The ongoing battle for taxi app supremacy between Lyft and Uber has claimed what is likely not its first, nor its last, victim. This is a competitive market, and with two dominant players, it can be extremely hard for smaller companies to muscle their way in.
London-based e-hailing app Hailo has decided to pull out of the North American market, it has been confirmed to VatorNews, citing, “the astronomical marketing spend required to compete.”
In a statement, Tom Barr, co-CEO and President of Hailo, said that such costs are “making profitability for any one player almost impossible.” Instead, the company will put its focus on its more profitable regions, including Europe and Asia.
“This has been a difficult decision to make, and we are very sorry for the impact on our colleagues who will leave the company and are doing everything we can to help them with their future careers,” Barr said. “We and our investors are confident that our sharpened focus on Europe, Asia and services will help us have the biggest possible impact for our passengers and drivers.”
Hailo had been available in seven cities in North America, including New York City, Chicago, Boston, Washington, D.C., Atlanta, Montreal and Toronto. In all, 40 employees will lose their jobs as a result
In addition to this news, Hailo has also revealed that co-founder Jay Bregman will be stepping down from his role as co-CEO, leaving Barr in sole control of the company. Bregman is leaving the company to start his own business.
“As always it is a bittersweet moment – but Hailo has grown far faster than I ever could have imagined and there are far better people to take it from here,” Bregman said in a statement. “Over the last few months I have been seduced by recent developments in robotics and it seemed the time was right to build something new.”
Founded in 2011, Hailo first launched in North America in September of 2012, before coming to the United States in October of 2012, with its first stop in Boston. And, for a while it seemed as though Hailo couldconceivably be a real competitor to the likes of Uber; at one point it has even out raised Uber, with more than $50 million to Uber’s $45.
Well, it didn’t exactly work out that way. Uber became a phenomenon, taking the country by storm, with Lyft right behind it. The company then raised a record-breaking $1.4 billion in funding at a $17 billion valuation, leaving smaller competitors like Hailo in the dust.
In all, Hailo has raised over $77 million in funding, most recently a $28.85 million round in January of this year. Investors include Atomico, Union Square Ventures and Accel Partners. The company serves more than 1.4 million passengers around the world and had more than $100 million in revenue last year.
Given the ongoing and escalating battle between Lyft and Uber that is currently going on, Hailo might be making the wisest decision of all by pulling out.
This news was first reported by the Financial Times on Tuesday.
(Image source: mfhughes.com)
