There were gasps of disbelief from taxi drivers using its app when GoCatch last month announced it was launching are a ‘ride-share’ service in Sydney called GoCar. Social media ran hot with messages of outrage, especially after it was revealed that the company was pushing its taxi consumers to book a GoCar instead of a taxi by spruiking it would be up to 30% cheaper. “Backstabbing bastards!” one irate driver told me on the phone, “we built their f***** business!”
My first reaction when GoCatch co-founder and CEO, Ned Moorfield told me about GoCar the day before he went public was much the same as the drivers’ on social media: utter disbelief and moral outrage. That hasn’t changed, but …….
by Peer Lindholdt
Once the NSW Government opened the floodgates to ‘ridesharing’ it was inevitable that other app booking services would jump on the bandwagon. Which one would be the first and when? That was the million-dollar question. One thing was for sure, Uber would not, and nor should it, be allowed to retain its UberX monopoly.
Other foreign ridesharing apps like Lyft (USA) have been sniffing around in Australia and so have taxi apps like Hailo (UK), but they soon realised the market here was too small and already saturated by Ingogo, goCatch, Uber and a raft of wannabes. There are more cabs in New York, London and most big Asian cities than in all of Australia. We are small fry in the scheme of things. However, we are attractive to multinationals like Uber because we are the only western country close to Asia, we speak English and our politicians, state and federal, are like groupies just waiting to get screwed by ‘pop stars’ to show to the world how ‘with it’ we are. And to be ‘with it’ in Malcolm’s new Australia you have to embrace a con trick, misleadingly called ‘the sharing economy’. Not only is it fabulous way to avoid paying tax and make a mockery of government legislation, it is also a novel way of reintroducing sharecropping into the 21st century. And no one does that smarter and better than Uber.
That the Baird Government in NSW is the first state government to legalize UberX (the ACT is not a state) aka ‘ridesharing’ should come as no surprise. Despite his boyish charm and demeanour, Mike Baird is flint hard and as far right as a politician can get. Like father like son. Nor should it be a surprise that a start-up like GoCatch would attempt to take on Uber in the ‘ridesharing’ space once it was legalised. Somebody had to, and first in first served. The problem with GoCatch’s launch of GoCar is the way they went about it.
GoCatch claims 35,000 taxi drivers use its app. Let’s assume that is in fact true - that means their business was built on the back of those cabbies. Like Ingogo, GoCatch was launched in 2011 exclusively as a taxi app. Drivers signed up to both in droves because the concept was appealing on so many levels, but mainly because using a driver app meant more fares and less ‘no jobs’.
When Uber launched UberX in 2014 and hire car drivers were spitting chips, I even suggested to both GoCatch and Ingogo that they add hire cars to their apps. Both said they were firmly committed only to taxi drivers.
The passengers who downloaded either app did so because they were regular taxi users and found their system more reliable and convenient than booking through a network or hailing in the street. The fact that they and their booked driver could communicate with each other instantly was a huge selling point. Then in April 2014 came UberX offering the same service as the taxi apps but at a 30% discount and a slick marketing and lobbying campaign with $50 free rides on signup, a $500 gift to drivers joining, poster on loo doors in hip pubs and lavish free dinners for selected media types, pollies and lobbyists, with free UberX or limo rides to and from the venues. That UberX was operating illegally appeared to be totally irrelevant. Even consumer group Choice spruiked the service as being cheaper and more reliable than taxis without explaining why. Maybe it will spruik online retailers who sell elicit prescription drugs as well for being cheaper and easier to get for consumers.
Despite being illegal, by December 2015 Uber Australia Pty Ltd made the unsubstantiated claim that it had reached 20,000 UberX drivers and had a million Aussies using their service. On 18 December ‘ridesharing’ became legal in NSW and the floodgate was opened full blast. It was only a matter of time before someone else would develop the algorithms needed for calculating and charging fares similar to Uber’s – seamless, no EFTPOS, no PIN, no fiddling with money, cards or keypads. GoCatch is simply our first Uber copycat and won’t be the last. Business is business and like Malcolm Turnbull says, we all have to be agile, innovative and creative to get a place at the head of the table. In Malcolm’s new Australia there is no room for outdated concepts like fairness and business morality.
