InstantCab: Customer Acquisition

Getting someone to drive you around is big business. NYC taxi medallions sell for over $700,000; Uber is expanding throughout the US, Europe, and Asia; and San Francisco streets are filled with a multitude of ride-shares, car services, old style taxis, and next-generation taxis. One entrant to this crowded field is InstantCab. Their value proposition seems to be “Get a taxi, fast; and don’t worry about payment method.” I especially appreciate this because not only do I hate hailing cabs, but I am also tired of taxi drivers who won’t accept credit cards. InstantCab solves both problems–a cab comes to you when you call on their app, and you can only pay with a credit card (through their smartphone app, not given to the driver).

I became aware of InstantCab through one of their very clever customer acquisition efforts. I was standing on a street in the San Francisco financial district, trying to hail a cab. A cyclist stopped in front of me, asked if I was hailing a taxi (yes) and gave me a card shaped like an iPhone with their logo and information about their taxi-calling app/service. He quickly explained their service and rode off. I got a cab before I could install the app, but actually downloaded it on the ride.

This may be one of the most targeted possible advertising efforts. By seeing me standing on the street, hailing a cab, the cyclist knew that:
-I needed a cab or other ride and didn’t have one called.
and also that:
-Their service would solve my problem.

I was exactly their target customer, and that makes it a very easy sales pitch! However, not all consumers appreciate this marketing approach. As I was searching for information about this advertising campaign, I found one negative review of their app that referred specifically to the cards:

Quit littering our city with your stupid advertisement cards.

Litter or not, I believe this very targeted and clever campaign will lead to fast growth of their customer base, and if they keep quality better than hailing cabs (not hard), they will be quite successful in acquiring and retaining customers. This strategy of on-the-street, targeted marketing seems especially useful to establish a base of users that then leads to the viral and network effects that startups rely on to see accelerating growth.

In comparison, Uber (possibly the market leader in the non-taxi contracted private transportation space) seems to focus more on building their brand, rather than pinpointing likely customers. One example of this is their “on-demand ice cream trucks,” a promotion on their app where instead of having a car and driver brought to you, you could click a button and have an ice cream truck come to your doorstep. This reinforces their brand (pay a little more, get exceptional service and convenience) and earned a fair bit of media coverage, but is not targeted directly to their most likely customers. While Uber’s business model is very successful and they are growing fast, I believe the more nimble InstantCab may have an edge in their creative customer acquisition initiatives.

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