Uber rival FREENOW, the mobility super app from Germany, announced recently that their new strategic focus on the taxi business resulted in year-on-year growth of 13% and the company hitting break-even. The announcement was made at Munich’s Bits and Pretzels event, which comes two years after Thomas Zimmerman took over as CEO.
Founded in 2009 as mytaxi, Zimmerman joined in 2018 as CMO after a diverse career that had seen him working in marketing in various companies. In that time, FREENOW has grown in the incredibly competitive mobility market, a success Zimmerman attributes to their taxi-first strategy.
TFN spoke with Zimmerman to hear more about the FREENOW journey, and the lessons that other startups hoping to expand in the European market.
The importance of strategic focus
Zimmerman is clear that the company’s focus on taxis is integral to its success. It’s a choice that has seen them expand to become a major presence in more than 150 European cities.
It has meant that, unlike other mobility providers, FREENOW has focused purely on taxis, rather than diversifying into other areas, like such as delivery or micromobility. Although FREENOW is expanding its app offer, it can do so having achieved sustainability in its core business. “Achieving break-even is a first substantial step,” Zimmerman told us. “Our commitment to working with local taxi drivers and operators is the right approach for sustainable growth and success on both sides.”
Understanding local markets
Anyone who has used taxis in different cities will know they can offer very different experiences that reflect their regulation and the city’s culture. “Really understand the market,” Zimmerman said. “Even though there are lots of similarities, there are also differences.”
It has meant that FREENOW has used different initiatives in different cities, helping to meet the demands of the market. In Germany, for example, they have used fixed-price offers, providing certainty for passengers, which has seen a 50% increase in demand for taxis in Berlin.
For Zimmerman, this means a hands-on approach. “Go and visit potential clients,” he advises. “Understand the situation, and, especially after Brexit, check the framework you’re operating in.”
Build successful partnerships
FREENOW’s model is intended to work with existing infrastructure. Rather than trying to disrupt the mobility sector, they have worked with local companies, making it easier for those companies and passengers to find each other.
They are also building the partnership model, so their platform covers every need. “Our platform is a one-stop shop for mobility needs, it’s a true platform approach,” Zimmerman said. “You can do car sharing via our platform, scooters, emopeds, ebikes, and that’s always together with partners.” It means that in the UK, for example, you can hop on a Human Forest bike just as easily as booking a cab.
However, those partnerships are about more than just the service they provide. By working with, rather than against, existing taxi companies, FREENOW has been able to benefit from their local knowledge and expertise, as well as giving FREENOW an easy way to gain traction in new markets.
Maximise the power of digital transformation
The traditional taxi has changed little in decades. With a light to signify it’s for hire, potential passengers were forced to wait on streets, and sometimes argue with others, in the hope of getting one. The smartphone has changed all that.
FREENOW’s focus on taxis has helped bring an offline service into the online world. It also means that there is still room for growth, not just in new cities, but by adding more existing companies to the platform. “The offline taxi market is huge,” Zimmerman said. “FREENOW, with its historic taxi background, is well positioned to capture its still untapped potential.”
The company’s expansion has been down to their ability to successfully bring offline and online together. In FREENOW’s case, working with offline dispatchers and regulatory bodies has helped position them for success by helping passengers, providers, and regulators benefit from the benefits their platform brings.
Recognise the value of diversity
Zimmerman has embraced diversity in building the team at FREENOW. “It’s an important topic,” says Zimmerman, “the data show that diverse teams perform better.”
At FREENOW they embrace that by recruiting from all over the world, while having staff working in each of their nine operating countries. It’s meant, for example, their new Chief Operating Officer has come from Singapore, adding a new perspective to the team.
“You need to have a good team, and you need to be able to trust your team,” Zimmerman said. “In the end, everybody has something they’re really good at, and they should do it.”
The approach has helped FREENOW embed its product in its operating countries, developing their local knowledge. But it has also helped to strengthen the team, producing diverse viewpoints that improve decision-making and innovation.
Growing from a strong base
FREENOW’s success in such a competitive market should not be underestimated. Many have tried, and failed, to bring tech to taxis, FREENOW have succeeded. And it provides a compelling model for those hoping to grow in Europe to follow, using local knowledge and partnerships, leveraging digital tools and embracing diversity, but always with a focus on the core business.
For Zimmerman, that focus is what helps guide his strategy towards long-term and sustainable success: “It’s always about finding the right balance between making money, investing in the future, and somehow getting your head around where all this is moving.”
The post Uber rival FREENOW reaches breakeven: 6 powerful tips from CEO Zimmerman on succeeding in Europe appeared first on Tech Funding News.