‘ihail’ – an Uber clone or what?

The taxi industry mafia’s long awaited app ‘ihail’, its brand new ‘state of the art’ weapon against Uber, according to its website and long forgotten press releases, was to be launched in June, yet it’s still missing in action. Why the delay? Is it the Uber-slayer it claims to be? Do drivers and operators have to sign up? Should you? So many questions, so few answers. Well, here are a few hints.

by Tim Hoi

Currently, if you drive a taxi, you get bookings directly from your network on your MTData terminal and you might also get them from one or more independent apps such as ingogo, Uber (Sydney only) and goCatch on your smartphone. Soon you may have the option to get them through ihail, the booking app developed by MTData for a consortium of the five taxi companies dominating the Australian taxi market. To understand just how powerful this alliance is it is worthwhile knowing who the founding shareholders are:

  • Yellow Cabs (Qld) Pty Ltd – operating in Queensland and Tasmania
  • Silver Top Taxi Service Ltd – operating in Sydney and Melbourne
  • Black and White Cabs Pty Ltd – operating in Brisbane, Perth, Redcliffe and Toowoomba
  • Suburban Taxis – operating in Adelaide and
  • Cabcharge Australia Ltd – as well as providing taxi payment processing terminals to around 95 per cent of taxis in Australia, it also owns taxi networks in Sydney, Melbourne, Adelaide and Newcastle.

Others are the NSW Taxi Council, MTData and a taxi company in both the UK and the US.

The board of directors consists of Andrew Skelton (CEO of Cabcharge), Neill Ford (former Deputy Chairman of Cabcharge and super-boss of Yellow Cabs (Qld)) and Matthew Bellizia (CEO of MTData). Strangely the country’s second biggest taxi company, Silver Top, isn’t represented on the board.

This consortium, cartel (or mafia, as some of us call it) launched a new company, ihail Pty Ltd, which in 2015 applied to the ACCC for authorisation to operate the ihail app. Unfortunately for the venture partners the regulator had some misgivings about their proposed methods of operation. It rejected the application, issued an interim report documenting its concerns and told the company to amend its application accordingly. It did, but only partly, yet was granted a 3-year conditional authorisation in March 2016 upon which it immediately announced it would launch the app in June backed by a major national advertising campaign. June came and went and so did July and still no ‘ihail’. Passengers can however register their interest on its website. Oh yes, it does have a website http://ihail.com.au which states the app will be available to passengers for download some time in August. We’ll see.

So why the delay? A reliable source has told OZ Cabbie that apart from a string of technical problems there is serious disagreement between the venture partners over the company’s direction. Should ihail be a dedicated taxi app or become the full ‘Uber’, offering every kind of P2P transport from taxis to ride-share to limos to food deliveries? Cabcharge seems to subscribe to the latter. It recently launched 13CABS Private Hire vehicles in Maitland (NSW) and Adelaide in direct competition with local taxis. In fact we have received a report that the NSW Taxi Council at a country meeting it held in February recommended that regional networks introduce ridesharing cars to their fleets as a tactic to beat Uber to the punch. Sounds like the peak body of the taxi industry plans to become the peak body of the P2P industry.

The Maitland saga

Maitland is a small town of around 65,000 people located 35 km from Newcastle. Its small local taxi co-op, Maitland Taxis, has 35 cabs. Earlier this year Cabcharge, which owns Newcastle Cabs operating under the 13CABS brand, put pressure on Maitland Taxis to join 13CABS, but according the co-op’s chairman Jamie Furner his members declined. Cabcharge’s response, he said, was to launch three UberX type cars in Maitland. They look like taxi with white top lights and all, but have the words ‘Private Hire’ and 13CABS printed on their sides. The feud is ongoing and Maitland Taxis has filed a complaint with the NSW Department of Transport. Unfortunately for the small co-op, under the new P2P Transport Act 2016, passed by Parliament in June, there is no longer anything stopping anyone from providing a private hire car booking service anywhere in NSW, including in Maitland, provided they have the required accreditations and insurance. No doubt Cabcharge has made sure they do. The question is whether its intention is to make private hire available on ihail once its taxi business is established? goCatch did in NSW in February soon after ridesharing became legal. As a consequence thousands of cabbies deleted its app in protest. It was reported this month in the Financial Review that goCatch was on the brink of bankruptcy and needed an injection of $3 million in capital to stay in business. Maybe stabbing its taxi drivers in the back wasn’t such a bright idea.

No direct debit, no ihail

In case you don’t know, the only payment option with Uber is through its app. Fares are automatically debited to the passenger’s bank account and then laundered through Uber’s overseas bank before the driver’s share is transferred to his personal account. No fiddling for cash or cards, no PINs. Absolutely brilliant! So brilliant in fact that ihail wanted to copy it. Unfortunately the ACCC said “no”, insisting that ihail bookings must also be payable by card and cash. Customer’s choice.

That does beg the question: Will the ACCC apply the same rules to Uber and if not, why not? But, I digress.

