Téo is generating a lot of headlines in Quebec this week. Some are claiming that this is a failure for all of Quebec, and that Quebeckers haven’t come to grips with the risks of entrepreneurship. That’s nonsense.
Téo did everything right. Launched on Nov. 26, 2015 on a test basis, its unique electric taxi service became broadly available in the greater Montreal area the following April.
The mobile app and website were well designed, and its fleet of Teslas, Nissan Leafs and Kia Souls stood out from the city’s rather drab-looking taxis at the time (Montreal has since upgraded most its taxis to a new design with a huge “Bonjour” written in bold type). The experience of Téo lived up to the promise. I rode with the service several times between Montreal’s Trudeau airport and the downtown core: It was always pleasant and the experienced drivers were always courteous.
Téo was not a gift of God, as its name might suggest, but it had a lofty goal: transform Montreal’s taxi industry by making its environmental liability a strong core value for its everyday actions, and using technology to improve users experience. Its name and brand identity, were smart, distinctive and consistent with the promise of a personalized experience. The name stood for Transport Écologique Optimisé (Optimized Ecological Transport) and its branding was consistently applied at all brand touch points.
It said all the right things about the importance of a social and green economy. It created an ecosystem with key stakeholders in Québec, ranging from Hydro-Québec, Quebecor, Quebec’s Transport Ministry, and the City of Montreal. It got all the visibility it could ask for, in part because of its founder Alexandre Taillefer—the entrepreneur who co-founded Stingray Digital, was a “dragon” on Québec’s version of Dragon’s Den, and more recently saved the magazine L’Actualité. The company also won accolades for its corporate social responsibility, being awarded the Novae prize in 2016.
Early on, it struck a partnership agreement with Vidéotron to add signage on its vehicles and wifi-enabled digital screens throughout its fleet that featured personalized content depending on their profile and destination. It allowed for unique brand activations, such as the launch of Quebec singer-songwriter Alex Nevsky’s album on Nov. 11, 2016. On that day, all Téo taxis played his music, riders got gifts, and some rode with the musician who then told his stories on social media.
Téo was not a branding failure. But even if the brand and its marketing may have been sound, the business proved unsustainable. After all, Quebec has never had a shortage of taxis and Uber disrupted its industry the same way it did in many countries. I always wondered how the business model made sense. I wasn’t alone. Guillaume Lavoie, a former Projet Montréal city councillor and an expert on the sharing economy, put it this way to the Montreal Gazette: “It was written on Day 1 that it would end this way. Téo Taxi was a different model, and it was one that could not work. You can’t have the same revenue potential as the industry with expenses that are several times higher than the industry standards.”
Quebec has many success stories and hugely promising start-ups. Montreal-based Luxury Retreat was sold to Airbnb in 2017 for $200 million. Another Montreal-based company involved in cloud-based POS systems, Lightspeed, raised $116 million last year in preparation for its IPO. Others, like Montreal-based Breather, are building a global network of meeting spaces.
The taxi business needed disruption. Téo was not the solution but there are plenty of other sectors where Québec entrepreneurs can take risks, deliver value and reap the rewards. Téo is dead, long live Téo!
Eric Blais is the president of Headspace Marketing, a consultancy that helps marketers build brands in Quebec.
Photo: Benoit Rochon