Heetch
Heetch began in Paris as a niche ride-sharing business: featuring young drivers, it operated only late at night and early into the morning on Thursdays, Fridays, Saturdays and Sundays. The name came from “hitch,” as in hitchhike, pronounced as the French would pronounce it.[1] The drivers were young, and so were the riders; the riders were either too drunk to drive home or to be on public transportation (no one said this, but it could easily be inferred) or else they lived in one of the “dangerous” banlieues, the areas outside Paris, where regular taxis did not want to go, especially at night. Put this way, it sounds almost like a public service.
The two videos that follow, both of them advertisements, show their directed marketing. The first, “La Jeunesse soutient Heetch,” came out about six years ago, when the company had just been taken to court (more about that later) and featured a clever montage of spoken words from great French figures, including Presidents Hollande and a very young Sarkozy who all, it says at the end, would have supported Heetch if they were still young. The second, from this year, combines historic footage of the giant apartment blocks, the cités, that characterized the banlieues, interspersed with shots of the people and families who live there. The message is that no other taxis will drive there at night; Heetch will.
But Heetch got in trouble because they broke the law. Teddy Pellerin, co-founder and CEO of the company, did not use professional drivers, but rather part time drivers who were neither licensed nor authorized as professional chauffeurs: they replicated the business model of UberPop, which had already been taken to court and given a hefty fine.
Pellerin saw his company as a “P2P” (peer to peer) service, a part of the “sharing economy.” In the early 21st century, this concept began to be defined as a “collaborative consumption” model, effectively (and hopefully) described in a 2010 TED talk by Rachel Botsman.[2]. She is an author and speaker on “trust” in the modern world, who arrived in the first moments of enthusiasm stirred by the digital natives of Generation Y and the rapid development of technology. “Technology,” she asserted, “is enabling trust between strangers.” The sharing economy emerged from: a “renewed belief in community”; Peer-to-Peer networking platforms; environmental concerns, that led people to a willingness to trade, share, repair, rather than to throw away; and, in 2008, the Global Recession, that made cheaper products essential. Her definition was also typical in stressing the rebirth of community as a byproduct, or perhaps even as the main point, of this new vision of consumption.
The “sharing economy,” the other term for this phenomenon, was defined later in a pared-down version by Koen Frenken: “the sharing economy can be defined in a materialistic sense in that consumers share a physical artifact in its usage.“[3]. While this sort of economy promised much, in the way of saving the environment and cutting costs, it was not clear how it would be organized, what the status of workers would be, who would own the “artifact,” and how the market would be regulated, to list only a few questions. Frenken provided three possible scenarios, but the most likely seemed to be “platform capitalism,” in the form of global platform companies–”Amazon, Google, Uber, and Airbnb”–who would control the marketplace, making their platforms ever more user-friendly and thus unavoidable.[4]
None of these companies represented any sort of “sharing”. And other skeptics raised more practical considerations, notably that the problem of underutilization might be replaced with the problem of things that wear out more quickly. And the platform-startuppers were not necessarily concerned with the environment or the community, but were often “Schumpeterian forces of creative destruction,” as in “Go fast and break things.”[5]
Pellerin was arrested, and he was charged, as were the two main Uber executives in France in a separate case, with “‘misleading commercial practices and complicity in the illegal exercise of the taxi profession.’”[6] In court, Pellerin started down the dead-end road of insisting that he was not running a taxi service because: they limited drivers to earning 6,000 euros a year, which meant that it essentially allowed drivers to cover the cost of driving for a year; because unlike Uber, the fee for the ride was merely suggested, and passengers could even pay nothing if they wanted to, adding “We are part of the sharing economy.” Heetch also paid for insurance for the passenger and driver. And none of the drivers was professional, because they did the driving “to have fun” and get money for the gas.[6] And nothing is more fun than getting into an unknown car at night with a stranger at the wheel; or, from the driver’s side of things, than sharing your personal car (Heetch did not provide cars) with someone who might get sick over the seats.
The Financial Times saw Heetch’s trial, beginning in late June 2016, as a “test” of whether French startups would be treated the same as–well, Uber. The answer was yes. Uber was fined 800,000 euros for UberPop, which used non-professional drivers. Pellerin thought his company would not be found guilty; they had limited Heetch drivers’ earnings and thus hours, they had limited the times, they did not charge but merely suggested a price that the passenger might want to pay; that put Heetch in the “sharing economy.”[7] They were found guilty, and fined 600,000 euros, which hurt them a lot more than 800,000 had hurt Uber.
