Thanks to INSEAD, Three MBAs are Driving a Taxi Startup in Berlin

There is something moving faster through Berlin than the German election bandwagon this month - a taxi and limousine service that was founded by three INSEAD MBAs. If you've hailed a cab on the streets of Berlin within the last three months, chances are it was a driver from one of the 30 companies operating under the control of Talixo, a company borne from a b-school project that went on claim a slice of €50,000 from INSEAD's twice-yearly Venture Competition.

 

While all German eyes in Berlin are on Angela Merkel's Christian Democratic Union ahead of polling day on September 22, Talixo's €25,000 winnings, used to establish their startup that went to market around four months ago, are vested in the safest economy in the Eurozone.

 

Germany is considered an economic powerhouse and the country has grown at its strongest quarterly expansion rate for more than a year. Data last month showed that GDP was up  0.9 per cent on the year in the second quarter. The economy is booming and Germany is supporting the nascent Eurozone recovery. 

 

The country is ranked fifth in Bloomberg's best countries for business 2013 listings, and it is no surprise that MBAs would see Berlin as an attractive place to establish a startup. Three former INSEAD MBAs - Yvonne Gruendler, Sebastian Kleinau and Dominik Etzweiler -  have done just that and they hope to drive a new taxi and limousine booking business across the whole country. 

 

They credit their time spent studying at INSEAD Business School, ranked #1 by Business Week, for the creation of Talixo, a booking platform for taxis and limousines that uses a smartphone App, website and traditional telephone calls to take people to-and-fro across Germany's capital. 

 

All three MBAs worked on the project during their b-school studies and it proved so successful that they rolled it out into the real world. Sebastian and Dominik founded the company, while Yvonne soon re-joined them and helped get the company's wheels moving. But it was not just their INSEAD project that helped them establish the business - although 25,000 Euros in prize money was surely a strong incentive. "The most important thing that I learnt was how to work within a team," Yvonne said.

 

"I think that comes from the real advatange that INSEAD has in diversity. With Talixo, we have three people who have very different types of experiences, different types of focus and so it gives a good balance in terms of how we think, how to work with those differences without killing each other! That's the practice you get at INSEAD." 

 

Before studying at the prestigious business school in 2011, Yvonne was Head of Strategic Intelligence at East Kent Hospitals University NHS Foundation Trust in the UK. Dominik was a consultant at Bain & Company in Zurich, while Sebastian was a senior consultant at the Boston Consulting Group in Munich for over four years. 

 

Smartphone Apps for booking taxis is now a popular service. The ease of which booking and payment can be made has been continuously streamlined for efficiency. Talixo face competition from other leading services such as Uber, Kabbee and Hailo. But there is money to be made in the taxi booking world. Fast-growing taxi service Uber has raised more than $360 million, and in August this year had a staggering valuation of $3.5 billion. 

 

But Yvonne says Talixo's unique 50-50 split of taxis and limousines, and the ability to pre-book is what separates them from competitors. "Most taxi companies have one type of vehicle, private hire pre-booking or standard taxis. We're the only one that does both types of service," she said.

 

"There's a legal distinction between taxis and private hire vehicles, so with limousines there's no regulation on pricing. So we can essentially pass those discounts onto the customer.We do hostels, hotels and events. But our focus is the B2B and corporate markets."

 

Yvonne thinks that there is a difference in the quality of service customers can expect to experience when using Talixo. "For most people, it's a commodity: there's no difference from one (company) to another; but we have a difference in quality," she said.

 

"With black cabs In London, cab drivers study for years to know the streets and have a great deal of knowledge about the area. But with mini-cabs, you don't, really. 

 

"In Berlin there is a test, but a lot of drivers pass it easily and it's not very thorough - you can forget about it very quickly. 

 

"When we select drivers to work with, we inspect each vehicle, make sure that the driver speaks German properly and that he or she presentable. We want to ensure they have a good knowledge of the streets of Berlin and are friendly. We have a certain quality standard that we want to be able to guarantee and we feel we have the edge on customer service."

 

Talixo has three separate categories for their limousine service: economy, business and first-class and each has different perks, standards and prices. If you order a limousine to pick you up from the airport with economy or business class, the driver will wait for you for 45 minutes from when the plane lands. Talixo monitors the departures and arrivals from travel databases. With the first-class service, you have a 90-minute window. 

 

Booking a limousine anywhere in Berlin city with business or economy class has a 10 minute waiting window. With first class, that is extended to 30. The price-range for a city transfer is EUR 10-40 in economy, 30-80 for business and 60-120 for first class. For the taxi service, the price range is EUR 4-50. Talixo currently has about a 50-50 split of bookings for their taxi bookings and limousine service. 

 

Yvonne says that the have a "proven" concept and they hope to expand to other cities in Germany. But they chose to start in Berlin because of the ease of business. "We looked at the US, the UK, Singapore and Paris," she said. "But ultimately the decision was Germany, due to market maturity and language, ease of setting up and expansion.

 

"We are looking at expansion right now and hope to be able to get fleets into other cities. The plan is to roll out across Germany and into the main cities...  we have new bookings every day, but we need more people!"

 

Yvonne, Sebastian and Dominik have high hopes for Talixo, but the inspiration behind its foundation was largely down to the MBA program at INSEAD. With a booming economy in Germany, the Talixo team are confident they can expand. The next time you need to catch a cab in Berlin, try their mobile page @ https://talixo.de/en/.