Cabify

Cabify
Private
Industry Transportation network company
Founder Juan de Antonio
Areas served
Key people
  • Juan de Antonio (CEO)
Number of employees
 400 (2016)
Website www.cabify.com

Cabify is an international transportation network company. It provides premium vehicles for hire via its smartphone mobile app. Vehicles are driven by their owners, who must pass a rigorous selection process. Operating in Latin America, Spain, and Portugal, the company offers two services, one for corporate clients and another for private passengers.[1][2][3]

As one of the biggest transportation network companies in the Spanish- and Portuguese-speaking world. Cabify operates in Mexico, Chile, Colombia, Peru, Brazil, Panama, Ecuador, Portugal and Spain. In early 2016, Cabify reported over one million installations globally, of which the grand majority were in Latin America and the rest in Spain.[4][5]

History

Cabify was founded in May 2011 by Juan de Antonio, a Spanish entrepreneur, telecommunications engineer, and graduate of Stanford University.[6] De Antonio was motivated to create a transportation network company by his experiences with taxi drivers in Asia and Latin America, where he had to negotiate the price before the ride, had trouble getting the receipt, and had to urge drivers to stop the taximeter.[7][8]

De Antonio started discussing the idea with Adeyemi Ajao, one of the founders of Tuenti, and Brendan Wallace. They set up their first transportation network in Madrid and Barcelona, and their idea attracted investors from Silicon Valley. Juan de Antonio stayed as the CEO, while Ajao and Wallace became advisors as they continued leading their own startup.[9][1] Samuel Lown joined as the CTO in July with Michael Koper and Adrian Merino joining the team two months later.[9]

In February 2012, only 6 weeks after its official launch, Cabify had signed up 20,000 users and completed nearly 3,000 rides in Madrid alone.[10] In the next two years, more than 150 taxi drivers in Madrid would join the company.[11] In September 2012, the company raised a $4 million Series Seed investment round from Black Vine, Belgian fund Emerge, angel investors sourced via AngelList (including the Winklevoss twins), and a series of Latin American investors.[12][13]

A year after its foundation in Spain, Cabify started doing business in Latin America, opening subsidiaries in Mexico, Chile and Peru.[14][15][16][17] Within a few years, 80% of Cabify's income would come from the American continent.[8]

The company's second investment round came in April 2014. The $8 million investment was led by Seaya Ventures.[18] By then, Cabify had more than 100,000 downloads of its apps globally, more than 35,000 of which were in Spain.[13]

Initially, the service was called "Executive" and was intended for a niche group, with high-end vehicles that were slightly more expensive than taxis. In June 2013, the company launched Cabify Lite, with mid-range vehicles that were usually cheaper than taxis. By the end of 2015, Cabify Lite represented 85% of the company's offer.[19]

The company's biggest investor, Japanese e-commerce giant Rakuten, which is also a lead investor in taxi-app player Lyft, made its first investment in Cabify in October 2015, when it provided capital for a further push into Latin America. Cabify's revenues had risen to $40m, from $10m in 2014 and $1m in 2013.[20] The company had also partnered with Waze to complete its trips more quickly and improve driver and passenger safety.[21]

With the new investment, Cabify increased expansion in Mexico. The Hoy No Circula program in Mexico City generated a 200% increase in demand.[22] During that period, Cabify reduced its tariffs by 25% to motivate the inhabitants to use alternative means of transportation.[23] Also, it donated a part of its revenues to UNICEF.[24] At that time, the company operated in six Mexican cities: Mexico City, Monterrey, Querétaro, Puebla City, Guadalajara and Toluca.[25]

In April 2016, Rakuten invested $92 million more in Cabify. Rakuten’s investment was a part of a round of funding in which Cabify raised $120 million. The company announced it would start operating in Argentina (Buenos Aires and Rosario),[26] Brazil (Sao Paulo),[27] Costa Rica,[6] Portugal (Lisbon),[28] Bolivia, Ecuador, and Panama.[29] It also announced it would expand its current services to new cities, such as Valparaíso and Viña del Mar in Chile.[30]

