Urban travel app and service Uber has become part of the daily vernacular for digital transformation and disruption. Yet in an ever so English way, quietly growing into a significant rival to the San Francisco start-up is Hailo, currently an app for cabs. However, as its CTO explains, the Hailo business sees a longer and more diverse journey ahead of it beyond the humble cab.
Hailo and apps such as SpoonRocket, theTrainline.com, BloomThat and FancyHands are the business phenomena of today. The economy remains challenging. Disruptive organisations like the apps mentioned above are fast-growing businesses despite the recession. What CIO UK finds so interesting about them is that their core proposition is to either take away an unlikable task such as driving or cleaning, or to make a retail experience so much more pleasant and constructive. As a result these business are disrupting stalwart retailers, or as in the case of Hailo, reinvigorating a business that not too long ago looked unhealthy. All of a sudden cabs are increasingly relevant to those of us looking to shed the excessive cost of car ownership. This in turn will and is disrupting sectors such as oil production and insurance.
Founded in 2011 by former cab drivers, Hailo has expanded its service to include a wider range of private hire vehicles, which triggered a spate of vandalism to its offices by the very cab drivers it offers work to.
App-based business services are potentially disrupting the fabric of our society, which was first formed by the industrial revolution in this country and created large employers, trade unions, cities, and much more. All of this, as recently explored by The Economist, is under threat.
Rorie Devine was CTO of Betfair for four years. The fast-moving, exchange-based gambling site was part of a wave of internet firms that disrupted gambling, gaming and retailing. So it’s no surprise to find Devine heading the technology leadership of Hailo.
“Hailo is nearest to Betfair for rapid growth, but it’s been a huge shift,” he says of the organisation he’s been with since July 2013. “The world is going to variable- rather than fixed costs, and people are getting used to on-demand services,” Devine says of how car travel is heading down the same route as Netflix. “So the cost effectiveness of the service we offer is amazing.
“It’s officially the best funded start-up in Europe ever,” Devine says of Hailo. We’re sat in Hansom, a meeting room named after a format of cab. “This is like Betfair on steroids for hyper growth,” he enthuses, comparing the two organisations. “We are in a different place in our maturity curve, which is all about growth, quality of service to both drivers and to passengers,” he says of the youthful company.
For a business technology leader, even one with a pure online heritage, Hailo is an interesting change in direction as a business reliant on an app.
“Our website is a subsidiary of our app,” explains Devine. “An app is a very different dynamic. The paradigm has shifted again as the mobile first world frames your relationship with your customer to be all-encompassing, and to be about short and sharp interactions. It’s about simplicity and effectiveness, so you have to deliver a great service to your customers,” he says. Adding that as people’s lives become increasingly complex an app-based business service has to offer customers something that makes their lives better, which he believes increases the value of your service to the customer.
“It’s harder to deliver a simple experience than a hard one. I’ve always been the person that likes to boil things down and clarify them.
“There are two different platforms, iOS and Android,” Devine says tellingly of winners and losers in the mobile operating system battle.
With just 100 employees and already a global business, Hailo is an example of how disruptive its business model is as it provides a service using existing assets rather than having to invest in infrastructure or hardware. No payments are handled by Hailo, Devine says it would be foolish for the company to take the risk when there are better providers out there that specialise in payment services.
“The world used to be very proprietary, now its about bringing services together and adding value and integrating into people’s lives,” he says. “London is brilliant for IT and we are good at software and can gain a lot of talent from across Europe,” Devine says of the benefits of running his team from Somerset House, facing the Thames River in central London. But despite all the hyperbole from Boris Johnson of the Conservatives and the coalition government about London’s place as a hot spot for technology development, Devine is cautious and honest about the limits to the UK’s strength. Devine argues that the weakness is not in the ideas or ability to build and deliver technology products, but in our national ability to fund and put our weight behind new developments.
