Before Uber and Grab came to the Philippines, Eddie Ybañez had developed an SMS-powered taxi-hailing service in Cebu City based on his master’s thesis. The service took off as a mobile application in 2012 and is now known as MiCab, which uses ads in place of booking fees and surge prices during peak hours.
“The idea started as my masteral thesis in Cebu. When I created the idea, there were no smartphones yet. Uber was not yet here. MiCab as a service was through SMS then,” says Ybañez, the 32-year-old founder and chief executive of MiCab.
Ybañez graduated with a Bachelor’s degree in Information Technology from Cebu Institute of Technology in 2007 and Master’s degree in Information Technology from the same institution in 2010.
He says he learned how to code by sneaking into his high school’s computer laboratory and he sharpened his skills in college by becoming a web developer and systems engineer.
He worked as a software engineer for several companies which required him to travel to different places. Going to the airport, however, was difficult in the early morning because taxi cabs rarely passed by his place. The need to hail a taxi cab encouraged him to develop the initial SMS-based solution of MiCab, which was the subject of his thesis.
“It makes perfect sense, because personally, I felt the problem. It was in 2012 when MiCab was launched as a mobile application. Before it started as an app, it was just an SMS solution to send SMS to the driver. That’s how it started,” Ybañez says in an interview in Makati City during the launch of MiAds, the advertising solution of MiCab and Japanese partner Hallohallo Business Inc.
Uber, which started in the US in 2009, did not come to the Philippines until January 2014, while Grab, which was developed in Malaysia in 2012, expanded to the Philippines in August 2013.
When Ybañez met Kenneth Baylosis during Startup Weekend Cebu in November 2012, they discussed developing the mobile app version of MiCab together. Baylosis is now a partner in the company.
Ybañez says unlike other transport network companies, MiCab does not only give taxi-riders the convenience to hail a taxi but it also enables taxi drivers to compete with the likes of Uber and Grab.
“We partner with purely taxi cabs. Our business model is pretty different. We don’t charge booking fees. We have zero surge pricing. We depend on advertising for our revenue stream. That’s what makes us unique,” Ybañez says.
He says unlike other ride-hailing services, MiCab does not earn from drivers or passengers. It earns from ads sponsored by companies and brands that are displayed on Huawei’s seven-inch, LTE-powered, Android-based tablets.
Ybañez says he and Baylosis deployed the mobile app in Metro Cebu first by teaming up with Ken Taxi which has the largest taxi fleet in the Visayas and then expanded to Iloilo City where it partnered with Light of Glory Taxi in 2014. It later expanded to Bacolod City, Davao City and Metro Manila.
“For this year, we are targeting total deployment of 15,000 taxis. After that, maybe get around 30,000. Overall, there are 50,000 taxis nationwide. If we get 30,000 taxis, that would be enough,” says Ybañez.
The ultimate goal is to expand overseas, starting with other Southeast Asian cities.
Ybañez says MiCab allows taxi drivers to pick up more passengers and give them a share in advertising revenue. “Taxi drivers now have problem competing with TNCs, as riders no longer go to taxi lanes. With MiCab, they get additional eight to 10 passengers a day. Aside from that, they have a 10-percent share in advertising revenues,” he says.
He says MiCab teamed up with Hallohallo Business Inc., a unit of a Japanese company, to deploy MiAds using tablets with media support. “Hallohallo is our early supporter, giving us advertisers in Cebu. The moment we decided to launch nationwide, we tapped them as our partner,” says Ybañez.
Mihoko Mori, president of Hallohallo, says the Makati-based company provides digital taxi ads, digital marketing, marketing research, event management, sales promotion and business consulting.
She says with MiAds deployed in 15,000 taxis this year, they have a market reach of 31.2 million passengers a month.
“Hallohallo is based in Manila, but our parent company is in Japan. We invested here in the Philippines. Taxi ads are common in Japan, and we bring it here in the Philippines. From the taxi ads, we expanded to other mediums of advertising,” Mori says.
“We see really big potential with MiAds because the volume is totally different from others. It is effective especially during heavy traffic when there is nothing to do. That is called captive marketing.
It is also a low-cost form of advertising, unlike TV,” she says.
A study conducted by Japan International Cooperation Agency shows that the Philippines ranks as the 9th country with the worst traffic in the world and 4th in Asia. Mori says MiAds effectively uses this situation to approach a certain number of passengers with digital advertisement. MiAds reaches up to 80 passengers a day per taxi, or over 31 million in a month.
She says for advertisers, MiAds offers speed due to its digital platform, targeted reach in tapping consumers, interactive content that promotes engagement, wide reach of market and data-driven analytics.
An advertisement slot costs P500 a month for a 15-second display, repeated in seven-minute to five-minute intervals.
“We believe that MiAds is the future of advertising. We see a lot of potential in the product and we want to use our distinct position to drive influence and make our ads matter to our audience. We recognize the opportunity of working with an innovative technology company such as MiCab to help businesses leverage on the digital advertising platform,” says Mori.
MiCab, which was recently accredited by the Land Transportation Franchising and Regulatory Board to operate in Metro Manila, shows the advertisements on tablets installed in the taxis.
Taxi operators are the ones who shoulder the costs of installing the tablets and data connection, but Ybañez says the taxi drivers can quickly recoup the investment in the form of more income from passengers and their share in ad revenues.
“MiAds will help businesses reach consumers in an unprecedented form of ‘mobile advertising’ here in the Philippines. They’ll be able to reach their target market wherever they are, when they are most open to hear from brands. And by helping enterprises, MiAds will keep MiCab affordable for consumers,” says Ybañez.