When the company announced it would do business in Colombia, it was welcomed by the Association of Free Consumers.[31] Cabify started offering services to the corporate sector in Bogotá in 2015.[32] Cabify late opened in Cali in April 2016 and announced its expansion to Medellín and the Caribbean region, more precisely to the cities of Barranquilla and Cartagena. It planned to offer its services in Pereira, Manizales and Bucaramanga later in the year.[32]

The company operates in seven Spanish cities as of 2016 - Madrid, Barcelona, Valencia, Bilbao, Vitoria, La Coruña and Málaga - and on the island of Tenerife.[33] After the 2016 financing, Cabify was valued at around $320 million. It currently has 400 permanent employees, across engineering, operations, sales, marketing, logistics and customer service.[4][8]

Service

Cabify operates as the contact point between customers and carefully selected private drivers by means of its mobile app for Android and iPhone, as well as its web page. Users pay for the service via their credit card or PayPal account, with cash payments introduced in 2016. The payment system is protected by Symantec's Verisign security.[34]

The service has been conceived as a premium-quality transportation alternative.[1] It offers three core classes of vehicles: Executive, with vehicles such as Mercedes S-Class or Audi A8, Lite (e.g. Toyota Avensis), or Group (6 persons).[33][35] In addition to these core services, Cabify offers a number of other services depending on the city, including: Cabify Express, a service of immediate delivery via moto taxis, in Peru; Cabify Taxi, a service for accessing local taxi cabs, in Spain; Cabify City, a service of independent drivers, in Chile; Cabify Bike, a service where users can ride with their bikes in Chile, and Cabify Cash, a service where users pay with cash instead of credit cards, in Peru.[36][37][8]

Cabify was the first private service to offer a transportation option for disabled persons. The service was first introduced in partnership with Peugeot in Mexico, where 6.6% of the population had some kind of disability.[38] Since then, the service has been opened in Chile, Spain and Peru. Cabify's plans for the future include global expansion of Cabify Access, its service for the disabled.[8]

The company serves two client types: corporate and private passengers, with the former taking up 60% of Cabify's offer. Cabify claims corporate users are the focus of the company's service offering. The business-focused service, used for the transport of employees, includes big clients such as Google, Visa, Allianz, FCC, and Securitas Direct.[3][39] The company has extended its corporate relationships to secure commercial partnerships including LAN, the largest airline in Peru and Chile, Aeroméxico, the largest Mexican airline, and Visa credit cards.[40][41]

The company is trying to grow in a sound way by forging relationships with local businesses, hiring both traditional taxis and regular consumers as Cabify drivers, and placing heavy emphasis on repeat customers, for example by steering its cars in peak hours towards habitual users rather than those that offer the most lucrative one-off fare. Because of this approach, the company claims that it has no need to subsidize drivers or offer steep discounts to users, unlike many of its rivals.[12][20]

Mobile application

The app shows the location of drivers to the customer, calls the closest driver, directs the driver, and plays the role of intermediary for payments, taking a commission of around 20%. Once the ride is over, Cabify sends a summary to the customer's mobile phone, including information such as the distance, duration and cost of the ride. The customer can evaluate the ride and the driver.[42] Locations can be saved as favorites to be accessed more easily. The system has a waiting queue, where it keeps looking for a ride over a period indicated by the customer (from 5 to 30 minutes). The service can be reserved up to 30 days in advance.[14]

The service includes the possibility of real-time tracking between departure and arrival. If the signal is lost for more than sixty seconds or the route changes considerably, the passenger will receive a telephone call verifying their comfort and safety.[43] The app allows the customer to choose the type of vehicle (Executive, Lite or Group), and offers a wide range of free options, such as the driver speaking a foreign language,[33] the desired air-conditioning temperature, the driver opening the door or calling upon arrival, and the desired radio station.[5]

The Cabify app also integrates with Waze to provide drivers with the best route possible.[44]

Drivers

Cabify cars and drivers pass a rigorous selection and filtration process. All drivers must pass psychometric tests, tests for alcohol and drugs, and a city orientation test. They must show they have no criminal record or traffic violations.[2]

All drivers are required to wear professional attire..[39] They are expected to be polite and attend to the needs of the passenger which oftentimes includes additional services such as in-car reading materials and Cabify-branded water.[35] Drivers are required to take the fastest way to the destination. If they change the route without the passenger's approval, they can be penalized by Cabify.[34]

