Co-founder of Taxify: we want to become a leader on the Ukrainian market of online taxi

In 2016, several major applications of online taxi became interested in the Ukrainian market. So, in the summer he began to work the largest global player in this market is an American Uber in the fall we went to the Russian “Yandex”. At the same time trying to conquer the market of our country has made and the company Taxify — Estonian startup, founded by brothers Marcus and Martin Williami in 2013. However, if the company is not formed, and they curtailed their activities in Ukraine. Two years later, again Taxify has announced the release of the Ukrainian market. talked with co-founder of the platform, Martin William to find out why the company did not work then and how she plans to conquer the market of Ukraine now.

Than your company so interested in the Ukrainian market?

Ukraine is a big market, a population of over 40 million, many large cities. Our goal is to become a leader in Europe, so our launch in Ukraine is quite logical.

In 2016, you went and came from Ukraine. Why did this happen? What went wrong?

Then we had a little different scheme — we ran through partners. The moment was strong competition in the country almost simultaneously came Yandex.Taxi and Uber already have been local Uklon. Our partners felt that they lack competence in the transport sector, so you should wait for a better time. Now the moment has arrived, and we entered the Ukrainian market with its own team.

That is, these two years you looked closely at our market? Counted? Why only now returned?

First, left Yandex. In addition, while we were a small company, and we have had so many opportunities for investment. Last year we received a major investment from a Chinese company Didi Chuxing and the German automaker Daimler. And now we have more opportunities to independently go to a new country and city. Another point — in that period were in the priority Africa. For example, in Hungary, Georgia and Malta then we also went on a partnership model. If partners want to try — please. But not everywhere did it. So now we already are ourselves.

How much are you currently investing in your enter the Ukrainian market?

While the company is gaining some market share and some specific figures we don’t want to call.

In any Ukrainian cities do you work and what plan?

We always start with the capital and later, when we gain a certain market share, expanding to other cities. In principle, we are interested in all settlements with a population of 100 thousand or more.

What are the priorities you will be guided when choosing the next town?

In addition to the size of the city, we are guided by and other parameters. In particular, the level of competition in regulation, cost of service, availability of a sufficient number of drivers. We calculate how effectively we can create added value, and based on this decide in which city to go.

Do you have plans before the end of the year to be revealed in even some Ukrainian city?

This year, only Kiev. We start working on a launch in several major cities of Ukraine. Where and when it will launch — we’ll let you know later.

In large Ukrainian cities now has several large players and many small ones. How are you going to compete?

Our main value we want to become the best platform for drivers. In our model, we usually start with the driver. We want it to be profitable to us they could make more money. Our Commission is usually lower than the competition, and this is one of our competitive advantages. Why can we take a smaller Commission? Because our operations are very efficient, and we have high costs within the company.

And what is the Commission you?

The average is 15-20% in some cities may be even smaller (for comparison, the Uber Commission in Kiev is 25% — ed.).

What share of market you want to occupy Ukraine?

Our goal is to be the leader here, as in other markets in Europe. Somewhere we achieve this faster somewhere longer, depending on the competition. But the ultimate goal is to be a leader in Europe, we want to win a share, which would have provided us the championship. For example, in Lithuania, it took us four years to win the leadership position.

Due to which this has been achieved?

Here we return to drivers. When drivers see that they can earn more and they don’t have to sit and wait for their orders. When they feel that the company cares about them, that the Commission is reasonable, it has a positive effect on the level of service they better serve passengers.

In your case, the drivers are the key to business success. For example, I used Taxify Latvia, and it was a good experience, and my friends have used the service in Kiev and wrote a complaint on the social network for unsatisfactory service. You can influence it? How to solve this situation? One can make a perfect app, and one angry driver in a broken Car can always scare away users from the company…

Yes, I agree, to get the best drivers is a priority task for any platform. But even more important ranking system — after each trip, the passenger gives the driver a score. And if the driver’s rating falls below 4.5 out of 5, his account is automatically locked. And we are conducting an internal investigation, trying to understand the reason for such a situation. Including communicating with dissatisfied customers to find out what was wrong. We then call the driver to discuss the circumstances with him. If we are talking about unimportant things, and the driver is ready to change, we give him a second chance. Sometimes they need after such a situation re-undergo training. But if the violation is repeated again, we block this guy forever.

