This popular Baltic rideshare app is planning global expansion with a better experience for riders and drivers
Hailing from the Baltic tech hub of Tallinn, Taxify has been steadily gaining ground against players like Uber and Lyft in the global competition for riders.
Co-founded by CEO Markus Villig, Expansion Manager Martin Villig and CTO Oliver Leisalu in 2013, Taxify (available on iOS and Android) is now working in 23 cities across Europe, Africa, and Mexico. Like the big US-based players, they operate as a platform where users can easily sign up, order, and pay for rides in their city. In each location, they work with either registered taxis or private operators depending on the regulations.
Speaking with Geektime at TechChill in Riga, Martin Villig outlines his company’s transition into new markets. “We have a really lean expansion model,” explains Villig, noting that they do not hire any high-level managers when they start off in a new country but instead focus on junior level people for operations. Since the platform can basically be replicated from place to place from their central office, these on the ground employees can concentrate on training the drivers and verifying their documents.
Villig believes that having a solid support staff in the country where they are working is an important element of how they are able to attract drivers. Then, of course, are their commission rates, which are roughly half of Uber’s, coming in at only 15% per ride.
“I think the problem for Uber is that they charge too high commissions,” he tells Geektime, expressing skepticism that Uber will be able to maintain their high rate over the long haul, especially as companies like his can come in with more attractive offers. “We think that Uber sold to their investors that they could maintain their high business model.”
One of the hardest parts of entering a new market he says is educating the population about the concept of ridesharing. While it may sound funny to folks who live in a rideshare flooded market like NYC or another similar spot, the idea of moving to ordering rides from private drivers is still a bit of a weird idea.
Even for a Tel Avivian who is used to ordering a cab through Gett and done a fair amount of hitchhiking, my first time in an Uber was a bit strange. The key for Taxify, says Villig, has been going into markets where another provider has already laid the groundwork and has operations, thus removing the need to introduce the concept.
However, it seems to be picking up steam, as Villig tells Geektime that with their €2 million in funding to date, they are seeing 20% growth month over month. He chalks this success up in part to being better to their drivers than Uber.
The company also seems to be getting love from the riders as well. Speaking with residents of Riga for whom the ride app is a boon since Uber is not an option, they love the fast service where the longest you will have to wait for a cab to show up is six minutes. More importantly, it gives users a way to keep the drivers honest with ratings and customer service that was sorely lacking previously. From my experience here in Riga, the service has been excellent with friendly and professional drivers. It should be noted that in Riga, the company only works with regulated drivers in line with the law. This could change in the near future, says Villig, as new legislation could be passed.
As with all of the ridesharing companies, working with private drivers who are not regular cabbies has its drawbacks when it comes to labor concerns. Private operators are responsible for their own insurance, maintenance costs, and other responsibilities, with companies like Taxify and Uber acting only as a lead platform.
Villig says that in working with private drivers, it is intended to be a part-time gig. Where I express concern about the loss of worker protections, he makes the point that in certain places like their new operations in Africa, they are offering drivers there a new way to make an income that was previously not available to them. “You need to change your proposition for the market,” he remarks on how the approach to the issue of working with drivers and the opportunities vary from place to place.
Fair enough that folks in Nairobi may not necessarily have the workers’ rights that you would find in parts of Europe. He adds that if unregulated drivers were permitted in places like Sweden, which is dealing with a large number of incoming migrants that lack the language skills to work, driving for Taxify could allow them to make a living and pay taxes. Supposedly a win-win.
As we edge closer to the era of the self-driving car, and away from the idea of vehicle ownership, there is no doubt that these platforms are going to become an increasingly more important part of the way we get around within cities. The question that seems perhaps more relevant at this point is whether companies like Taxify and some of the other smaller players will be able to challenge Uber in markets outside of the US.