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Uber losing its edge in taxi app wars as competitor Hailo reportedly raises big bucks

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hailo cab
hailo cab

San Francisco startup Uber has had two advantages in the great battle of the taxi apps: money and notoriety. That may be about to change. Rival startup Hailo has raised $30 million from high profile investors, reports All Things D, which would bring its total funding up to $50 million, narrowly surpassing Uber's reported $49.5 million.

The new money sets the stage for a high stakes showdown. Riders in Boston and Chicago, where both Uber and Hailo already operate, are likely to see huge discounts and heavy marketing (ice cream, anyone?). But the battle will be fiercest in New York City, where regulators just cleared the way for e-hailing apps to start booking rides in mid-February. Several apps are likely to hit the market at that time, including Uber, Hailo, and potentially GetTaxi, Taxi Magic, and other competitors as well. Hailo is also likely to use the fresh funding to launch in new markets. If it follows Uber's lead, Washington D.C. or Seattle could be next.

The battle will be fiercest in New York City

Apps that allow consumers to hail taxis from their phones have turned out to be far more controversial than the average urban dweller would have imagined. Regulations are thick and entrenched interests run deep, but Uber bulldozed the way for taxi apps in at least three US cities through a combination of grit and irreverence. In New York, Uber launched its taxi hailing service without the final approval from local regulators and had to shut it down about month later.

By contrast, Hailo hung back, playing nice with regulators and pre-registering 1,000 drivers. The Hailo app also includes a mobile social network for drivers in addition to booking capabilities. The startup did not immediately respond to a request for comment.