To register with ihail and download the app pax will still have to provide their credit card and contact details and give the company access to their account. This enables ihail to deduct a booking fee of $1.75 and other charges like penalties for cancellations ($5.00) or ‘no jobs’ ($8.00) and ‘tips’ for priority pick-ups (amount up to the pax) regardless of how they choose to pay. For the record, ‘pax’ is airline jargon for passenger(s). Of course you’d welcome penalties for pax who cancel a booking after you have accepted it or for those who fail to show when you turn up at the pick-up address, and quite rightly you would expect these penalties to be paid in full to you as compensation for wasting your time. Well, think again!

ihail to skim the cream

If you drive for ingogo or goCatch the money you make is transferred to your nominated bank account. Not so with ihail! Unless you own the cab you drive, ihail doesn’t pay your takings into your account. It pays your money through Cabcharge to your operator via his network (M7) account. How and when he (or she) decides to pay you has nothing to do with ihail. You could wait a day, a week or however long your operator normally takes to pay your normal Cabcharge transactions.

Why not deposit straight into your account like its competitors do? Because ihail Pty Ltd is shit scared that the Fair Work Commission may consider that to be proof you are its employee, which would have serious consequences. Just ask Uber. In April it agreed to settle a $US100 million ($A133 million) class action by UberX drivers in the US.

As for the surcharges mentioned above, you may think they are all yours. WRONG!

The total $1.75 booking fee goes to ihail not you, and obviously you can’t add a booking fee like you can with a network booking. Your loss, ihail’s gain. Sure, its competitors also pocket the booking fee, but their shareholders don’t also charge $8,000 a year in network fees!

Say a taxi averages just 3 ihail jobs per shift and operates 600 shifts a year (300 day, 300 night), ihail will make $6,300 in booking fees alone. That is on top of the exorbitant network fee operators already pay its shareholders.

Until just two weeks ago ihail stated in its ‘Driver Policy’ that only 50% of the ‘priority tips’ and penalties would be paid to you via your operator. The other half would belong to the company. However, somebody must have convinced its executive that that level of greed and exploitation might be premature as it might discourage drivers from signing up. In the latest version it has reduced its cut substantially.

Of your ‘tips’ ihail will now take 10% not 50%. Of the penalties it’s now a flat $1.00, and on top Cabcharge ads its 5% service fee on everything. Ihail, thanks to the incompetence of the ACCC, has been given a licence to print money like Cabcharge did some 35 years ago. Ironically back then Cabcharge was largely owned by the very same shareholder-networks who now own ihail. The more things change ...

Whether these ‘refinements’ to its ‘Driver Policy’ will last is anybody’s guess. Like Uber, it can change its policy and terms and conditions anytime it likes. While Uber has become expert at this, ihail is still feeling its way. Currently its priority is to get as many drivers to sign on as possible, and one of the lures is this statement on the ihail Facebook page:

ihail is completely free for drivers, you never have to bid or pay for any ihail jobs. You keep 100% of your fares, always.

All bookings go through the MTD (MTData). There are no fees or charges for the driver or operator as part of ihail.

I don’t know what you call the 10% and $1 charges mentioned above, but to me they sound like fees or charges deducted on the money that were intended for the driver. And for how long they will lasts at these levels and what other money grabs ihail is planning one can only speculate. In its application to the ACCC, ihail stated it intended to charge its member-networks a 20c fee for each booking completed by their drivers, which no doubt they would have passed on to their operators who would have passed it on to their drivers. We have since learned that this idea has been abandoned following objections from one or more of the involved networks. That of course will have a huge impact on ihail’s bottom line and it’s not about to absorb that for long. Its most likely solution is to charge the 20c to the operators instead, who can then deduct it from the drivers’ pay. And, be in no doubt that as soon as ihail has signed up the critical mass of taxi drivers it needs to dominate the market, it will think up new ways to skin you just as Uber does to its drivers.

Also in it original application to the ACCC, ihail wanted the right to sign up all drivers affiliated with participating networks with or without their consent and to ban them from using any other app. Pressured by the regulator, that was changed to a voluntary ‘opt in’ and ‘opt out’ clause and the scrapping of the ‘other apps’ ban. That of course doesn’t prevent the networks or operators from coercing and intimidating their drivers to join. Just part of the old established industry culture.

According to ihail Pty Ltd CEO Nick Kings he has already signed 18,000 taxis up to the app (globally). In fact, according to his Linkedin profile he has singlehandedly founded and structured the business in both Australia and overseas, secured the ACCC clearance, raised the required capital to fund the formation and launch of the business and developed the brand identity and ‘go to market’ strategy for the global ihail brand. Amazing bloke.

Having given himself such a super rap one wonders what he has done so far about brand awareness, how his ‘go to market’ strategy is coming along and how many drivers have signed up to the app so far. Most people I have spoken to, drivers as well as pax, have never even heard of ihail. One would have thought that promotions urging drivers to register, and how, would have been broadcast incessantly on the MTData screens of every cab affiliated with one of the member-networks over the past couple of month, but apparently not. Oh yeah, it was for one day two weeks ago.

As stated above, as a driver, thanks to the ACCC, you have a choice whether to sign up to ihail or not. Your network can’t force you or automatically join you, however, operators belonging to any of the networks listed above have no choice. Their taxis will automatically be connected to ihail through their MTData terminal once ihail is ready for business. Contrary to Mr Kings’ claim, no Australian taxi operator has signed anything or agreed to anything in writing regarding ihail. In fact, no operator OZ Cabbie has spoken to has received any communication from his or her network about ihail.

As usual the way the taxi industry mafia operates is murky, secretive and ethically and morally questionable and the more it struggles to compete with Uber, the more it looks like Uber. •

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OZ Cabbie February 2017

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