Legal position

Unlike some other competitors, Cabify tries to work with governments to find a way to operate legally.[20] The company has been successful thus far, operating legally in the countries where it is currently present.[45]

In the case of Spain, all the drivers work as "collaborators" for Cabify, and they do this under a commercial contract for the supply of services, either as part of a company or as freelance owners of a VTC vehicle fleet (Chauffeur Driven Vehicle).[46] They can be either the direct suppliers of the service or provide it through hired personnel under the Social Security's legislation. Cabify doesn't take care of the registration of self-employed workers. Instead, they need to be considered as such, before they begin to collaborate with the company. Cabify´s drivers don´t receive monthly or yearly fixed salaries from the company. Their income comes from the invoicing of journeys and the amount of services they have provided.[47][48]

Cabify's control system allows them to keep track of all payments and charges that come from them because journeys are not allowed to be paid in cash. This helps eliminate the informal economy and the precariousness currently present in the rest of urban transportation's segments.[49][50]

The taxi union of Santiago protested against Cabify and Uber, announcing a national strike in May 2016.[51] Several Chilean celebrities who use Cabify's services, including Cristián Sánchez and Renata Ruiz, supported the company by filming a video where they give their reasons for using Cabify.[52] After trying to find a legal solution with the Chilean government for over six months without success, Cabify launched Cabify City, which connects independent car owners with users on the Cabify app. Cabify City is its first unregulated service.[37]

Key differences

While it has been dubbed the "Uber of Europe"[10] and the "Spanish Uber",[7] Cabify shows differences when compared with its main competitor, especially regarding its pricing policy.

Cabify charges per kilometer of the optimal route. This means that it optimizes the distance between two points so the passenger is paying for the most direct route regardless of the actual route chosen by the driver. Uber, in comparison, charges according to minutes and kilometers spent inside the vehicles.[34]

Moreover, Cabify has fixed pricing, where the price per kilometer does not change depending on the time of the day. Uber, on the other hand, has dynamic prices, which change depending on peak hours, weather and local events.[26] Cabify described it as a socially motivated feature: "We are not something that the driver does in his free time. We are his main source of income. We don't think it should be something occasional, but a job that can sustain a family."[8]

A test drive performed by ABC established that Cabify was cheaper than both Uber and city taxi service for the same trip.[53]

Another key difference is Cabify offers its service via reservations and on-demand orders, while Uber offers only rides on demand.[34]

