The South African taxi app startup, Zapacab, is closing shop. Since it launched in beta under the 88mph accelerator programme in July 2013, the guys from the cab-hailing app recall a bumpy road, but one they won’t regret.
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Zapacab’s service was rather simple and has been popularized by the likes of Hailo, Lyft and Uber the world over. By relying on your smartphone’s GPS, passengers simply tap a button in the app, enter their phone number, and wait and watch their ride come closer on a map in real-time.
But if it’s that simple, why did it fail?
Getting traction from local drivers has been one of the most difficult things to do, explains CEO Rupert Sully.
“Most of the drivers aren’t using Android smartphones,” he says, a complication when the drivers had to rely on the phones in order for the system to work.
Zapacab were forced to provide many of the drivers with Android smartphones, or at least subsidise them. This method obviously isn’t sustainable, and those Zapacab provided with mobiles often had problems with theft.
The smartphone environment is still underdeveloped in South Africa, which made Zapacab’s challenge that much more difficult. Though the numbers are starting to change, the South African smartphone users are still the minority of the population.
Those who do use smartphones and rely on cabs getting them from A to B have the luxury of choice, including super popular Uber, which contributed to Zapacab’s sluggish uptake and quest to establish itself.
Aside from the challenges Uber presented, there were other competitors like SnappCab from Johannesburg, Mellowcabs and the fast-expanding Easy Taxi from South America backed by Rocket Internet, which may move to South Africa.
More notably, however, Uber has the upper hand. The US based luxury cab startup cruised into South Africa last year, and is more easily capable of educating the local market about its services.
Apart from having a massive budget, Uber’s an established brand internationally and thus carries a trustworthy track record.
Zapacab’s Matt Aberdein, who’s Head of Product, says that over the past few months they were forced trim their salaries while looking for outside funding. In the end they just said f*ck it and, in the true spirit of the Lean Startup, decided to fail fast instead.
Both note that South Africa’s startup environment is yet to mature. Venture capital and general community support are lacking. The company’s not comfortable disclosing any information regarding its shareholders or financial figures.
Moving forward
Zapacab has decided to keep the chat software used by the cab drivers live. Sully notes that this is probably one of the toughest things to let go; the strong relationships built with the drivers.
When asked what the road ahead looks like for them personally, Sully and Aberdein say they’re currently working with SnapScan — a local startup that’s beginning to establish itself as a competitive alternative in the cashless payment space.
Mobile technology, especially when it comes to geo-location applications, is what intrigues Sully most. It’ll be very interesting seeing what these guys conjure up next.
Zapacab is currently in talk with various potential buyers.
