Taxi-booking app Hailo has said goodbye, The Straits Times has learnt.

The London-based company has been operating in Singapore for two years but ceased operations on Tuesday.

The closure comes a week after a similar app, Karhoo, shut its entire business - in Singapore, London, New York and Tel Aviv - after running into financial difficulties.

Observers say the exits are not surprising, given that the ride-hailing industry can support only one or two dominant firms.

The Hailo app was launched here in October 2014 under a partnership between Hailo and SMRT Roads, a subsidiary of transport firm SMRT, and took on earlier entrants such as Uber and Grab.

Third-party taxi apps

WHO'S STILL IN • Uber: Offers private-hire cars and taxis. An UberPool option also allows commuters heading in the same direction to share a ride at cheaper fare rates. • Grab: Offers private-hire cars and taxis, along with a car-pooling option called GrabHitch. • MoobiTaxi: Offers taxi bookings only. WHO'S OUT • Hailo: Ceased its taxi booking services in Singapore on Tuesday. • Karhoo: An aggregator app allowing commuters to select a taxi or private-hire car based on criteria such as distance and price. The start-up wound up its business last week, even before it was launched here. • Easy Taxi: A taxi-booking app that left the Singapore market in August last year.

Like its competitors, the app matched commuters with taxis nearby, using the mobile device's GPS technology.

SMRT and Hailo confirmed to The Straits Times yesterday that taxi bookings via the app ceased on Tuesday.

Hailo said in a statement with SMRT that it had recently completed a merger with another taxi app, My Taxi, and the new joint venture will focus on expanding its presence in Europe.

My Taxi is owned by car giant Daimler, which purchased a 60 per cent share in Hailo, according to reports in July.

Assistant Professor Yang Nan of the National University of Singapore (NUS) Business School's strategy and policy department said that ride-hailing apps must have a large network of drivers and passengers.

Asked about why Hailo and Karhoo were exiting the market, he said: "An app that's falling behind in the competition for riders or an app that just enters the market would only deliver worse rider experience with lower vehicle availability and longer waiting time.

"Undoubtedly, this will lead to shrinking rider base and further attenuates driver participation."

SIM University economist Walter Theseira said the ride-hailing market in Singapore was still developing when Hailo launched. "There's a possibility of gaining a big enough market share so somebody is forced to buy you out. It's a viable strategy," he said.

Brazil-based Easy Taxi pulled out of Singapore in August last year, saying that it wanted to focus on its business in Latin America, the Middle East and Africa.

Of Hailo and Easy Taxi's exits, Dr Theseira said: "They call it refocusing their resources, but they are probably just not willing to lose money here any more."

NUS transport researcher Lee Der Horng said: "With fewer competitors, Grab and Uber now have to think hard about how to turn their money-burning businesses into money-making ones."

Despite their large funding, ride- hailing start-ups are apparently bleeding money as they battle over market share through subsidies for drivers and customers.

Uber reportedly lost at least US$1.2 billion (S$1.7 billion) in the first half of this year.

Cabby Armstrong Ho, 48, who used Hailo, said: "The company gave out a lot of promotional discounts when it started, but when they ceased, passengers also stopped making bookings with the app."

The Land Transport Authority, which regulates third-party taxi apps, said it had been informed by Hailo of its withdrawal from Singapore.