11 Dec 17

Taxify takes on Uber in Australia

European ride-sharing supplier Taxify is coming to Australia, where it will do battle with Uber for market share. With around 4,000 drivers already signed up, Taxify is ready to launch in Sydney this week. 

Media focus on Uber detracts from other success stories in the shared mobility space. Taxify was founded in 2019 by Markus Villig, a 19-year-old Estonian. Following spectacular growth, his company currently has 100,000 drivers and over 4 million customers. It already has more than 50% market share in the three Baltic states and in Kenya and Nigeria. By next year, it is set to break the $1-billion mark in turnover.  

Behind the success is a two-pronged approach. Firstly, Taxify specifically targets markets where there is a ride-hailing monopoly, thinking customers would welcome an alternative (in more cases than not, the monopolist is Uber). And secondly, Taxify only takes a 15% commission, offering its drivers a greater profit margin (compared to Uber, which takes a cut of at least 25%). 

Taxify also charges riders – i.e. the end customers – less for its service than Uber. To sweeten the deal even further, Taxify will offer riders a 50% fare discount in its first month of operation in Australia. 

Virtual monopoly
"There are so many countries around the world where Uber is a monopoly with 18-19 per cent market share and no one is that happy with the service," Mr. Villig said in an interview with The Australian newspaper. "There's a gap for a platform that treats drivers better and doesn't treat them like numbers."

Uber has about 82,000 active drivers in Australia, and has had a virtual monopoly on the ride-hailing market Down Under. But the company's reputation has been tarnished by a series of accusations at its American HQ and beyond with regard to a pervasive culture of bullying and sexual harrassment. 

Data breach
Uber also had to admit to a data breach which compromised the data of 57 million users worldwide (including 1 million Australians). On top of that, the taxi sector in the Australian state of Victoria filed a complaint against Uber for operating an illegal taxi business. 

In what seems a pre-emptive move with regards to Taxify's market entrance, Uber last week announced it would increase fares in order to pay its drivers more. 

Didi Chuxing
Taxify has already confirmed that after taking off in Sydney, it aims to launch in Melbourne as well before Christmas. 

Taxify has benefited from a major investment for an undisclosed amount by Chinese ride-sharing market leader Didi Chuxing, and is in the midst of a further fundraising effort. The company expects its current staff of 400 to expand to around 1,000 within a year.  In Australia, it intends to employ up to 50 staff within the next half year. 

Authored by: Frank Jacobs