“Our chairman made a good point, that you get to a ceiling in Europe and the UK for funding, and that is a disadvantage. We don’t yet give ourselves enough confidence,” Devine argues. It’s a real issue for the new wave of businesses like Hailo, who are against US firms such as Uber that have access to the more confident US tech investment community. At the end of the interview, Devine adds that Hailo is important as a UK business, it pays UK corporation tax and pays UK resident workers.
“We’ve got the talent and the start-up phase is very good. What we need is the layer to take it further or we will lose out. We like change and the new. Our culture is a country that is progressive,” Devine says. The interview took place in late 2014 and as we publish in February 2015, it’s a sobering reminder of the forward-looking skills within the CIO community, so totally lacking in the politicians clogging our ears with their rearward view of the world.
“Technology has come along and created an opportunity,” Devine says of how Hailo has helped reinvigorate the cab market across the UK.
Enabling organisations such as Hailo to disrupt a marketplace is the change in the technology and vendor landscape in recent years.
“At Betfair, we ran our own data centre with one of the hottest Oracle databases in the world, now software is eating the world. Why would you run a data centre?”
“I used to run teams of network and infrastructure engineers, now it’s all software and DevOps,” he says of his product-oriented team. Hailo uses open source, the Google XML equivalent, Cassandra database management and hosting from fellow disruptors Amazon Web Services (AWS).
“AWS has its advantages and disadvantages, but the variable cost model is very powerful. You do cede some control to AWS, such as when they suffered a security issue and rebooted every virtual server with very little notice. But Google is coming up very, very fast, which is great as competition is good and it is the model we will all use,” he says.
While some CIOs may see Devine’s model as risky or be uncomfortable with the control he has ‘ceded’, he sees it as essential for the role as it enables him and his team to focus on delivering a service to customers.
“The pace of business is so high, last year is legacy for us, Hailo is only three years old and we have replatformed the business. With the expectations of technology and IT going up all the time, the way we run IT has to evolve,” he says.
Having worked for pure online players and with print organisations being killed by the internet – Devine was CTO of Yell, formerly the Yellow Pages from 2009 to 2011 – he’s seen the world from startup to established and challenged player. With various surveys and industry watchers claiming CIOs budgets are on the increase, especially for innovation, what does he think of the strategy of setting up labs?
“There’s no easy answer to the problems if you have a large and slow management culture, so you can’t just stick some innovation on to the side,” he says of the culture change organisations face. “It’s a people challenge, I have run labs in the past and for me the jury is out. We are all being driven by revenue and to innovate is risky,” he says. The time and risk profile within the reward curve for organisations is hard to see, especially in the current economy he says.
Hailo finds itself in the halcyon days of a Greenfield business and can see streets of opportunity ahead of it rather than looking in the rear mirror of protectionism.
“Destination me, it’s all about bringing things to me, so that you become the destination. So we like to think of little hassles and iron them out for people. Already you can pay by Hailo,” Devine says, describing the business as being “place and context aware service”.
“GPS is the game changer in this world as every one of us has the computing power on them and it makes your life easier and cheaper.” Devine says the Hailo app logs its GPS position, telling customers how far away the cab is, but also creating data sets of just how bad road congestion is.
“We are doing heat maps and turn-by-turn navigation with real-time ETAs, a real time based on traffic velocity in your area,” he says. Outside, the Strand is once again grinding to a standstill.
Just as the mobile telecoms firms are doing, Hailo is a very real part of the Internet of Things, cabs and passengers operating the app from within a TX4 cab, be it black or Hailo yellow, and creating data sets that could be used for a wider set of purposes.
Working in an organisation with just 100 FTEs for this CTO is an example of moving with the times to exactly the sort of organisation that will thrive in the future. “I had a bit of an epiphany with a FTSE 250 company, realising I’m not good at it. I like change and I like to feel I’ve had an impact on that company at every degree. So I’m good at the middle, the growth, I just took too long to realise that,” he says with a smile. “I love the challenge of growing and expanding and delivering new services in new ways.”