And there were such cases in Ukraine? Blocking forever?

Yes, of course. We have in every city there are times when you have to say goodbye to the drivers, if they can’t follow our standards. I would also like to add that in Ukraine we have a rule: cars should not be older than 2003, and also we have a taboo on the Lanos.

I recently spoke with the driver of one of your competitors, he was told that in this company the system is built so that single drivers get cheaper orders, best orders — some, OOO, which a lot of cars. And you how the system works?

Our system she doesn’t favour. We give the order to the nearest driver who has logged into your account.

By the way, quite often there are situations when during a major event (concert, football match) the car can cause impossible. How do you solve this problem?

This is the taxi business. There are peak hours, which depend on the time of day and days of the week, weather conditions, events in the city. At such times, the demand for cars increases by 10-15 times. These bursts of demand is very short — in such a short period it is impossible to dramatically increase the number of cars in the Park. Of course, we encourage our drivers bonuses, so they traveled at rush hour and worked when in high demand. But to ensure it is simply impossible.

It turns out that the only way to increase the price in the period of the jump in demand. And there are two options. First — people are price-sensitive will wait until the demand subsides, and leave for less money. And those who are willing to pay and who really need to leave, can do it in any case. It is also a motivation for the drivers. For example, we have drivers who go only at that particular peak time. That is, for them it is not the main and additional earnings. They connect to the system when you go to the city center to work and when evening come home. Or they can travel only on weekends or during big events. And we are always open to new drivers, including those who are not aimed to do it in their main job.

And there are some minimum how much drivers have to go to the month?

No. They decide for themselves.

Uber driver doesn’t know where he was going, when he receives the order. In Taxify, too, right?

As far as I know, all the major platforms, the driver does not see the destination before the passenger boarding. Why is it done? If the passenger is going somewhere where you don’t want to go taxi drivers, then it will be simply impossible to cause the machine will refuse. Similarly, we hide, and the method of payment — cash or cashless. There are some drivers who prefer cash only, and passengers could be more convenient to pay by card. All that the driver sees during checkout is the point where you need to pick up passengers. And the destination and method of payment are opened only when the passenger is getting on the car.

By the way, you have statistics in Ukraine prefer to pay — cash or cashless?

In Ukraine, as in most Eastern European countries, prefer cash.

Tell us a little about the formation of tariffs. For example, I was faced with the fact that, hailing a taxi at the same time in one destination, but using different apps, has received the difference in price of 30 UAH.

Tell how it looks from us. There is the basic cost of feed and the price per kilometer. Next, the system looks at the demand and number of available machines we have in the area. If the demand is greater than the number of machines, then the program itself increases the cost by 10-20%. What is it for? First, as I said, to attract drivers at peak hours. And secondly, so that people have a car when they’re really needed. It’s simple market logic. According to the same scheme work, for example, hotels and airlines.

That is, to answer your question, why the two shows so different value, we can say that two different engines may use different coefficients. For example, different companies have at this time in this area can be a different number of cars. Accordingly, one less — and the higher the ratio.

My last question is to the market. In many countries, services like yours are trying to restrict, and even ban. How do you see the solution to this problem, is it possible to satisfy all parties participating in the market, users and government?

We see that there are markets where legislation is very liberal, mostly countries in Eastern Europe and Africa. There are more traditional markets with strict laws, and there are very regulated markets. For example, France and the UK have certain rules, but there you can find ways to work legally such services. And markets in Italy, Germany, Hungary, the Scandinavian countries are too heavily regulated, there is the traditional system of taxi and things like ours, there is almost impossible to come by. In such markets there are a number of licenses that they sell in a year, and usually it is low relative to demand. What is happening in this market? Taxi service becomes a luxury. And people are using it very rarely, two or three times a year, the cost of one trip in a taxi may be 30 euros. But in markets such as Ukraine, where the law is liberal, and the market is open, taxis are available, even students can take a taxi.

In traditional markets we are trying to work with regulators. We are trying to convey that the taxi system is not so complex that it is not necessary so to adjust. And that letting the market system such as ours, they will get only advantages for residents of the city for which the service will become more affordable. In addition, it solves municipal problems. The problem with Parking in the centres of large cities. If the cost of a taxi becomes available, it encourages people to leave their private cars at home and arrive by taxi. Accordingly, reducing the need for Parking spaces.

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