London-based taxi hailing app Hailo has decided to end its operations in North America where “the astronomical marketing spend required to compete is making profitability for any one player almost impossible”. The company will focus its efforts and sources to expand further in European and Asian markets instead.
Tom Barr, the co-CEO and president of Hailoi said in a statement, “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.” He added that they are “very sorry” for the impact on employees who will leave the company and do everything to help them with their future careers” Barr said in the statement.
Hailo has been trying to compete in North America with US-founded Uber and Lyft who both have stepped up their aggressive pricing and marketing activities to dominate the market. Barr told Financial Times that “… the profitability of the market and the type of environment (that other taxi-app companies) are setting up — both on the driver and passenger side — ceased to make sense to us.”
As a result of the termination of operations in the United State and Canada, some 40 people are expected to be laid off, including founder and co-Chief Executive Officer Jay Bregman, a significant shareholder in the company. who will pursue a new business according to the statement.
Hailo launched in the States approximately two years ago and expanded to 7 cities in North America. Global investors who support the taxi service include Union Square Ventures, Accel Partners, Wellington Partners, Atomico Ventures and Sir Richard Branson.