Sometimes online technology startups just engage as bad ideas. Since my days as a tech blogger I have always been amazed at how even the most ludicrous startup notion can get investment to develop even the most backward idea. Cabforce, a new startup aimed at taking commissions from Europe cabbies, may be the poster child for whimsical travel startup investment potential.
TripIt co-founder Gregg Brockway, and his fellows, proved some time back that a niche product super successful. Apparently, Brockway’s investment in Cabforce is intended to perform a sort of “hat trick” bit of magic where European cab fares are concerned. Tnooz’s Linda Fox offers up the travel expert view on the matter of Cabby wonderfulness here, but this writer has to wonder if there is not a better way to develop an “ancillary revenue driver for the whole travel industry.”
With a motto like “Go Big or Go Home” – aiming that onto an industry inhabited by providers who can even now scarcely afford to pay attention (cabbies), can the reader understand my reaction to throwing money into this kind of development? Honestly, I am slapped into utter amazement. Commission based, okay. But the alleged $50 billion dollar market is irrelevant here, the grocery industry is worth trillions, but just ask Winn Dixie to give up more commissions! Wait, I am being metaphoric, but Cabforce should have thought a little bigger here.
One big hurdle for Cabforce to overcome, rying to milk pennies from cab drivers or companies that are already overwhelmed, underwater, playing middleman between a dying industry and a broke traveling constituency. Brockway is optimistic to the extreme in my view. Even with superb design, mobile out the yin yang, whatever Cabforce can manage to muster, milking blood out of turnips ain’t going to happen. And even if Cabforce does manage to take a grip, the ensuing revenue loss may well kill cabbies. No doubt the founders will point out increased cabbie revenues from pre-booking “guarantees” etc., and Cabforce may indeed help some company representatives snatch a ride.
However, taxi drivers (and most European vendors period) are already smacked every time they turn a corner with fees, regulations, and the ever decreasing number of people who can afford taxi (or other) fares. Factor in the taxi drivers are a special breed that do not take kindly to being bilked, and Cabforce has a bit of a business plan built for disaster. The Next Web reported last November on how drivers respond to even mobile apps set into their competitive equation. Just as the the Taxi Association of Germany is headed for their own collective app as a direct channel for fares, so too free apps backed by good marketing will shoot Cabforce in the foot.
Don’t get me wrong, I love the motivation behind any development that puts powerful digital connections in place in the B2C space, but going backwards 5 years to a place where Expedia ruled? Commissions, in my view, can only be gleaned where two circumstances prevail.
- The segment remitting commissions can afford them
- And, the business taking commissions adds significant value and ROI
We have our own views on ancillary revenue models for otherwise free travel services. Simply stated, Cabforce would have been a super idea before 2007. Right about now cabbies can fairly quickly squash any development aimed at out marketing them collectively. And this is what Cabforce will have to do to be successful, in my view. A business set against the provider, as Cabforce will have to be for some cabbies? This is a bit like un-ringing a bell.
MyTaxi, Kabbee, even Hailo are not taking the taxi booking space by storm. Getting down to the meat of this matter, any coalition of taxi drivers can create a market an app connecting them to fares fairly easily nowadays. I just don’t see how Cabforce is going to get traction enough to succeed, but I was wrong about TripIt to a degree too. Maybe Brockway and Co. can interject this service onto the business traveler niche TripIt already owns? Aha! Well, maybe Cabforce was not meant for you and I after all?
We’ll keep an eye peeled for you, but Cabforce so far looks to do other than “bark” at those Europe cabbie stands…