Taxify launches in London, acquiring a cab firm to scale and discounting prices
London’s long-suffering Black Cabs have yet another competitor to deal with, alongside Gett, and Uber.
Estonian start-up Taxify has launched this week in the UK capital, after previously concentrating on emerging markets in eastern Europe and Africa. It’s signed up 3,000 private hire taxi drivers by simply acquiring a taxi company which already holds a licence, City Drive Services. Paris is also mooted as its next city.
To promote the launch, Londoners are being offered a 50% discount on fares until the end of September, alongside suspended surge pricing. That may spark a price war with Uber, but Uber is much bigger and better known, having 40,000 drivers and 3 million London users. Taxify also only in 25 cities globally compared to Uber’s 600.
What Taxify does have is a lower cost business model, allowing passengers to pay cheaper fares and also letting drivers retain more of the profits. Taxify takes a 15 per cent commission on rides compared to the 20-25 percent Uber charges drivers. It also accepts cash as well electronic payments from riders, unlike Uber. Taxify allows drivers to create a defined radius for pick ups, meaning they don’t need to stray too far from home, which may well appeal to some drivers.
The startup has built what it calls an “all-in-one solution for taxi companies”. Basically it’s a booking system with a consumer-facing app.
Traditional taxi companies use Taxify’s web-based dispatcher and fleet management systems to manage their back-end and unite under Taxify’s consumer facing app to stay competitive against expanding networks like Hailo and Uber. That then lowers Taxify’s costs, allowing them to charge less.
Taxify’s platform replaces the expensive platforms offered by older firms, allowing taxi firms to automate their workflows and start getting orders via the Taxify app at a fraction of the cost of custom solutions. It then charges the cab firm a low monthly fee of about 12-15€ per driver per month.
Taxify’s other focus is its rapidly growing Local Partner programme, which allows entrepreneurs to set up their local Taxify business using a franchise model and become a city manager on a revenue share model.
The startup claims to have over 2.5 million customers, and recently announced a strategic partnership with Didi Chuxing in China.
Markus Villig, founder and CEO of Taxify, said: “London is a huge and thriving marketplace for private urban transport, and we’re excited to launch here.”
Taxify originally emerged in 2014 with a seed round which was funded by investors from the so-called “Skype Mafia” in Estonia.
The launch comes as Uber struggles with legal setbacks, workplace harassment scandals, driver protests, the firing of co-founder and chief executive Travis Kalanick and bitter disputes amongst its board. Last week it named Expedia Inc CEO Dara Khosrowshahi to lead the company.