SINGAPORE on Wednesday said hello to Hailo, a London-based taxi-booking app, and at least the fifth such third-party platform (after GrabTaxi, Easy Taxi, MoobiTaxi and UberTAXI) to hit the roads here in the last two years - a move observers say should further unnerve "traditional" taxi companies that continue to dismiss disruptive technologies.
Hailo, like its peers, lets mobile users book a taxi from any of the six local taxi operators and, like UberTAXI and Easy Taxi, allows cashless payment for those who register their credit cards on the app.
But unlike the others, in-app payment is set to be available even when the commuter flags a Hailo taxi on the street, chairman Ron Zeghibe told The Business Times.
Observers said that this service, Pay with Hailo, could run the competition off the road. But while most of them see Hailo as yet another independent disruption to the taxi industry, Mr Zeghibe calls it a "constructive disruption" that could start a shared economy between taxi companies and third-party apps here.
For one thing, the company that manages the localised app is the first tie-up in Singapore between a third-party app and a local transport operator. Hailo Singapore Pte Ltd is owned by Hailo Network Holdings and SMRT Road Holdings (SMRT Roads).
"By partnering SMRT Roads, not only can we enhance the Hailo app with the resources, infrastructure and relationships that SMRT has already built up to provide a new level of quality and service for users, we show that we can work with - not around - local taxi companies, and not have to circumvent them," said Mr Zeghibe.
For a start, SMRT Taxis and Prime Taxi have pledged their support to Hailo, meaning they won't discourage their drivers from using the app.
Trans-Cab Services, however, which has previously declared it would remove any third-party app decals found on its taxis, said it would continue to monitor the situation before making any decision. The latter has a dedicated taxi-booking app for its close to 5,000 taxis.
Premier Corporation, one of the smaller players here, said it had no intention of starting its own app, but qualified that third-party apps could definitely help to match demand with supply and benefit end-users.
ComfortDelGro, the largest operator with a fleet of about 16,600 taxis, did not respond to queries. It runs both Comfort and CityCab taxis.
Meanwhile, SMRT, when asked if it would phase out its own app after partnering Hailo, said it would continue investing in both apps. "They are both good options with different benefits: Hailo, as a separate business entity and product, connects customers to a broader range of taxi drivers across multiple operators . . . while SMRT's app will remain available to customers who wish to book an SMRT-only taxi, including our Chrysler Limos."
It added that its call centre services will be maintained, but reviews are underway to ensure that service levels meet industry standards.
Gary Hui, co-founder of EasyVan Singapore, however, cautioned that call centres that do not add much value and act merely as an additional middleman would hurt overall efficiency, be marginalised and eventually be edged out of business.
"Third-party apps, on the other hand, are faster, better and cheaper . . . they represent a pool of additional supply that can meet the excess demand traditional operators cannot handle with their limited driver base . . . allowing the latter to focus on expanding their main business and maximise earnings too."
Ultimately, disruption is about being solely focused on giving consumers a better, cheaper and faster way to do something, said Patrick Grove, co-founder of global investment firm Catcha Group. "Taxi companies need to be willing to challenge all the assumptions in their existing business, and take a big leap of faith into the digital world. Those that do not wholeheartedly embrace innovations or disruptive technologies . . . should watch out."
On whether the SMRT-Hailo partnership suggests a turning point for traditional taxi companies here, Mr Grove said no. "I think when you (Hailo) enter a market late, you need to have a different strategy such as working with incumbents . . . but in the end, history has shown that those solely focused on disrupting and moving fast will win the hearts of the consumers, and win."
At present, all third-party taxi-booking apps are not regulated in Singapore. But this could change as the Land Transport Authority (LTA) continues to review the impact that these technologies have on the industry.
"Third-party taxi-booking apps . . . are currently allowed to operate in Singapore," LTA said. "However, to better protect the safety and interests of commuters, some basic regulations are required, and LTA is studying the issue. We will share more details when ready."