Taxify, an Estonian start-up, is about to go head to head with Uber in the highly competitive taxi-hailing market of London. It also has Paris in its sights.
On Tuesday, the company declared that it would introduce services across London after hiring 3,000 private hire taxi drivers, who have been evaluated to make sure that they meet local licensing requirements.
It signifies a major move forward for Taxify after a series of missteps by the Silicon Valley giant already allowed it to make advances in some cities in eastern and central Europe and Africa.
It infiltrated a crowded market in London where famous black cab taxi drivers and private hire taxi firms of the city like that of Addison Lee compete with Hailo, Gett, and other ride-hailing applications. Uber has 3 million users in London, who take 1 million trips a week, and are driven by 40,000 drivers.
Taxify is just a fraction of the size of Uber – being available in under 25 cities as opposed to Uber’s presence in almost 600 cities around the world -but operates on a lower cost business model, enabling passengers to pay marked-down fares and letting their drivers keep a bigger share of profits.
On Monday, the company announced that it would take 15% commission on rides booked through its platform online, as compared to the 20-25% that Uber charges in London. Also, unlike Uber, Taxify said that it would accept cash and electronic payments as well from riders.
“We will always be cheaper than Uber,” said Markus Villig, the company’s founder and Chief Executive.
In an attempt to stabilise the firm, it fired its belligerent co-founder and chief executive, Travis Kalanick in June and last week declared Dara Khosrowshahi, Expedia Inc’s CEO to manage the company.
In a phone interview, Villig said that the Taxify aims to develop into five more cities, including Paris, by year-end after being bolstered by recently announced financial backing from China’s DiDi.
China’s largest ride-hailing firm, DiDi Chuxing, is aiming to turn up the heat on Uber, the ride-sharing pioneer thru a string of deals with regional rivals in Europe, Africa, Southeast Asia, the Americas, and the Middle East.
“Ride-sharing has been monopolised by Uber,” said Villig. “Now it is getting clear that in most markets there will be major competitors.”
“Competition is a good thing as it raises service levels across the board,” said an Uber spokesperson in a statement.