The taxi app wars have claimed a victim.
Hailo, a London-based startup, has pulled out of North America in the face of intense and entrenched competition from companies such as Uber Technologies Inc., Lyft Inc. and GetTaxi Inc., the company said Tuesday.
In a surprise move, founder Jay Bregman has left the company. He was expected to speak later this week at a tech conference in London. Mr. Bregman didn’t immediately return requests for comment.
Hailo was founded in London in 2011. It became one of several popular apps used to hail black cabs and recently planned to expand the service to private-hire vehicles, or the equivalent of livery cabs in New York City. The company recently said it would expand to Singapore.
CEO Tom Barr said the decision to pull out of North America was because of the “astronomical marketing” costs “required to compete.” In an e-mailed statement, he said that “profitability for any one player is almost impossible.”
Mr. Barr said: “We are very sorry for the impact on our colleagues who will leave the company and are doing everything we can to help them with their future careers.”
A spokesman for the company said that about 40 people would be laid off.
Mr. Barr said that Mr. Bregman “by his own admissions has taken the business to the level he can.”
In a 2013 interview with The Wall Street Journal, Mr. Bregman, referring to Uber, said there was “plenty of room for more than one in the market.”
Meanwhile, Israel-based competitor GetTaxi Inc. said it was growing.
“We definitely understand Hailo’s decision to pull out of the U.S. market, it’s a competitive space,” said Rich Pleeth, GetTaxi’s chief marketing officer. “However we’re currently experiencing 3000% growth in New York.”