believes that self-driving cars are inevitable, but they are still a long way off and there will always be a need for human drivers.
“It will be a long time before that gets to significant scale. I don’t think you will see a sudden jump with 100,000 autonomous vehicles on the road with zero drivers. I think there will be a slow transition to driverless vehicles, but not all cars will be driverless.
“In every market, there are grades of service where people require drivers with specialist skills and capabilities. You will have big families and elderly people who need assistance getting in and out of vehicles.
“As you get to a critical mass where perhaps 50pc of cars become autonomous – and that could be decades into the future – the usage of on-demand transport will increase.
“100pc of the market may not be driven by a human, but the volume will be bigger and the percentage of that volume will mean that there will still be lots of jobs for drivers.
“I am absolutely confident that there will be an ongoing relationship with drivers for the foreseeable future.
“Without revealing competitive secrets, we have a lot of things in the pipeline. We have 120,000 drivers across nine European markets and we have negotiating leverage to offer drivers better benefits than our competitors.”
Pinnington added that Mytaxi will invest heavily in marketing and technology.
What is driving Daimler?
I ask Pinnington what Daimler’s motivation has been in acquiring a 60pc stake in Mytaxi. “The short answer is data and preventing disintermediation,” he said.
“You are correct in saying we are the only taxi app that is majority-owned by an OEM. Daimler has some good reasons for this. The first is data.
“In developing its own autonomous vehicle programme, the more data you can gather in terms of how people move around cities and how transport works today, the more powerful the programme becomes.
“Every five seconds, we get GPS from tens of thousands of vehicles, we get billions of points of data, and that is a hugely valuable source of information that is adapted to the European environment, which is hugely different to the US grid system.”
He said that Daimler’s second reason for investing in Mytaxi is defence.
“Car manufacturers are watching the future warily and realise there is a danger that if they don’t take preventative action, they could become commoditised. What they see is a lot of research about how people are changing their ownership, and some brands are in danger of being disintermediated from the consumer.
“While the volumes of cars are likely to increase, ownership of a driver’s license as well as a car has dropped rapidly in the last 10 years.
“There is a longer-term trend of people in urban areas not owning vehicles. Let’s face it, most cars sit dormant for 90pc of their time. Technology could change this in more ways than we can imagine.
“If you look 20 or 30 years into the future, more people will not own the asset that car makers manufacture, but they will want it on-demand. Whether or not that is going to be an autonomous vehicle, they are nervous about someone owning that demand, whether it is Uber or Apple or Google.
“The worst-case scenario could be someone ordering 50,000 vehicles, outlining the specification but with their own brand on it and not the manufacturer’s.
“So brands like Daimler are moving to make sure they do not lose that connection with the consumer, never lose control and do not end up as a commoditised manufacturer of vehicles for someone else.
“The last time you sat on an aeroplane or train, did you wonder who manufactured it?”
After the rebrand, Pinnington said that the priority will be product development.
“There is huge potential for us to grow and make the driver’s day more efficient and help them to earn more.
“We have undoubtedly helped increase passenger demand for taxis since 2012 and with new pre-book services for consumers, our whole motivation and our goal is to ensure that drivers are earning as much as possible.
“This means finding ways to make sure that there are no more ‘dead miles’ and that the asset they drive is earning for them at all times,” Pinnington concluded.
“We were founded by drivers and they are our driving force.”