Taxi company spin-out targets customers with mobile adverts

START-UP MobiTexi, a spin-out of private hire taxi business Amber Cars, says its location-based advertising software, which it claims is the first of its kind, is proving popular.

MobiTexi, which was founded by managing director of Amber Cars Andrew Pennock and software architect Paul Green, originally developed the Texi system for the Leeds-based taxi company to use to improve its offering. But interest from taxi firms across the UK led to a decision to market the product commercially – and it’s paying off.

In month one – September 2011 – MobiTexi started off with five customers. Today, it has 126 customers on board.

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The key element of Texi, an SMS-based software, is its ability to offer location-based advertising to businesses. “So we can send an advert to everyone going from Headingley into Leeds city centre. More than likely it would be a student, so we can target that audience.

“When you get in the car you get a text saying, ‘Thank you for using Amber Cars’, and the advert is placed depending on where you are going, what time it is and so on”, said Craig Pollock, operations director.

The system also allows taxi firms to send messages to customers with the status and details of the taxi – such as the colour of the vehicle and its registration plate – while offering them the chance to text back feedback. Customers can also book taxis via text.

“We developed the advertising really as an add-on for local businesses so they would stick with Amber Cars”, explained Mr Pollock, but he added: “It’s kind of just blown up.”

Texi has attracted interest from O2 Media, which is about to start a trial of the software with a view to potentially selling advertising on MobiTexi’s behalf. Meanwhile, existing customers of MobiTexi include pizza business Domino’s, Parklane properties and Revolution bar in Leeds.

As an example, Domino’s might send a text in the early hours of a Saturday or Sunday promoting pizza offers, targeting those coming out of the bars and clubs. MobiTexi holds the advertising rights to all texts – only one advertising-based message can be sent to a customer per journey.

In the first six months, MobiTexi had secured signed contracts with the majority of the largest private hire companies in the UK, giving it access to more than 125,000 cars, said Mr Pollock. “At the moment we are sending about 3.5 to 3.7 million texts a month”, said Mr Pollock.

Revenues in the company’s first year of trading – the year to the end of September 2012 – are expected to hit £200,000, with little profit due to heavy investment. But the forecast for the following year – assuming that O2 is on board – is closer to £1m, said Mr Pollock, with the potential for 40 per cent profit margins.

“We take on between five and 10 new taxi companies each week. We are hoping by the end of the [calendar] year we’ll have 50,000 cars across 500 taxi companies on board. That will give us about 10 million texts per month.”

Mr Pollock added: “We have found that recruitment, fast food and hospitality sectors really benefit from advertising on our SMS software.

“There is no-one else in the world that can advertise like we do.”

Meanwhile, a business networking event resulted in MobiTexi linking up with entrepreneur James Caan’s private equity firm Hamilton Bradshaw, which is not an investor in the company, but is acting on a consultancy basis.

The next step for MobiTexi is to integrate the software with a payment provider, said Mr Pollock.

MobiTexi is owned by Mr Pennock and Mr Green.