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Start-up creates New York's newest social network—for cabs

These days, there seems to be a social network for everything, aside from Facebook, LinkedIn and Twitter, there are social networks out there specifically created for mothers, the ultraexclusive and even the bar scene.

One company, Hailo, is building a social network in an equally unlikely place—the front seat of a taxi cab.

Hailo, which is one of several companies that provide "e-hailing" services for taxis, is leveraging this core offering to create a way for drivers to connect with each other, share information and make their day more social.

"E-hail" apps give users the ability to summon drivers to their location with a few taps on a smartphone, instead of relying more traditional street hails. Passengers are also able to pay for their ride through these services, anticipate wait times and even review drivers.

Among the most popular e-hail apps available are Uber, Hailo and Taxi Magic, which place themselves at different and sometimes overlapping price points, levels of service and geographic areas.

(Related: Taxi apps: Changing the world while New York waits)

But for London-based Hailo, e-hails are only one side of the equation, and the company is looking to differentiate itself in the mind of drivers by creating a robust social network.

Aside from offering the financial incentives of potentially increased business through higher efficiency, the community that Hailo is creating gives drivers—the implicit key to the taxi market—another reason to choose the service.

CNBC's "The Starters" spoke with Hailo CEO Jay Bregman about the company's strategy and how it's trying to change the life of anyone hailing—or driving—a taxi cab.

Hailo CEO Jay Bregman poses with his employees in a taxi cab outside the company's New York headquarters.
Source: Hailo
Hailo CEO Jay Bregman poses with his employees in a taxi cab outside the company's New York headquarters.

Bregman describes his strategy as one that starts with taxi drivers, instead of passengers. "By taking care of the guy in the front seat, that's the best way to take care of the guy in the back seat," he explained. "By taking care of drivers, we create the best experience for passengers."

Once signed up, drivers in New York are given access to the Hailo Training Center in Manhattan, where they not only receive instruction on using the app, but are also are encouraged to use the facility as a home base, contributing to the "community" that Hailo looks to create.

The center not only offers coffee, restrooms and a place to relax, but other amenities like Internet access and a special area for prayer, since many New York cab drivers practice Islam and pray several times per day.

The Hailo app launched in New York—a metropolis with more than 13,000 cabs— in 2013, and is currently available in 12 cities worldwide.

Bregman said that cab drivers are "early adopters" of smartphone apps, since they are mobile by definition and their smartphone is often their primary computer. "[Drivers] need access to information to connect with one another, to use mapping technology," he explained. "Hailo is something that taps into that and brings that all together."

(More from "The Starters": This start-up is trying to make office coffee cool again)

Melissa Plaut, a former driver who now works for Hailo full time helping drivers transition to the service, said that that the technology helps drivers make more money, but it's not the only motivation.

"There is a definite cap to the amount of money any driver can make in a single 12-hour shift," she said. "It's a race against the clock which is why we 'drive crazy.' Really, we're just driving in an efficient way to make the most amount of money."

Anecdotally, Plaut says that some drivers use the app primarily as a way to connect with other drivers while on the job, instead of the e-hail function.

With the app, drivers are able to communicate about passenger hot spots, relay traffic information or even see where their on-duty friends are located on a map of their city. She said that this functionality "is really a cab driver's dream come true."

Hailo currently has generated upward of $50 million in venture capital funding to date, with the likes of billionaire Richard Branson and Fred Wilson's Union Square Ventures betting on the company's success.

Bregman said that Hailo plans to significantly expand its operations in Washington, Barcelona, Tokyo and Osaka, Japan, with ultimate hopes of being globally ubiquitous.

"Five years from now this technology will be widespread throughout the world in every city," Bregman predicted. "Hailo will be in every city in the world from Breckenridge, Colo., where my mom lives—which probably has about 10 or 15 cabs—to New York, London, Tokyo and everywhere else."

—By CNBC's Deborah Findling, Uptin Saiidi and Paul Toscano

"The Starters" is a CNBC Web series that brings you behind the scenes of local start-ups. No matter where you live, there is a company in your city trying to change your life. Follow us on Twitter @StartersCNBC.

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