Taxify launches in Sydney at 10am today and is offering users a 50 per cent discount for the first month. It plans to roll out in Melbourne before Christmas.
The app, founded in Estonia, has had significant success in Europe, Central America and Africa, with four million users across 20 countries and is tracking at $1 billion revenue, compared with Uber’s $6.5 billion.
Unlike Uber, which takes between 22.5 per cent and 30 per cent commission from drivers, Taxify currently takes just 15 per cent — which it says allows it to offer cheaper rides to customers.
Its biggest issue is that there are only 4000 drivers registered in Sydney so far. Australia Country Manager Samuel Raciti told news.com.au that may mean users have to wait “three to four minutes extra” for a ride, but stressed that would be worth it in the initial period with half-price trips.
Taxify is hoping more drivers and riders will register once the app has launched.
It has also promised not to apply “surge” pricing in the initial launch period.
Surge pricing is when riders are charged extra during busy periods, encouraging more drivers to get out on the road and meet the surge in demand. Users are informed of a surge before the book a ride.
Taxify will bring in surge pricing for public holidays including New Year’s Eve, but it will be capped at 1.5 times the usual rate.
“We are Europe’s biggest ride-hailing app and the world’s fastest growing,” said Mr Raciti.
“We’re coming in backed by success internationally.
“Australia has a very strong monopoly when it comes to ride-share. There are no challengers.
“When you run into a monopoly, you’re stuck into the rate.
“We know Australia is ready for it.”
The app, which looks very similar to Uber, was launched in 2013 by Markus Villig, who was just 19 at the time. It started life as an aggregate platform for taxi companies before building up its own fleet and coming to resemble other ride-sharing apps.
In August 2017, Taxify announced a strategic partnership with Didi Chuxing, the world’s leading mobile transportation platform.
Mr Villig says the business model is based on “fairness and transparency”, ground on which Uber has been criticised. The ubiquitous ride-hailing app has faced claims of unethical conduct, including secretly operating in cities where it was banned and former CEO Travis Kalanick stepping down after he was filmed screaming at a driver.
Taxify recently launched in Paris, home to the popular Chauffeur-Prive, but was forced to halt operations in London after just a few days in September for breaking rules on private hire operators.
Transport for London has also revoked Uber’s licence after concerns over its treatment of drivers and its approach to reporting violent incidents.
After a 40 per cent price cut by Uber in Nigeria in May, drivers took to the streets in protest before organising on WhatsApp for hundreds of drivers to switch to Taxify.
Taxify claims it gives drivers more control, allowing them to create a defined radius for pick-ups, so they don’t need to stray too far from home or their known area.
New South Wales Minister for Trade and Industry Niall Blair said: “We’re delighted Taxify has chosen NSW to debut its services in Australia — this massive investment for our state will see thousands of drivers registered with the app, a huge win for the economy and consumers alike.
“This is a sign of confidence from a major player that overseas investment in NSW is in more demand than ever before.”