A newcomer joins the ring — yet another app, a 10-month-old New York based startup Karhoo founded by British entrepreneur Daniel Ishag. It’s set on an ambitious attempt to enter the already saturated taxi booking app market. Still, they don’t come without credentials. Karhoo has so far raised $250 million and has plans to raise more than $1 billion in capital. The service will open in London, New York, and the only Asian destination: Singapore.
Daniel Ishag, a serial entrepreneur, said in an interview with the Financial Times, “[Uber] can’t subsidise prices forever; they have to be profitable, especially if they want to IPO. We can go in and we can level the playing field.” He believes that because Karhoo will be working with licensed taxi companies, they will be able to avoid the regulatory troubles that have affected Uber.
Karhoo Singapore Pte. Ltd. is a registered company as of 31 August 2015, and plans to launch its app in January next year. We’ve yet to hear about their prospective plans for Singapore, but the agenda across the countries they operate in is clear — to give Uber a run for their money.
It’s going to be an uphill battle for third-party taxi apps to compete with Uber, who has an stronghold on the private car/taxi alternative market all around the world. The corporation is said to be raising an additional $1 billion round of funding at a $60 to $70 billion valuation. UK group Hailo, on the other hand — despite raising $100 million — pulled out of North America last year because of the intense competition with Uber and other car/taxi booking apps, making it hard for them to run a profitable business. Aggressive pricing is, perhaps, the main reason no one has yet managed to build a global competitor to Uber using licensed taxis.
And the taxi app landscape in Singapore is looking shaky now. A recent survey showed that 11% wanted third-party car and taxi booking apps to be banned completely. The government is also looking into legislating and regulating third-party taxi apps such as Uber and GrabTaxi, and we simply don’t know where and how Karhoo might fit in this equation.