This is transportation business model innovation at its best in the digital commerce era. Taxibeat, an app maker that enables mobile phone users to find a cab, recently raised $4 million in new venture funding. The round was led by Hummingbird Ventures, a VC fund from London. Taxibeat enables passengers to choose nearby taxi drivers based on their record, and hail the driver they prefer, using user ratings, distance, car model and on-board amenities, with no additional cost.
Taxibeat was Co-Founded by Nick Drandakis (CEO), Nick Damilakis, Kostis Sakkas (CTO) and Michael Sfictos in 2010. The company raised $2 million in venture funding in July. This latest round brings its total to $6 Mn. What was cool was the use of KARMA (a sanskrit word that mean good or bad deeds) points. So if you make the driver wait you lose Karma points and if you do good things you gain.
What's unusual? well, the way they handle payments. As their site says, when you click on the payment button, you will be transferred to a Paypal page from where you’ll be able to select whether you want to pay by credit card or using your Paypal account. So no cash option, only digital and provides Paypal which is good. Secondly you don’t have to pay for accounts due less than 10 Euros. The amount will be transferred to the next months statement, and will have to be paid when it exceeds 10 Euros. So they are running it as wallet and building long term relationships with customers.
How does it work?
About their platform:
Taxibeat enables users to pick the taxi driver that they like, based on their preferences and the ratings from previous customers or friends.
On this app, the drivers have the opportunity to sell themselves. They get full profiles including types of cars, interior facilities and spoken languages, enabling them to build up a repeat customer base.
Drivers are allowed to display options such as WiFi and On-Board Charging to attract customers.
A small commission is paid by drivers for the rides that they earn via TaxiBeat.
Taxibeat says it currently undertakes $40 million (USD) in taxi cab transactions annually and is growing at a rate of 18 percent month over month. I think its a reasonably good traction in the crowded market with several competitors. “Taxibeat makes vying for customers competitive because it does more than strip out the call to the taxi operator or create a simple ‘blind date’ between passengers and drivers. This is more like Airbnb for Taxis,” said CEO Nikos Drandakis.
The service has been deployed in a number of cities worldwide since its launch, including Sao Paulo & Rio de Janeiro (Brazil), Bucharest (Romania), Paris (France), Oslo (Norway) and Mexico City (Mexico). According to Brazilian tech blogs the investment from Hummingbird is set to fuel Taxibeat Brazil operations in every FIFA 2014 World Cup Hosting city.