Challenging an Industry: The Rise and Fall of Téo Taxi

Description

Challenging an Industry: The Rise and Fall of Téo Taxi: Abstract

Challenging an Industry: The Rise and Fall of Téo Taxi is a case study by Linda Bensalah, Luciano Barin Cruz and Marie-Renée Lambert.

In 2014, with Uber disrupting the taxi industry worldwide and Montreal’s industry, hampered by obsolete rules and regulations, in dire need of a revolution, the founders of Téo Taxi hoped to offer a fresh alternative. They proposed a unique business model based on an electric-only taxicab fleet, decent wages for drivers, and profits reinvested in the local economy.

Reinventing an industry and fighting strong adversaries such as Uber would however come at a huge cost. The case recounts the story of a young company striving to reach breakeven without compromising the social and environmental values at its core. Despite its best efforts, in January 2019, Téo Taxi filed for bankruptcy, leaving 450 drivers jobless.

The case invites students to identify the factors that led to Téo Taxi’s bankruptcy and propose strategies that could have helped to achieve breakeven, stabilize the business model, and ensure sustainability.

Teaching objectives

The case was developed to familiarize students with the challenges of socially driven for-profit organizations trying to balance profit and mission. The Téo Taxi example can help students gain an understanding of the criteria for assessing various scaling strategies and identify the most relevant ones for a young innovative company trying to reach breakeven and sustain its business model.

Main themes covered

• Scaling up
• Scaling out
• Scaling deep

Concepts and theories related to the case

• Scaling up
• Scaling out
• Scaling deep

Additional information

Teaching notes are available for teachers only. Please contact the HEC Montréal Case Centre.