5 minute read
Seven years of bad timing, timing, bad luck and a few bad calls
The closure of Karhoo after seven years had a definite ring of déjà vu. After all, it is the second time the business has collapsed, after the first version of the company called in the receivers in 2016.
Karhoo was originally launched in London as a taxi comparison site in 2016. It allowed users to see available cars from different operators and click on the one they want to book, based on price, pick-up time or type of car.
In 2016 Karhoo founder, tech entrepreneur Daniel Ishag, told Professional Driver: “Over the past 15 years, over a trillion dollars has been spent educating the consumer to use comparison websites. We’re just bringing that concept to the ground transportation sector.”
Operators, including Addison Lee, ComCab, Keen Group, GLH, iRide and eConnect Cars signed up, and the service was launched with a marketing blitz including tube ads and massive screen advertising at Waterloo station. Further launches followed in New York and Singapore.
But within four months, the company had fallen into receivership amid allegations of profligacy by the management, especially Ishag himself. Karhoo v1.0 had apparently managed to burn through $250 million in investors’ start-up funds, though Ishag claimed only $52m had been spent on marketing. The rest went on expensive offices and even a New York flat for Ishag to use. Karhoo’s 120 employees lost their jobs.
In a statement that is echoed in this week’s news, Karhoo posted a message on its website in November 2016: “It is with much regret that we have to announce that Karhoo has had to close its service and is now looking at the next steps for the business.”
John Daily Jr, Karhoo’s head of product throughout its existence, said: “The ambition of Karhoo 1 was great, but the timing and lack of funding prevented us from fully exploring its potential. We were also competing against amazing apps like Uber, Gett, Didi, Grab, Lyft, and others that were just pushing the consumer product faster than we could.”
Karhoo was rescued from administration in January 2017 by a company called Flit Technologies, run by Boris Pilichowski and Nicolas Andine, two former employees. RCI International, a division of Renault, immediately took a majority stake in Flit, and Karhoo became part of Mobilize, Renault’s mobility division.
In a statement immediately after the RCI rescue, Pilichowski and Andine said: “There is a need in ground transportation for someone to aggregate all the independents and allow them to compete, and we are determined to make sure Karhoo fills that need. Karhoo was amazingly successful in ferrying hundreds of thousands of people around the world but lacked a corporate backer, but with RCI Bank and Services, we now have that.”
Gianluca De Ficchy, CEO of RCI Bank and Services, said: “We have created an original ecosystem bringing together taxi and ride-hailing companies and the customers or employees of large organizations. Karhoo is an integral part of our strategy to develop new automobility services with a view to becoming a benchmark player in this market.”
Under Mobilize, Karhoo changed focus from price comparison app to being a B2B mobility provider, calling itself a “a white-label mobility solutions provider” forming partnerships with rail operators, travel operators, airlines and others across Europe, and offering work to major car fleets that signed up to the service.
In April 2019, Karhoo won the prestigious European Startup Gold Prize for mobility, after it was judged judged to be the breakthrough innovation with the most potential to shape the mobility landscape in Europe.
Karhoo was still doing deals just a few weeks ago. As recently as March 2024, Karhoo added Sixt Ride to its platform. Sixt Ride provides premium transfer and chauffeur services in more than 600 destinations.
“By integrating SIXT ride, we harness our collective capabilities to establish a Mobility-as-a-Service ecosystem, revolutionizing the manner in which individuals access and employ transportation services,” Terry Coates Karhoo’s CEO, said at the time.
Last November Karhoo also integrated FreeNow’s ride-hailing services on to its European platform, putting more than 200,000 vehicles in 150 cities at the disposal of leading travel apps and websites.
John Daily Jr said integrating with ride-hailing operations was a major shift for Karhoo – but it came too late. “For a large portion of Karhoo’s history, we viewed the ride hailers as our primary competitors. It was a long time coming, but the likes of Uber, FreeNow and others began to resemble the challenges we were already solving for the more traditional transportation industries, but at a much larger scale. This was the missing piece and formed a pivot in strategy not taken at Karhoo since reforming under Renault. By viewing ride hailers as potential partners, with Karhoo technology, we could showcase fleets at their best in their local market and enable them tap into that demand on their terms,” he said.
Details of the Karhoo administrator have not been published, and it seems that no further attempt will be made to sell it as a going concern. This time, the closure looks permanent.
Daily Jr concedes that Karhoo’s story has come to an end. “I still believe there is a massive need that has not been addressed by anything on the market today. Perhaps the timing is just a bit off, or the solution takes a more radical form in the future as the market consolidates. But if there is anything Karhoo has proven, there are fleets and drivers looking for a better way, the tech can be built and there are individuals out here that are passionate enough to keep at it.”
