Legal disputes, government skepticism and the ire of taxi companies have plagued ride-hailing apps. But Karhoo is an app that incumbent taxi companies and limousine services may actually want to get behind.
Karhoo is a ride-booking app that allows users to compare taxi and private-hire car services from multiple companies, based on factors such as price, local knowledge, quality, punctuality or vehicle type.
In this already saturated space, Karhoo's unique selling point is that it works with the existing taxi operators rather than acting as a platform for individual for-hire drivers, which enables the app to add thousands of drivers at one go, and sets it apart from ride-hailing apps such as Uber.
"The really exciting thing is that we've been approached by cities all around the world to become the official city app of choice by empowering the incumbent operator," Daniel Ishag, founder and CEO of Karhoo, told CNBC.
"The incumbent taxi operators in nearly every city are embracing us," he added.
On Monday, Karhoo announced a partnership with Singapore's largest cab company, ComfortDelGro, which has more than 17,000 registered drivers.
The ride-hailing app is also in "very advanced talks at a logistical level right now with nearly every other provider" in Singapore, and the app is set to launch here early next year, Ishag said. With a focus on global cities, Karhoo has struck similar partnerships in London and New York, giving it access to over 250,000 vehicles. Some of the major deals include Addison Lee, Europe's largest private hire firm, and Comcab, the U.K.'s largest licensed minicab group.
Karhoo already raised $250 million in funding through private equity, including backing from Nick Gatfield, the former chairman and CEO of Sony Music Entertainment, and Eric Daniels, the former CEO of Lloyds Banking Group, who is also a Karhoo director.
But Karhoo also has a very large rival.
Uber's UberTAXI service "provides licensed taxi drivers the ability to also take advantage of Uber technology to do more rides and earn more money," Karun Arya, Uber spokesperson for South Asia and India, told CNBC.
GrabCar also has a GrabTaxi service offering drivers that are Singapore-licensed taxi drivers, and Hailo, a London-based ride-hailing app, entered a joint venture with Singapore's SMRT and Prime Taxis last year.
Ishag said what sets Karhoo apart from the existing services is that it streamlines different, licensed and accredited companies into one app.
"We expect customers get taxis around 25 percent faster than they do at the moment, and increase jobs for drivers by 50 percent," he said.
The Straits Times reported that the National Taxi Association had submitted to the Singapore Government a list of recommendations it believes private car hire services such as Uber and GrabCar should be forced to abide by. The association wants the government to look at issues including passengers' safety and unfair competition.
This comes after Singapore's transport minister Khaw Boon Wan announced in a blog post that Singapore taxi drivers had complained about a lack of regulation for private-car hire drivers and that "the playing field [should] be leveled."
Licensed taxi services may have reason to be worried. In a November report, CIMB analysts said that although there no concrete evidence ComfortDelGro's profitability was being harmed by ride-hailing apps like Uber, "significantly slower revenue growth in Q3 may be an early sign" of competition heating up.
The rise of the apps has been a threat to ComfortDelGro's market dominance, with the taxi company's management noticing a "much shorter queue of applicants for [ComfortDelGro's] taxis," CIMB noted.
"It may get harder for ComfortDelGro to grow its taxi revenue in the future because of Uber and Grab," said Roy Chen, analyst at CIMB Securities, to CNBC.
CIMB cut ComfortDelGro's 2016-2017 fiscal year taxi revenue growth forecasts from 6-7 percent to 2 percent, and downgraded its stock from add to hold.
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