Cabify, Spanish Ride-Hailing Leader Proves ProfitableBy Andrea Villar | Thu, 05/14/2020 - 05:00
Q: What are Cabify’s milestones after eight years in the Mexican market?
A: In the first stage of the project, the app was launched only in Spain. After two years the company expanded to Mexico, Peru, Colombia and Chile. In the Latin American markets, we have been operating for six years, gradually expanding our services to different cities in each of these countries.
Today, we operate in eight cities in Mexico. In the last few years, the company’s objective has been to consolidate its results in Mexico and in other markets where we are present. We are now focused on providing our investors with good financial results and maintaining the trust they have had in us.
For the first time, Cabify publicly shared its financial results for 4Q19 to demonstrate that we are a 100 percent profitable company. This means that we are able to cover all our operating expenses with the income we generate through the app. Our objective is to continue growing, but at the moment, we have no plans to expand to new cities in Mexico.
Q: What are the biggest challenges Cabify faced on the road to profitability?
A: Without a doubt, competition has been one of the biggest challenges we have faced in recent years. We have always believed that competition is good. Some companies have large investment funds supporting them and competing with these companies can be difficult. But I believe that what Cabify has done very well is to respond immediately to any change in the market. For example, in the face of the crisis unleashed by COVID-19 globally, we have adapted our investment lines to innovate in the business and to develop new alternatives that allow us to continue growing. In the early weeks of the pandemic, we launched a new in-app service called Envíos that allows people to send things from one place to another without leaving their home.
We are also working with Lana, a company that is part of the same group to which we belong, to grant microloans of up to MX$18,000 (US$740) to drivers, according to their characteristics and profile. Also, we are equipping our vehicles to offer a broader level of security, both for the user and the driver, to reduce the risk of contagion.
Q: What particularities can you highlight about the Mexican ride-hailing market?
A: The market in Mexico works very differently from how Cabify works in other markets. This is because regulations are completely different. Mexico does not have regulation at the federal level that frames our business. Rather, each state government defines the way in which it wants to collaborate with us. However, practically all regulations in the country are closely linked to what happens in Mexico City. We need to meet certain requirements, such as specifications on the age of vehicles and providing a contribution to a mobility fund, among many others.
Q: What elements make the platform more attractive than others for potential drivers and customers?
A: One area that has distinguished Cabify since its global launch is that we are very focused on the corporate sector. We offer our platform to companies so they can monitor and control transportation expenses and all the trips their employees make. We have multiple analyses that demonstrate that it is much more profitable for companies to offer a corporate account to their employees than to provide a car as a benefit.
Our corporate platform has a user-friendly interface and offers operating padlocks and controls that no other platform offers. We provide different types of credit to companies so they can work with us according to the volume of trips they are going to make. The main banks in Mexico use our platform to mobilize their employees, as do very large companies from other industries. For this reason, the processes and protocols that we have for our drivers are rigorous.
All this translates to the user experience. The quality of the services offered by Cabify sets us apart from the competition. In recent years, with the entry of many other applications with very aggressive pricing strategies, we have had to adapt our business model to offer all users a variety of alternatives. We believe that there are four factors that influence a person’s decision to request a trip: vehicle availability, the price of the trip, quality and the safety of the service.
Cabify is a Spanish ride-sharing company based in Madrid that provides transportation and mobility services. In 4Q19, the company proved it was a profitable company. It is present in 12 countries