The case of Chile’s SaferTaxi: adapting a global trend to a local market

SaferTaxi is a transport mobile application company famous for being one of StartUp Chile’s greatest success stories. In 2011, it was releasing a Beta application simultaneously in three countries: Brasil, Argentina and Chile. Today, SaferTaxi employs eight people in Chile, and almost 30 on the Latin American level. It’s the biggest Car Flow company in Chile with about 100.000 rides per month.

We met Martin Rodriguez, Operation Manager at SaferTaxi Chile, to learn more about one of the trendiest company of the moment in what we call the Southern Cone.

SaferTaxi helps customers finding the closest available taxi through a mobile app. The user gets access to a list of taxis depending on the distance to their current position. Both the user and the taxi driver benefit from the system as they spend way less time finding each other. We’ve tested the app, twice: you get a cab in less than one minute!

Calling a cab used to be slow and unsafe: slow because you could wait more than half an hour before the cab gets there, unsafe because you could be waiting in the streets in the middle of the night. And yet, we’re not even talking about the fake-taxis. SaferTaxi solves both problems: not only the app shortens the waiting time, it also addresses the safety issue as drivers are identified, listed, and evaluated by users. A taxi-driver charging more than he should or having a worrying behavior would be black-listed soon enough.

Besides, the app is free and the customer isn’t paying more than a regular ride. Safertaxi gets its money from taxi-drivers, who are charged 250 chilean pesos (about US$0.40) for each ride obtained thanks to the app.

Understanding local specific

The case of SaferTaxi shows how adapting to local specifics is important to win a market.

SaferTaxi has managed to find many early supporters. They count with Start Up Chile as one of their first supporters, and they managed to raise one million from American investors in 2010, including one of Hotmail’s former investor, before getting even started. They did well, and on the second round, they could raise more than five million dollars.

But money is nothing if there is no understanding of the demand. Hopefully, it’s benefited from perfect timing, at least in Chile. In 2011, the Zero Tolerance Law was voted in, stating that any driver should have a blood alcohol concentration of zero percent. As the metro network in Santiago closes around 11:00 pm, just when people start going out, the law made the use of cabs more common at night.

At the time, there was no competition at all, which helps.

Today it is challenged by some companies in Brasil, Argentina and Chile. But it’s still a leader in the Chilean market, and there’s a reason why. Compared to its competitors, SaferTaxi gives priority to safety, especially at nighttime, addressing one of Latin America’s main issues. It chooses the closest cab while competitors, such as EasyTaxi, assign the trip to the first taxi accepting it, regardless of the distance to the user.

But being successfully different from their competitors might no be enough: they still have to cope with the competition of Uber, which just raised another US$1.2-billions and recently entered the Chilean Market. And the competition is fierce: in Chile three startups have already failed in that field.

So far it’s conquered Santiago, Chile’s capital and by far its largest city with its seven-million inhabitants (out of 17-million overall in the country), but it still has to grow nationwide. Martin Rodriguez says it requires to understand local markets in order to win a city.

When it comes to taxi rides, habits may be different in Temuco, Concepción, Antofagasta, or any of Chile’s large city. For instance, while in Santiago you can call out a taxi just about anywhere in the streets, in Viña del Mar (which forms with Valaparaíso the second largest conurbation of the country), people have to wait in specific places and taxi drivers use radios to pick them up.

Still a lot to do, but seems the startup is on the good way!