Taxis, technology and why the race to go global could be more important than mobile
The competition to get customers from A to B is hotting up as recent demonstrations around Uber highlight only too clearly. Jens Wohltorf, founder of chauffeur service Blacklane shares his thoughts on this fast evolving industry
When it comes to any new and disruptive technology it’s inevitable that there will be some speed bumps along the way.
Earlier this year our new ‘smart class’ car ran into difficulties when regulators insisted that taxis and limousines must have two doors on the right hand side so that passengers can easily exit the car, even from the back seat. The ‘smart class’ only has one door and no back seats and for journeys over five kilometres is up to 20% cheaper than an ordinary taxi.
But with a constructive, open dialogue, we seem to have successfully challenged a 30-year-old taxi law that was no longer relevant and we are confident that fellow innovators like Uber can do the same if they are flexible in their approach.
At Blacklane we strongly believe that ultimately it’s in the interests of the consumer to make bookings and pay for a car or taxi as quickly, easily and safely as possible.
After all, the competition between travel technology startups looking to get people from A to B is intensifying and what’s more venture capital firms are taking big gambles on these firms.
This is partly due to the widespread adoption of smartphones and the ever-increasing demand for a more convenient and affordable travel experience. An interesting statistic I came across while researching this piece was that according to CrunchBase data, investors have funded travel technology startups in more than 40 different countries since 2009, investing over $138 million in the UK, more than $96 million in Germany, and $81m in France.
Innovation is what it’s all about and for entrepreneurs keen to beat the competition my view is that the primary focus should be on building a global business. And they should be doing that from day one. In fact I would even go as far as to say that while providing a mobile solution is the key to success for most technology companies, when it comes to travel technology, there is arguably more to be said for going global first.
When it comes to travel technology, there is arguably more to be said for going global first.
For travel tech startups, focusing on the domestic market or a few neighbouring countries is just not sufficient. Having a limited geographic footprint won’t make travel more convenient for those looking to travel further afield.
The modern traveller wants the convenience of organising travel through one global service, as this avoids the need to download local apps and clones when arriving in a new country. When a consumer is presented with local apps and services, they may find themselves questioning whether the service will be reliable, trustworthy or affordable. This, combined with the time required to research local apps and the need to re-enter card details for local services, means that a global service will always trump a local one.
A global travel company will eliminate these risks and inconveniences for the modern traveller. Business travellers today, for example, use Blacklane’s chauffeur portal because it is a global platform that they can rely on in cities from Sao Paulo to Sydney.
For Blacklane users, there is no risk of being stung by surge pricing models or let down by an unreliable clone; they know exactly what standard of service to expect in any market. And there is no doubt that demand for long-distance chauffeur travel is on the up – the longest single trip booked with Blacklane was a whopping 1,250km ride from Istanbul.
Being global-first was the reason behind Blacklane’s project to add 100 cities to its network in just 100 days. And this rapid internationalisation of the network has already had an impact on bookings – multi-city bookings have increased from 14% to more than 50% of total bookings as a result of the expansion project.
However, going global overnight is easier said than done. One of the main things to consider when expanding is establishing the right approach to local partnerships before crossing borders. Partnering with a new travel technology company can often be a big risk for local businesses, so it’s important to make the proposition as appealing as possible by being transparent and offering fixed rates. Freedom to operate and transparent prices, coupled with a reliable service will all be attractive to local operators.
It is also important to take cultural differences into account when expanding and tailor the product accordingly. As Blacklane grew internationally, for example, the team noticed that in Asia and the Middle East, car brand and size are more important for customers, while in Europe, there is usually a preference for understatement. In addition, US customers tend to book more spontaneously, while Asian customers pre-book further in advance. Startup teams need to have a keen eye for such cultural differences and calibrate the product to accommodate for them and monetise where possible.
While a mobile-first strategy has worked wonders for the likes of Twitter and King, the same is not always true in the travel industry. Sometimes, a mobile-first approach can be valuable, as demonstrated by the success of companies such as HotelTonight, for example. However, the race to go global counts for so much more in such a competitive market. The primary aim of any travel tech company should be to make travel more convenient, and it’s only with a truly global product that this is possible.
EFT take: Across the travel industry we are seeing disruptive and innovative travel tech companies facing regulatory constraints. In New York, Airbnb has come up against the attorney general who is determined to stamp out illegal activity. Last week we saw this reach a crescendo with the demonstrations across Europe against Uber. The allegations are that this young upstart, with its eye-popping valuation, is not playing by the rules. So, yes, we agree with Blacklane that speed bumps are inevitable and that constructive and flexible dialogue could help smooth some of the blips. However, we also believe the wave is unstoppable; the bottom line is that in today’s digital world consumers know what they want and increasingly understand how much new technology benefits them. The 850% surge in rider sign-ups after Uber hit the headlines proves the point! But companies, like Uber, that are riding the wave must, with the utmost precision, tread the fine line between being a bright star in the business world and a brand that people love and trust.