Business in focus: Autocab
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Jon Smith is CMO of Autocab, the world’s largest provider of taxi booking and dispatch systems software. But to get to that position, Autocab had to undergo a radical re-engineering of its offering, without which it might not have survived.
We caught up with Jon to discuss the challenges of managing such a transition, why Autocab is always evolving – and the driverless cars of the not-so-distant future…
So how did Autocab come about?
Autocab was founded in 1992, back when taxi booking systems were in their infancy – it was all two-way radios, very basic computer systems, and operators sitting behind grilles in smoky minicab offices. Our founder, Dr Falah Abod, was a computer scientist with friends in the taxi industry who were complaining about the current systems.
So literally over the course of a weekend, he knocked up a prototype of a system, and started selling the kit out of the back of his garage. It blew everything else out of the water that was available, and the business quickly took off. The kit was very disruptive in its own way at the time, a hardware-based solution involving expensive data terminals in cabs to connect the driver to the office.
On Dr Abod’s death, his brother-in-law became ceo. Safa Alkateb has a Silicon Valley tech background, and quickly decided that the future of the industry was in a SaaS subscription payment model – not data terminals and guaranteed 5-year contracts, but rather apps and web-based software with revenue accruing from a single charge of £3.50 per driver, per week.
How is the company doing now?
We’re now on track for £10m turnover on the SaaS side, going from nought to that in just four years. We’re operating in 20 countries and 550 towns and cities around the world. We facilitate over 1million+ trips per day worldwide, undertaken by more than 130,000 vehicles.
That must have been a massive transition from where you started.
Yes, it was a radical overhaul – it involved huge changes on every level, from the revenue model to the organisational structure to marketing. We transitioned from a capital-based model to a SaaS-led model.
There was a small restructuring involved, and we retrained and re-positioned people wherever we could, for example from field engineers to more office-based support roles. Our building needs changed too.
But taking that risk basically ensured the longevity and survival of the company. Without it, we’d have fallen by the wayside, like several of our former competitors. We basically wouldn’t be here at all.
Industry: Computer Software
Company size: 51-200 employees
HQ: Cheadle, Cheshire
Ownership: Privately held
Sub-sector: Software, Hardware & Developers
Did you take on debt or engage outside help to fund and manage the transition?
No – the company managed the whole transition with its own resources and no additional external investment. The owners took the brave decision to gamble on an initial tight period and see it bear fruit in later years. In the first years we were still selling some capital products to support the SaaS revenues.
There were a lot of successful SaaS-based businesses out there, so we knew the model had the potential to work. But still, you did need a critical mass of taxi firms paying £3.50 per week per driver. It’s a volume play – the owners did the maths, and they held their nerve, and the sales guys did an amazing job.
The biggest challenge was doing it lean. Cashflow was already hampered by the switch to SaaS, so we had to find ways to market effectively on a tight budget. We’ve moved from a traditional event and field-based marketing operation to a data-driven, digital-led approach.
So how does Autocab work?
Customers can book a taxi via a white-labelled passenger app, web booking or via phone. The driver receives the booking on their driver app which directs them to the passenger. Customers who have downloaded the passenger app can see the progress of their driver, driver details, manage their payment cards and will know the cost of their ride in advance – all the features that are familiar to people who’ve used ride-hailing apps.
Our white-label app means even the smallest local firm can offer their customers the very latest ride-hailing technology, we can also provide a phone system that’s optimised for taxi businesses. One of the challenges is building apps that offer an identical user experience across iOS and Android. The back-end languages are completely different, but they have to look and feel the same for the end user – both passenger and driver.
How does Uber fit into the picture?
Uber isn’t actually a competitor of ours – but it is a competitor of our customers. Our app was already in development at the time of Uber’s launch, but they were of course the prime disruptor. We’ve helped other players to stay competitive in the wake of that revolution. Taxi firms have to offer both their customers and their drivers apps to have any chance of competing in the market these days.
Uber was of course a key moment for the taxi industry, but the need for change was inevitable. The taxi industry had got away with a lot for a long time – poor service, rude drivers, unreliable timing. Ride-hailing apps have shown that you can do taxi well, with all the benefits like driver rating, vehicle tracking and safety that people expect these days. And, of course, technology has played a huge part in that – we’ve helped private hire firms transform from the old stereotype of a bloke smoking behind a grille to a tech-facing, on-demand, app-based service.
Using our aggregated network iGo, our taxi firm customers can pass jobs between one another for a commission. They can receive jobs from other firms and aggregators who feed work into our network. The backend manages all these complex requests globally, but all the end user sees is the ability to book locally, nationally and even internationally via their usual local taxi app.
So where next for Autocab?
We hope to have a big future in the taxi industry – we’re at 50% penetration in the UK but less in some other territories, so there’s still lots to aim for there. But we’re not stopping there. We want to move deeper into the mobility space – to develop a mobility platform that can be used by any company looking to provide trips to their customers.
A good example would be a holiday booking platform that can use us to upsell taxi trips to and from the airport as part of their customers’ online travel booking process. A big global travel player wouldn’t want the hassle of managing individual taxi operators everywhere, but they can use our aggregated network iGo as a one-stop shop and add that on to the holiday booking.
We’ve proven ourselves with taxis, we’ve shown ours is a well-proven platform that can scale. We can support anyone who wants to enter the mobility space with a tried-and-tested turnkey solution that’s proven, not theoretical. And that, of course, includes autonomous vehicles.
Absolutely. We think car ownership is will change radically. In the future, it’s likely that people won’t want to own their driverless cars so much – there’s likely to be some sort of subscription or rental fee-based model – Transport-as-a-Service.
We can envisage an on-demand app where you order up a vehicle, it comes to you, serves your trip, and then goes off and serves another customer. We believe we can provide the booking platform that can facilitate that, and we hope we can work with a number of car makers to roll that offering out globally.
We want to educate car manufacturers, rental car firms and large fleet operators about the importance of owning individual trips, which pass through platforms like iGo. Because in the years to come, people may gradually choose to swap a taxi ride for a trip in an autonomous vehicle.