Heetch was down, but not out: they started up again as an authorized non-taxi driving service (called VTCs) with licensed drivers. (French regulations on this matter are complicated.) They began raising funds from venture capitalists, reaching 38 million euros in their series B round, which they used to expand internationally to francophone Africa–Morocco, in 2018, Algeria in 2019, Angola 2020, with other nations–or rather, big cities in other nations–on the horizon.[8]. Heetch was not alone in what Sifted referred to as “the ride-hailing scramble for Africa.” Already there was Estonia’s Taxify in Uganda, South Africa, Nigeria, Tanzania, Kenya and Ghana. Uber is in all of those, plus Egypt and Morocco. The attraction is the lack of regulatory obstacles, plus need. Said Pellerin of African countries: “They don’t have strong public transport networks so many people are already using taxis just to go to work. The prices are very cheap already so we can’t compete on that. But we can bring some efficiency to the market.”[9]
And they are also going back to Europe. They are in Paris, of course, and at the end of 2020, they launched in Ghent, Leuven, and Antwerp, where Uber had broken through the regulatory obstacles some time before; once again Heetch’s emphasis was on the customers who “are mainly people who are used to arranging all kinds of things with their smartphone: young and local people. The taxi companies mainly rely on people who are regular customers, and go to a taxi rank or stop a taxi”–Pellerin’s rather muddled explanation for why they were not, in fact, in competition with licensed taxis.[10]. But taxi companies now all have apps–the radio car reliant on calls from headquarters is a thing of the past. And Heetch has had it right all along: as their Crunchbase.com profile states, referring (it would seem) to their European business, they are “a ride-sharing app targeted at late night transportation seekers.” As taxis apps proliferate, it’s good to have a niche.
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Photo 216447689 © Rafael Henrique | Dreamstime.com
[1] lan Hope, “New Taxi Service Launches in Ghent, Leuven, and Antwerp,” The Brussels Times, November 7, 2020. https://www.brusselstimes.com/139561/new-taxi-service-launches-in-ghent-leuven-and-antwerp
[2] [Rachel Botsman, Botsman, The Case for Collaborative Consumption https://youtu.be/AQa3kUJPEko.
[3] Koen Frenken,. “Political Economies and Environmental Futures for the Sharing Economy.” Philosophical Transactions: Mathematical, Physical and Engineering Sciences 375, no. 2095 (2017): 1–15, quotation p. 2.]
[4] Frenken, op. cit., p. 8.
[5] Borel, Simon, David Massé, and Damien Demailly. “L’économie Collaborative, Entre Utopie et ‘Big Business.’” Esprit, no. 416 (7) (2015): 9–18. http://www.jstor.org/stable/44136080, p. 17. “Go fast” is a frequently repeated mantra, linked to Mark Zuckerberg. The other reference is to the work of Schumpeter, whose “creative destruction”–capitalism destroys old businesses as it creates new–is a term used also by Emmanuel Macron.
[6] Adam Thomson, “Diversion from traditional taxis takes another turn in Paris,” Financial Times, February 11, 2016. https://www.ft.com/content/a0fb6312-cb2c-11e5-a8ef-ea66e967dd44.
[7] Adam Thomson, “France’s Heetch in the dock over ride-hailing service,” Financial Times, June 21, 2016. https://www.ft.com/content/cd364388-379d-11e6-9a05-82a9b15a8ee7.
[8] Manon Triniac, “Heetch accélère son développement en Afrique,” Maddyness, December 1, 2022. https://www.maddyness.com/2022/12/01/heetch-afrique/ They had plans for Tunisia, Senegal, Côte d’Ivoire, Democratique Republic of the Congo, Mali, added 2022, with further plans for Burkina Faso, Mauritania, and Togo.
[9] Maija Palmer, “Heetch joins the ride-hailing scramble for Africa,” Sifted, May 9, 2019. https://sifted.eu/articles/heetch-joins-the-ride-hailing-scramble-for-africa
[10] lan Hope, “New Taxi Service Launches in Ghent, Leuven, and Antwerp,” The Brussels Times, November 7, 2020. https://www.brusselstimes.com/139561/new-taxi-service-launches-in-ghent-leuven-and-antwerp.
