Taxify takes on Uber in ride share market

Australia’s first real rival to Uber is ready to the hit the streets.

Taxify’s Australia country manager Samuel Raciti. Picture: Hollie Adams

Fast-growing European ride-sharing company Taxify is launching what it says is Australia’s first real Uber rival, kicking off with heavily discounted rides today in a bid to dethrone the controversial US giant.

Uber has had a tumultuous 2017, enduring an executive shake-up and complaints of a toxic workplace culture as it continued to burn through investor capital. Taxify’s Australian country manager Samuel Raciti told The Australian his start-up, Europe’s fastest growing ridesharing company, was launching in Australia in a bid to be different.

Taxify, founded in Estonia in 2013 by then 19-year-old high school student Markus Villig, takes only 15 per cent commission from its drivers, in a market where competitors take between 25 and 30 per cent.

“There’s only really been one player here in Australia, and so because of that monopoly it’s quite easy for us to break in,” Mr Raciti told The Australian. “We’re really looking forward to it, Australians are really ready for this.”

According to Mr Raciti, the company is heading towards $US1 billion revenue next year, and already operates in 20 countries worldwide claiming over 4 million customers.

“We’re different to our competitors in that we started as a taxi platform helping taxis come together on a single app, so riders could access them easier. Then ride-share legislation started catching up with what the world wanted, so we shifted towards that.

“We’re a tech company in that our focus is on innovation in our technology and strengthening that, versus being an operations-based business. We run a lot leaner in terms of our costs.”

According to Mr Raciti, the company has more than 4000 Sydney drivers on its platform and is offering a 50 per cent discount to all riders for a minimum of one month initially. He said drivers would still receive their full commission, so won’t be affected by the discounted fares.

The start-up is launching today in Sydney but will be soon be launching in other capital cities.

“We’re going through the processes in Victoria at the moment, pushing for a launch in Melbourne this side of Christmas,” he said. “We’re also considering other cities and states at the moment.”

Drivers are not locked into Taxify’s platform so could, for example, drive for both Taxify and Uber. But, Mr Raciti said, given drivers received a greater share of the fare than with Uber, they were incentivised to use Taxify. They had other benefits too, like the ability to set a radius of where they wanted to pick up fares from. The company also provides a 24-hour fully staffed customer service channel for riders. “I’ve been here for about six weeks now and I’m incredibly impressed by the culture here,” Mr Raciti said.

“We’ve maintained our start-up mentality, which is all about keeping it simple, running things lean, and making sure there are great conversations happening between all stakeholders in the business. You’re not limited by hierarchy, which is an amazing thing.”

Mr Raciti revealed Taxify was looking to raise another investment round in the first quarter of 2018.

In August 2017 the company announced a strategic partnership with Didi Chuxing, the world’s leading mobile transportation platform, to grow market share in Europe and Africa.

Didi Chuxing, the world’s second highest valued private tech company, is the ride-sharing firm that effectively forced Uber out of China, buying Uber’s China ­operations earlier this year.

It has also invested in Uber rivals Lyft, Grab and India’s Uber rival Ola.

Mr Villig said: “Sydney is a huge and vibrant city — and we are excited to launch in the Australian market. We are confident that locals are looking for an alternative ride sharing option, and Taxify is committed to providing both riders and drivers with what they want.

“We have based our business model on fairness and transparency, and it is because of this that we have had so many drivers sign up to Taxify in such a short space of time.”

Minister for Trade and Industry Niall Blair said the NSW government was delighted Taxify had chosen NSW for its Australian debut.

“This massive investment for our state will see thousands of drivers registered with the app, a huge win for the economy and consumers alike,” Mr Blair said.

“This is a sign of confidence from a major player that overseas investment in NSW is in more demand than ever before.”