Addison Lee sees £50m sales through iPhone app

When most developers write their first iPhone app, the best they can hope for is that their friends and family will try it out and maybe some paying customers will stumble across it.

But for Charles Gallagher, mobile developer at London taxi firm Addison Lee, the story was quite different.

The taxi firm had already has some success with using mobile as a channel for customer communication. In 2000, it started using text messages to give customers the mobile numbers of cab drivers, and it later introduced a WAP site allowing customers to book cabs through their feature phones.

So when the iPhone was launched in 2007, it seemed clear that the firm should at least try developing an app. Gallagher, who had never used a Mac before, bought one and developed the first prototype app in his bedroom.

Put simply, the app allows customers to book a cab on their smartphone. It can save the user’s frequently used destinations, such as their home or the office, and can access the phone’s GPS system to find their current location.

According to Peter Ingram, Addison Lee’s IT director, building the app was made all the easier by the company’s earlier investment in its booking and cab monitoring systems, which meant key functions were accessible as web services.

By sheer chance, Apple contacted Addison Lee as it was ramping up its marketing efforts for the iPhone, and invited the company to have its app featured in a TV advert.

This gave the app a quick burst of adoption early on. "It really showed us the power of TV," recalls Ingram.

Adoption has grown organically since then, and the app has now been downloaded 350,000 times and supports 45,000 bookings a week – about 25% of the company’s bookings.

Addison Lee expects to take £50 million of business through its iPhone app this year – not bad for something built in a bedroom.

The app is now on its 88th version – all built by Gallagher, who is Ingram’s cousin. He also developed a BlackBerry version, while Addison Lee’s outsourced development partners built the Android version. Interestingly, however, the Android version is not yet as popular as the iPhone or BlackBerry apps, perhaps reflecting the firm’s corporate demographic.

Releasing the app, Ingram says, has allowed the company to grow sales by 40% in the last few years without having to expand its customer call centre.

"We’ve still got the same office space, with the same number of people, but we’re doing more jobs and we’ve grown revenues," he explains. "It used to be that every year we’d have to knock a wall down to put in more call centre space. The app has meant that we don’t have to do that as aggressively."

Ingram attributes the success of the app to the fact that it is actually designed to improve the experience of the customer, while simultaneously benefitting the organisation.

“We wanted to empower the customers to deliver their own service,” he explains. “Typicallly, you phone the call centre and get put in a queue just to enter your address, which you could do on your own device.”

It is a principal that he advises other businesses to consider when developing their apps.

“My advice would be to build something you would want to use as a consumer,” he says. “Go with your instincts about what it is that drives customers mad. You’ve got to find the piece of the puzzle that doesn’t work and then build an app around that.

“If the customer likes it, that builds loyalty, and they won’t go elsewhere because you’re offering something your competitors haven’t got,” he says.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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