The fierce price war between Uber and Lyft hasn't just been squeezing the pockets of drivers. Hailo, an European on-demand car app backed by millions in American venture capital, says frequent price cuts made it "impossible to be profitable." After two years here, the company is pulling its service from all of North America.
The Financial Times broke the news, reporting that the company is packing up their $77 million in funding and focusing on European and Asian markets. In a statement to Mashable, Hailo's co-CEO Tom Barr expressed doubt that multiple startups could share the North American market:
We have... decided to end our operations in North America, where the astronomical marketing spend required to compete is making profitability for any one player almost impossible.
This is just the first domestic causality in Uber's push to use low fares to build a monopoly. Hailo insisted its business was growing. However, Barr told the Financial Times that "the profitability of the market and the type of environment [that other taxi-app companies] are setting up – both on the driver and passenger side – ceased to make sense to us."