Uber may run the world of ridesharing in terms of popularity and market spread, but it has lately seen fierce competition from a relatively late starter in the sharing economy – Estonian company, Taxify.
While China’s DiDi Chuxing bests Uber in terms of sheer size and revenue, Taxify is competing with Uber’s African market share in pricing – making it the preferred alternative ride-hailing app for both partner drivers and riders when it comes to competitive rates market leader Uber has struggled to match.
Founded in 2013, Taxify launched its Nigerian operations in November 2016, taking on a saturated field of 14 Lagos-based ridesharing services, dominated by international behemoth Uber. Lagos is not only the city with the most ridesharing apps in all of Africa, it also has more vehicles per head and more traffic chaos per kilometre than perhaps any other city of comparable size.
Taxify’s market penetration strategy was obvious: go after Uber and its users in a way Nigerians respond best to: discount pricing. For the same and even better quality of service, save for the app’s early problems with card processing on its platform, Taxify wooed prospective drivers and riders with a simple proposition: offer drivers higher commissions and riders lower fares.
The high-low maneuver paid off. Perhaps a little too well. For one thing, Uber was forced to respond by slashing fares by 40% in May, a move unpopular with its Lagos drivers – leading to a strike action. The longer term impact of price competition introduced by a viable challenger effectively led to a market duopoly – with Taxify becoming the #2 e-hailing app in Nigeria.
A Quartz report on the business rivalry between Uber and Taxify has Taxify’s Lagos operation manager, Uche Okafor, saying “We treat driver-partners better so that they can offer high quality service to customers.” The service’s 15% commission compared with Uber’s take of between 20-25% has, according to the report helped “offset its own 40% fare cut in competition with Uber Lagos.”
And on and on the rivalry has gone throughout the year, sometimes with Uber on top, other times with Taxify in the lead. Good overall for the customer. Though one thing both services equally botched was their response to the Christmas fuel shortages. Customers complained that drivers were mostly unavailable, the one eventuality riders were let down on in a year that has seen the fortunes of both competitors rise or fall with how well or how quickly they got users to their destinations.
(By Toks David)