London taxi company Addison Lee is battling to stay relevant in the age of Uber
It's important for Addison Lee to present itself as both a reliable, advanced business to cater to enterprise clients, but it's also behaving like a fast-moving startup to attract the best tech talent and keep its app up to date.
Business Insider met with Addison Lee CTO Peter Ingram in the company's head office in London to find out more about how its technology works.
Inside Addison Lee
The main room in the Addison Lee head office is the nerve centre of its operation. There's a big wall of computer screens showing a map of London, and every single Addison Lee cab is plotted on the map. Lines of cubicles extend through the main floor, and staff members sit with headsets on directing drivers who have any problems.
Addison Lee started to move from a traditional taxi company to a technology-based business in the 1990s. The company, founded in 1975 by John Griffin, started life as a private hire taxi company, essentially a giant cab firm. It was purchased by private equity company Carlyle Group in 2013, and now has over 4,800 cars operating in London. The business works in a similar model to Uber, in that drivers aren't employed directly by the company. Instead, they're usually self-employed.
Addison Lee's in-house computer system matches drivers with passengers. One screen shows a list of incoming jobs, and they're automatically matched to drivers who are either closest, or drivers who can get there in the best time. It's similar to how Uber works, but it's fascinating to watch it take place.
Ingram describes the system as "like Wall Street and shares, the changing circumstances of the drivers and apps and people changing their minds ... If everybody was doing it, if everyone had anti-collision in their car, we wouldn't have accidents, I mean every car should have it through law."
The system of routing and matching cars is incredibly complex. Ingram says that the company has looked into using blockchain technology for its routing system. The blockchain is the database that underpins the digital currency bitcoin and keeps records of transactions, but that same technology can also be used for other tasks.
It would be rather strange if startups began to use the Sherlock system to run their own businesses, especially if they went on to overtake Addison Lee. But Sherlock isn't really designed for small companies to use, Ingram said. Instead, it's meant for larger businesses that operate like a traditional taxi company.
Ingram did concede, however, that Addison Lee has things that it can learn from other companies. "I think we've learned some things from the new text messaging, from people like [parcel delivery company] DPD, they've done some quite cute things, and we certainly keep an eye on the industry and what they're up to," he said.
Startups can learn from Addison Lee, too. Ingram says that young companies regularly visit Addison Lee. "Over the years we have met a lot of companies," he said. "Some we may have agreed partnerships with, some have disappeared."
Upstairs at Addison's Lee office is the main call centre area. The rows of workers downstairs don't take calls from people booking cars - that all takes place on the floor above. There are hundreds of workers speaking to customers and booking journeys. A large screen indicates the number of trips taken by the company's large enterprise clients (we weren't allowed to take a photo of that screen, but everything else in the building was fair game.)
It's understandable that Addison Lee is keen to protect its big-name enterprise clients - they're a major part of what sets Addison Lee apart from its competitors. Uber doesn't have support for business customers in the UK, but Addison Lee does. However, that is likely to change in the near future, with Uber currently hiring a UK Manager of Uber for Business.
Working on building up strong relationships with enterprise clients is a smart move for Addison Lee. Uber CEO Travis Kalanick said in 2014 that the company plans to have 42,000 drivers in London by 2016. That's a huge number, and potentially a big threat to Addison Lee.
Addison Lee is working on an automated phone system
But the floor filled with call centre workers may not be around for long. Ingram says that Addison Lee is working on technology to automate the process of booking a taxi over the phone.
"The computing power needed, it can be done but it takes longer. It might take five seconds ... But because we have pre-populated data about you, we know where you live. Big data is amazing, what you can tell about a person is quite interesting. You would talk to the device and say 'I want to be picked up at home' and then it would know where that that is.
"I'm not saying it's something we are going to roll-out tomorrow," Ingram said. "But we're always looking at what the next big thing is."
Why bother developing a fancy robotic phone system, though, when people are increasingly using smartphone apps to book rides? Well, Ingram explained that a significant number of Addison Lee's customers prefer to use telephones still, or they don't feel comfortable using a smartphone. Right now the split between online and phone bookings is 60/40 - with 60% of bookings taking place online.
Addison Lee is also looking at developing technology that comes into play when customers are actually in cars. Right now it offers Wi-Fi hotspots in vehicles that give free internet access, but Ingram says he wants to take that one step further and use data about trips and customers to serve targeted ads.
"We know when you get in a car again because you see those bookings," Ingram said. "[On] most bookings, people are providing an email address. You've got their email, their home address, you can look up the average house price in their street, you could work out the gender based on the name. There is quite a lot of targeted information that we might be using. We'd like to sell advertising on the Wi-Fi so there are discussions at the moment from some media buyers with regard to having some kind of video or promo on the landing page of the Wi-Fi."
What about serving ads on top of cars? Companies like London startup Eyetease have developed digital screens that can sit on top of taxis (above) to help cab firms earn money as they drive around. It's a neat idea, but Ingram isn't a fan.
"You can't fit it in a lot of car parks," Ingram said. "And some pickups, you'd never get to [them]. You know, I'm not sure that they are that effective. It's just a lot of noise ... I won't profess to being an expert but it's not something we're looking at. Again, it's against our regulations. TfL wouldn't allow us to have advertising on the vehicles."
Leave the call centre floor and climb the stairs at Addison Lee HQ and you'll eventually end up at the top of the building. That's where the IT team sits. It's a small office, similar to the kind of space a young startup would rent. But this is well equipped, and comes with a brand new Apple TV and a screen showing people accessing the Addison Lee website.
Behaving like a tech startup
Ingram excitedly mentions the new Apple TV, and shows off his Apple Watch. There's an Addison Lee app available for the device, and Ingram says it took two months to develop. The company doesn't get many bookings through the wearable app, but Ingram says "it's a good PR story."
The Addison Lee app recently added support for Apple Pay, Apple's mobile payment function that lets customers use their phone to pay for items. Ingram says the functionality was added to the app in just 26 days. He says Addison Lee "drove Apple mad" as the company readied its technology, and eventually finished it with 15 minutes to spare before the launch.
How does a 40-year-old company like Addison Lee attract young developers and university leavers? Well-funded startups can likely pay more, and they're probably more exciting to a new developer. Ingram says that Addison Lee provides office space to new startups, and some companies eventually join Addison Lee after working with the corporation. It also sponsors coding classes in Russia, and has a team of developers in the country also. So it's a matter of visibility.
But as much as Addison Lee behaves like a young technology startup, it's still a corporate giant that would be affected by Transport for London's (TfL) tough new proposals on ridesharing apps like Uber.
TfL published a series of proposed rules for private hire companies that could seriously hurt companies like Addison Lee and Uber. Some of the rules make sense, like phone lines for apps, and tests to ensure that drivers can speak English. But other laws are much tougher. One proposal would force drivers to wait five minutes before picking up a passenger. Another rule being considered by TfL would ban animated cars on smartphone apps that show how far away a driver is.
The TfL proposals are currently undergoing a consultation process that means that people can give the organisation feedback on the ideas. Once that's done, they could become law next year.
Ingram, however, isn't worried by the TfL proposals. "Everyone will find a way around it," he says about the proposed five minute wait time. He goes on to explain that Addison Lee has figured out how to deal with all of the proposals, and can tweak its software if it needs to. What changes is Addison Lee going to make to beat TfL? Ingram smiles. "I can't tell you that," he says.