Ned Moorfield, co-founder and CEO of GoCatch is a Malcolm disciple. Well, he would be - with Alex Turnbull, Mal’s son, as one of his seed investors. Like father like son again. Young Turnbull (34) is a former Goldman Sachs executive who left in mid 2014 to found his own hedge fund, Keshik Capital, which is based in Singapore, presumably for tax purposes, like daddy’s blind trust in the tax haven of the Cayman Islands. Strewth, no wonder the ATO is leaving Uber alone!
But, I digress. I was talking about ‘fairness and business morals’, not something the taxi industry establishment is known for either, however GoCatch sank to a new low when it used its taxi app to promote its new ‘ridesharing’ service GoCar with a message to its taxi passengers when they opened the app that was worded as follows: “There is a GoCar available near you right now! Up to 30% cheaper than a taxi. Slide left for GoCar”. I call that morally corrupt and unethical. Cabbies I have spoken to used rather more colourful language.
I decided to use GoCatch to book a cab on 9 March and that was the message that cropped up on my iPhone. Did I book a GoCar? Of course I did! I’m an intrepid investigative journo. The app told me that the car was 3 minutes away. It took 11 minutes to arrive and once I had booked there was no map showing its progress. Not smart.
The driver phoned when he was at my front door. He was driving a 6-year-old Merc E-class. Told me he was really a hire car driver and the car was registered as a hire car. Not surprised. I have booked an UberX and been picked up by a taxi. Who cares anymore? As long as we get from A to B cheaply and efficiently does it matter if it is by tuk tuk?
My driver also claimed he was an ex-cabbie. That may count for him getting me from Rose Bay to Darlinghurst without using the GPS. The fare was $15. Would have been $20 in a taxi.
Since my maiden GoCar ride I have had a long chat with Ned Moorefield. Having read my March editorial and the headline for this article he wanted a right of reply to my allegation that his marketing technique was ‘morally corrupt’. I was happy to oblige.
Ned could see absolutely nothing wrong with telling GoCatch taxi passengers to book a ridesharing car instead of a cab. Not only did he consider that fair and reasonable, he even suggested that he was doing cabbies a favour.
“Lots of taxi drivers are recognising ride-sharing as a great alternative since they get flexible hours and can use their own cars,” he said. “When you drive a taxi, you have to pay a pay-in and add-on costs so that in the first few hours of driving, you’re just working to make money for someone else. Ride-sharing means you can be your own boss.”
I asked him how many cabbies had stopped using his app since he launched GoCar and his marketing ploy was exposed on social media. “I haven’t looked into that”, he said, “but it wouldn’t be many”. Not the feedback I get from the ranks.
Given that Uber has been criticized for tax avoidance and for not ensuring that its drivers have an ABN, I also asked Ned if GoCatch had made having an ABN a condition of using the GoCar app. Like Uber he claimed it’s not his business. “That’s the drivers’ own responsibility”.
In fact, everything with ridesharing is the drivers’ own responsibility. In Malcolm’s new Australia corporate responsibility is a thing of the past. Tech-head incubators and start-ups financed by government grants and venture capitalists like Alex Turnbull and James Packer are the new de rigueur. F*** the bloke mining the coal and driving the truck, car or train. They are all going to be replaced by robotics anyway.
Only time will tell whether GoCatch made a wise decision jumping on the ‘ride-share’ wagon and whether the old taxi brigade, soon to be rebirthed as ihail Pty Ltd, will join the fray now that the ACCC has let them loose.
When GoCatch announced its launch of GoCar I immediately fired off an email to Hamish Petrie, the founder of its competitor Ingogo, asking for a comment. It took him a while to reply, but last week I received this, and I quote:
“Ingogo is here to support taxi drivers. This just reinforces why drivers should join Ingogo. Uber did this before GoCatch, taking taxi drivers’ customers and migrating them. GoCatch has pivoted and rolled the dice on a new business model and effectively abandoned taxi drivers. Ingogo will launch a new driver app that will provide taxi drivers with a way to compete against rideshare under the pending regulations in NSW”.
Nothing stopping progress! I wonder if Mr Petrie is the only P2P app entrepreneur who has seen the light - that taxis with professional drivers are a necessity, while ‘ridesharing’ is no more than an unsustainable fad. The public will wake up soon enough, will the politicians?
I’ll ask only one question: What happens to UberX and GoCar if leasing a taxi plate drops to $5,000 a year and we continue to have the monopoly on hails and ranks with the cost of taking a taxi matching that of a minicab cum rideshare car? Have a guess.