Are Uber, Hailo, and Other Taxi Apps Going After a Big Enough Market?
Photo Credit: A taxi painted in Hailo colors in London. Flickr / jonrussell
Skift Take
Plenty has been written about the e-hail companies' battles with regulators and new economy versus old. But their biggest challenge will be running what's basically a Ticketmaster for rides when the barrier for entry -- and costs, too -- are lower for existing players.
Uber, Hailo, and their copycats-slash-competitors are forging ahead in an attempt to carve out as big a space possible for themselves in the taxi and limousine business industry.
Collectively the two major car-hailing apps have raised over $100 million ($50m at Hailo; $57m at Uber). Last week, Uber confirmed it was seeking "hundreds of millions" to fuel expansion at a $3.5 billion valuation.
All of this is in an effort to get a piece out of what's estimated by experts to be a slow-growth industry with $10.9 billion in annual revenues and $1.4 billion in profit in the U.S, according to according to an IBISWorld report.
But the pie is actually smaller than it looks. And to make their piece bigger, Uber and its peers will need to get the consumer to pay more, or find a way to siphon off profits from drivers.
That's not likely to be very popular with anyone.
What the Industry Looks Like
The industry is divided between taxis, which are largely patronized via consumers us
