Home­grown mo­bile and In­ter­net ap­pli­ca­tion for find­ing the near­est taxi set to go global

Kathimerini English - - Front Page - BY YIAN­NIS PALAIOLOGOS

It all be­gan on a sum­mer night in 2010, when 47-year-old Nikos Dran­dakis, a busi­ness con­sul­tant spe­cial­iz­ing in new tech­nolo­gies and me­dia, was stuck in a re­mote part of the north­ern Athe­nian sub­urb of Ki­fis­sia and couldn’t find a cab.

“As I looked at a map of the area on my iPhone, I thought how great it would be if I could see the lo­ca­tions of the near­est taxis,” he told Kathimerini re­cently.

That was the first hint of his idea for Tax­ibeat, a mo­bile and In­ter­net ap­pli­ca­tion for call­ing a taxi that greatly changed the taxi mar­ket in Athens when it was launched and has al­ready ex­panded to Paris, Rio de Janeiro, Sao Paolo and Mex­ico City. The com­pany re­cently an­nounced that the Lon­don­based ven­ture cap­i­tal fund Hum­ming­bird Ven­tures is to in­vest some 3 mil­lion eu­ros in the scheme.

“We are look­ing to ex­pand quickly,” Dran­dakis said, ar­gu­ing that the taxi mar­ket is chang­ing dra­mat­i­cally all over the world. “If we wait to en­ter th­ese mar­kets with our own cap­i­tal, af­ter we’ve started to turn a profit, we will lose valu­able ground.”

Dran­dakis said that the com­par­a­tive ad­van­tage of Hum­ming­bird Ven­tures over other prospec­tive in­vestors is that it has “peo­ple with ex­pe­ri­ence, who are giv­ing us the know-how to build an in­ter­na­tional tech­nol­ogy com­pany.” Tax­ibeat’s col­lab­o­ra­tion with Hum­ming­bird is in­dica­tive of the speed with which the Greek startup, which was es­tab­lished in 2011, has trans­formed from a lo­cal en­deavor into a busi­ness with in­ter­na­tional am­bi­tions.

The path to ex­pan­sion has not been ob­sta­cle-free, how­ever: Dran­dakis had no prior ex­pe­ri­ence in start­ing up a busi­ness and com­ing up with the ini­tial cap­i­tal in a pe­riod be­fore the Euro­pean Union-backed JEREMIE (Joint Euro­pean Re­sources for Mi­cro to Medium En­ter­prises) pro­gram was a process that took sev­eral months. Pen­e­trat­ing the mar­ket was also no easy mat­ter.

“I vis­ited all the taxi stands in Athens and got to know the driv­ers in­di­vid­u­ally,” Dran­dakis said, adding that he now has rep­re­sen­ta­tives do­ing the same in ev­ery city into which Tax­ibeat ex­pands. Go­ing around in Athens, the cri­sis worked in his fa­vor.

“The driv­ers were in dire need of clients. We of­fered a ser­vice that would in­crease their clien­tele with­out them hav­ing to pay a reg­u­lar sub­scrip­tion,” the Tax­ibeat CEO said.

Tax­ibeat charges driv­ers who sub­scribe to the ser­vice for each fare they book. Ini­tially the driv­ers paid 0.50 eu­ros. To­day they pay 10 per­cent of their to­tal fares.

Another big help for Tax­ibeat was the emer­gence of a start-up cul­ture. In the first few months of its ex­is­tence, for ex­am­ple, the com­pany was housed in CoLab, the first co-work­ing space set up for new busi­nesses in Athens. The first batch of start-up money came from Open­fund – the pre­de­ces­sor of Open­fund II, one of the four in­vest­ment cap­i­tals of the JEREMIE pro­gram – as a re­sult of a start-up com­mu­nity Open­cof­fee event. One of Tax­ibeat’s first in­vestors was Nikos Mo­raitakis, then an ex­ec­u­tive at Up­stream and now CEO of the re­cruit­ment soft­ware de­vel­oper Work­able.

Dran­dakis hopes that new in­no­va­tive com­pa­nies and in­vestors with ex­per­tise in the field will emerge from the Tax­ibeat team, which com­prises a num­ber of share­hold­ers in the com­pany.

The most fas­ci­nat­ing part of the Tax­ibeat story, how­ever, is how it has trans­formed the taxi mar­ket in the Greek cap­i­tal. There was a time when taxi driv­ers would try to charge their cus­tomers ex­tra even for air con­di­tion­ing and the cus­tomer had no way of eval­u­at­ing the driver, mean­ing that driv­ers had no mo­ti­va­tion for im­prov­ing their ser­vices. Tax­ibeat of­fers users the name and pro­file of their driver as well as a rank­ing com­posed of cus­tomers’ eval­u­a­tions. In the past year, 800 of the com­pany’s fleet of 2,500 cabs have been equipped with Wi-Fi.

“The most im­por­tant re­forms in any mar­ket are achieved mainly through tech­nol­ogy,” Dran­dakis said.

And it is true that Tax­ibeat has man­aged to change the sec­tor more sig­nif­i­cantly than its lib­er­al­iza­tion un­der the terms of Greece’s bailout agree­ment with the coun­try’s cred­i­tors did, and this with­out all the drama be­tween the gov­ern­ment and cab­bies back in 2012.

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