It seems like Uber’s troubles just keep coming.
Estonian start-up Taxify launched this week in the heart of the United Kingdom. After previously concentrating on emerging markets in eastern Europe and certain parts of Africa, the service has signed up approximately three thousand private hire taxi drivers by simply acquiring a taxi company that already holds a taxi service license known as City Drive Services.
To promote the London launch, its citizens were offered a fifty percent discount on fares until the end of September, as well as suspended surge pricing. Such an offer may spark a pricing war with Uber, although Uber is a far larger and more well-known company. The Estonian ride service company is certainly the David in this story, occupying only twenty-five cities worldwide as opposed to Uber’s roughly six hundred.
But Taxify’s edge in this competition for the wheels of London lies in its far cheaper price points. Its lower cost business model allows its customers to pay far cheaper fares and allows drivers to be more fairly compensated. The service also allows for both electronic and cash payments for its rides, something that Uber does not allow.
Admittedly, this doesn’t give Taxify a massive edge; but it is a considerable one as they enter the market. Taxify will also face competition from black cabs such as Addison Lee, Gett, and Hailo. Additionally, Uber has 40,000 drivers and 3 million users in London, who take roughly one million trips a week.
“We will always be cheaper than Uber,” Taxify founder and chief executive, Markus Villig, said in a telephone interview with Reuters.
This certainly seems to be a rough time to be at Uber, between the firing of Uber’s co-founder and chief executive Travis Kalanick in June and last week’s naming of Expedia Inc. CEO Dara Khosrowshahi to lead the company. Not to mention the multiple other ride sharing companies sprouting up to compete with Uber in other parts of the globe.