Why It May Not Have Worked Out For EasyTaxi Ghana.
I remember when Easy Taxi launched in Ghana. I was still head of products development at Ringier. We were having our fair share of competition already and having yet another Rocket Internet backed venture launch in Ghana made me want to shoot myself in the foot!
But why Easy Taxi? Before they came, I did a bit of research in this kind of service and didn't find any motivation for building one. What kind of knowledge did Easy Taxi acquire that I missed? I told myself "ah well, they have enough money to splash around and wait for adoption to increase and become profitable". And they did! Offering exclusive rides to some events, partnerships here and there, adverts on TV, radio, online, etc ... It was all guns out, let's make it work no matter what.
Then all of a sudden, nothing! I was going on about my normal day when my girlfriend pinged me on telegram and said: "EasyTaxi has shut down!". "Really?" I replied. "Yes, their twitter account @EasyTaxiGH doesn't even exist anymore!" She replied back.
Wow! Very interesting because, this is a Rocket Internet backed venture! They have loads of money and it's working quite well in other countries. They could have sustained it for a while if they wanted but they closed shop and left like a thief in the dark without even saying goodbye to some of their loyal fans.
So why did they leave? Everyone was confused. The topic even became a hot argument at #TechRepublicGh and I was reading the tweets thinking "hmmm maybe I need to dig deeper".
As to why Easy Taxi decided to close their operations in Ghana, we will never know the real reason why but after doing some research in the countries where Easy Taxi does work, here's what I found out.
Great transportation and address/location system
See, EasyTaxi is very popular in emerging markets but one thing all these markets share in common? A great transportation system! Trains, Buses, Taxis with good roads and minimal traffic. Also all these emerging markets somehow actually have great addressing systems. Well named streets, buildings and houses with numbers, etc ... So then, using EasyTaxi becomes a convenience for those times you don't have the time to wait for a bus. Or you are going out at night and getting back home will be impossible with a bus. And the average wait time from when a taxi accepts your request to actually getting 3 to 5 minutes max. Compare that to Ghana. You are thinking of calling a taxi but taxis usually roam on the main streets. Very few areas have tarred roads which means the closest taxi to almost anyone's location is a main road away. Let's take even Nyaniba Estates. You may call a taxi and it will be in Osu. But the traffic alone will make him spend 15 minutes to get to your place. Why won't you just walk to the roadside where there's no traffic and pick your cab? They are roaming around town all the time! Or you request for a cab and because we have no serious addressing system it becomes a "Hello madam, please where are you? I don't know that place oh!" ... Sighs, this is supposed to be a service that makes your life easier, not give you headaches!
Taxis charge per distance using a meter, no negotiations whatsoever
The other thing all the countries where EasyTaxi works really well have in common is this: Taxis do not charge whatever fee they like. They all have a meter and in some of these countries, if you get overcharged, you can sue because it's illegal. So for the user, it doesn't make any difference whether he's using an EasyTaxi cab or a regular cab. He's getting charged whatever he's used to. But in Ghana? I'm not sure why the assumption was that "If I call a taxi with my phone then I have more money than the regular person" so they charge you more for that! Like seriously? This I believe became a huge turn-off for most customers so unless Easy Taxi was doing one of their "grandiose" promos, nobody bothered to use them.
Owning a car is outrageously expensive and most people get around without one
Last thing: Owning a car in some of these emerging markets is really expensive. A lack of trade agreements with car-exporting countries means even a second hand car can cost 2 to 3 times the normal price. So if the transport system is good (no stinking troskis, no crazy traffic, etc ..) why would anyone feel the pressure to buy a car? So for these markets, Easy Taxi can expect massive growth for their services. But in Ghana, ask any young university graduate: "What is the first expense you will make when you start working?". Most will tell you they will buy a car first. That means, there's really no room for growth for Easy Taxi in Ghana. The customer you had yesterday will buy a car today and stop using the service.
Then you go to another fresh customer who is looking to buy a car. One rule in business to grow is to keep your existing customers buying your stuff while acquiring new ones. If you can't do that, you are doomed.
So there you have it! I hear Uber is coming. Do you honestly think they will succeed where Easy Taxi failed? Let me know in your comments.
Guest Author: Edem Kumodzi is a Software Engineer with keen interest in enterprise information systems, Web & mobile applications. He currently works as a consultant at ThoughtWorks.
Opinions expressed by the author are his and his alone.