References

  1. 1 2 3 "Un fundador de Tuenti se pasa a los coches de lujo bajo demanda" (in Spanish). Cinco Días. 23 December 2011. Retrieved 11 May 2016.
  2. 1 2 Jairo Straccia, Rosalia Draletti (23 April 2016). "En medio de la pelea por Uber, en mayo desembarcaría Cabify" (in Spanish). Perfil. Retrieved 10 May 2016.
  3. 1 2 Jesús Martínez (16 February 2016). "Cabify se rearma con nuevos fondos para competir con Uber" (in Spanish). El Español. Retrieved 11 May 2016.
  4. 1 2 Yoko Kubota (20 April 2016). "Rakuten Raises Investment in Latin America Ride-Hailing App Cabify". The Wall Street Journal. Retrieved 7 May 2016.
  5. 1 2 Ara Rodríguez (21 January 2014). "Cabify se renueva y apunta a Latinoamérica" (in Spanish). Hipertextual. Retrieved 11 May 2016.
  6. 1 2 Manuel Avendaño (9 May 2016). "Cabify, la competencia de Uber, se prepara para operar en Costa Rica" (in Spanish). La Nación. Retrieved 10 May 2016.
  7. 1 2 María Gómez Silva (18 September 2015). "Cabify, el «Uber español», crece dentro y fuera de españa" (in Spanish). Finanzas. Retrieved 11 May 2016.
  8. 1 2 3 4 5 6 Rosa Jiménez Cano (3 May 2016). "Cabify quiere plantar cara a Uber y crecer en América Latina" (in Spanish). El Pais. Retrieved 10 May 2016.
  9. 1 2 Javier González (3 March 2012). "Coches de lujo a golpe de móvil" (in Spanish). El Mundo. Retrieved 11 May 2016.
  10. 1 2 Robin Wauters (14 February 2012). "Cabify, the 'Uber of Europe', plots expansion to 15 European cities". TechCrunch. Retrieved 11 May 2016.
  11. ↑ "Cabify, nuevo sistema alternativo de transporte en Madrid" (in Spanish). Motor. 8 July 2014. Retrieved 11 May 2016.
  12. 1 2 Ingrid Lunden (20 April 2016). "Cabify raises $120m at a $320m valuation led by Rakuten to take on Uber in Latin America". Tech Crunch. Retrieved 7 May 2016.
  13. 1 2 Natasha Lomas (1 April 2014). "Uber Competitor Cabify Closes $8M Series A To Accelerate In LatAm". TechCrunch. Retrieved 11 May 2016.
  14. 1 2 Carlos Morales (February 2016). "Cabify renueva su app y anuncia expansión en México" (in Spanish). Forbes. Retrieved 11 May 2016.
  15. ↑ Carlos Salazar (26 June 2013). "Emprendedor español de los taxis de lujo comparte las claves del éxito" (in Spanish). La Nación. Retrieved 10 May 2016.
  16. ↑ "¿Usas taxis en Lima? La app Cabify te interesará" (in Spanish). Terra. 15 March 2013. Retrieved 11 May 2016.
  17. ↑ "San Valentín: Cabify anuncia servicios de taxis de lujo con descuento" (in Spanish). La Republica. 14 February 2013. Retrieved 11 May 2016.
  18. ↑ C. Otto (22 April 2016). "El 'fenómeno Beatriz González': la hija del presidente del BBVA triunfa con las 'startups'" (in Spanish). El Confidencial. Retrieved 10 May 2016.
  19. ↑ Rodolfo de Juana (9 December 2015). "Cabify: "Somos de las empresas más inspeccionadas de España"" (in Spanish). Muy Pymes. Retrieved 11 May 2016.
  20. 1 2 3 Tobias Buck, Leslie Hook (12 October 2015). "Spanish taxi-booking app Cabify secures funding from Rakuten". Financial Times. Retrieved 11 May 2016.
  21. ↑ Sarah Perez (26 January 2016). "Lyft, Cabify, 99Taxis & Others To Integrate Waze's Routing Software In Their Own Apps". TechCrunch. Retrieved 11 May 2016.
  22. ↑ Jair López (8 May 2016). "Doble Hoy No Circula dispara uso de Cabify e Easy Taxi" (in Spanish). El Financiero. Retrieved 10 May 2016.
  23. ↑ "Cabify baja su tarifa mínima en México" (in Spanish). ebiz Latam. 11 April 2016. Archived from the original on 11 April 2016. Retrieved 11 May 2016.
  24. ↑ "Cabify recaudará dinero para el Fondo de las Naciones Unidas para la Infancia" (in Spanish). Códice Informativo. 26 April 2016. Retrieved 11 May 2016.
  25. ↑ Daniel Higa (25 April 2016). "Cabify busca ser una de las mejores plataformas de transporte en Latinoamérica" (in Spanish). Bolsamania. Retrieved 10 May 2016.
  26. 1 2 Guillermo Tomoyose (15 April 2016). "Después de Uber llega Cabify, otro servicio para pedir viajes con chofer" (in Spanish). La Nacion. Retrieved 10 May 2016.
  27. ↑ Luiz Mazetto (27 April 2016). "Rival do Uber, espanhola Cabify chega ao Brasil aberta aos táxis" (in Portuguese). IDG. Retrieved 10 May 2016.
  28. ↑ Sónia Peres Pinto (8 May 2016). "Conheça Cabify, o novo concorrente da Uber" (in Portuguese). Jornal i. Retrieved 10 May 2016.
  29. ↑ "Empresa española de transporte Cabify se expandirá a Panamá" (in Spanish). El Siglo. 11 May 2016. Retrieved 30 May 2016.
  30. ↑ Oriana Fernández G. (16 April 2016). "Cabify se expande a la V Región y hace exigencias a choferes" (in Spanish). La Tercera. Retrieved 10 May 2016.
  31. ↑ "La asociación de consumidores libres ve con buenos ojos el ingreso del servicio Cabify" (in Spanish). Columbia. 10 May 2016. Retrieved 11 May 2016.
  32. 1 2 "Cabify llegará a Medellín y la Costa Caribe" (in Spanish). El Espectador. 27 April 2016. Retrieved 10 May 2016.
  33. 1 2 3 Unai Mezcua (8 May 2016). "Cabify, el "taxi VIP" español en el que se quiere inspirar Uber" (in Spanish). ABC. Retrieved 10 May 2016.
  34. 1 2 3 4 Marisol Ramirez (27 March 2013). "Taxi seguro en tu celular" (in Spanish). El Universal. Retrieved 11 May 2016.
  35. 1 2 R.N. (22 April 2016). "J'ai testé Cabify, qui d'ailleurs vient de lever 100 millions." (in French). Le Courrier d'Espagne. Retrieved 10 May 2016.
  36. ↑ Eduardo Arcos (5 June 2014). "Cabify anuncia "Cabify Taxi" para ampliar su oferta de transporte vía app" (in Spanish). Hipertextual. Retrieved 31 May 2016.
  37. 1 2 El Mercurio (14 May 2016). "Cabify contraataca y lanza servicio con tarifas hasta 40% más baratas" (in Spanish). Economia y negocios. Retrieved 31 May 2016.
  38. ↑ "Cabify lanza servicio enfocado para discapacitados" (in Spanish). Forbes. 24 September 2015. Retrieved 11 May 2016.
  39. 1 2 Laurence Dollimore (8 May 2016). "Spanish ride-sharing app receives €106m in funding". Olive Press. Retrieved 7 May 2016.
  40. ↑ "Cabify y Aeromexico crean alianza" (in Spanish). El Universal. 6 May 2016. Retrieved 10 May 2016.
  41. ↑ Yael Córdova (9 November 2015). "Cabify y Visa concretan alianza de movilidad gratuita" (in Spanish). El Economista. Retrieved 11 May 2016.
  42. ↑ "3 apps para pedir taxi desde tu móvil ¡Las probamos!" (in Spanish). Uno Cero. 28 May 2013. Retrieved 11 May 2016.
  43. ↑ "Estudio determina el comportamiento de los usuarios de taxis vía smartphones en Chile" (in Spanish). Tendencias. 26 March 2013. Retrieved 11 May 2016.
  44. ↑ Perez, Sarah (26 January 2016). "Lyft, Cabify, 99Taxis & Others To Integrate Waze's Routing Software In Their Own Apps". Tech Crunch. Retrieved 11 July 2016.
  45. ↑ "Cabify se diferencia de Uber" (in Spanish). ON24. 29 April 2016. Archived from the original on 3 May 2016. Retrieved 11 May 2016.
  46. ↑ Elena Arrieta (3 June 2014). ""¿Tu 'start up' podría ser global? Haz las maletas y vete a EEUU"" (in Spanish). Expansión. Retrieved 11 May 2016.
  47. ↑ Fernandez, Javier G. (28 July 2016). "Cabify prevé superar los 100 millones de euros de facturación en 2016" (in Spanish). Expansion. Retrieved 16 August 2016.
  48. ↑ Munoz, Ramon (20 April 2016). "Cabify consigue una inversión de 106 millones para su expansión" (in Spanish). Economia. Retrieved 16 August 2016.
  49. ↑ "Cabify insists 'we are not cabs' as startup fights to avoid ban in Spain". The Local. 5 November 2015. Retrieved 11 May 2016.
  50. ↑ Luca Costantini (27 November 2015). "Los tribunales rechazan cerrar la aplicación de alquiler de coches Cabify" (in Spanish). El Pais. Retrieved 10 May 2016.
  51. ↑ "Taxistas realizan nueva manifestación en Santiago contra Uber y Cabify" (in Spanish). 24 horas. 4 May 2016. Retrieved 10 May 2016.
  52. ↑ "Famosos participan de polémica campaña en apoyo a Cabify" (in Spanish). BioBio Chile. 12 April 2016. Retrieved 11 May 2016.
  53. ↑ G. Ginés, U. Mezcua, C. Manso (15 April 2016). "Probamos Uber, Cabify y Taxi: ¿Cuál es la forma más barata y eficaz para moverse por la ciudad?" (in Spanish). ABC. Retrieved 10 May 2016.

External links

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