Short ride, long-term appeal? Taxify, the ride-hailing company, is branching out into eScooters in Paris (with plans for more European market rollouts), a change to its existing business model — one borne of necessity, it seems. Doing so allows the company to tailor its options on a market-by-market, city-by-city basis, says CEO Markus Villig to PYMNTS. The new scooter-sharing option, he says, illustrates the flexibility of the ride-hailing model across modes of transport and varying regional regulations.
In the shared economy, specifically in ride-hailing, one size does not fit all. Depending on where one looks (and where they ride), traffic patterns are different, modes of transport on offer may vary and, of course, regulatory environs may shift from one market to another.
Thus, in some markets, a taxi makes sense. In others, two wheels make all the difference. All in all, business model changes may be in order.
To that end, Estonian ride-hailing company Taxify announced earlier this month that it has launched a line of eScooters in Paris, called Bolt, which will roll out to other European cities (and beyond). Markus Villig, CEO at Taxify, told PYMNTS that expanding into eScooters shows the strength and flexibility of Taxify’s business model.
“We are not necessarily restricted to ride-hailing,” he told PYMNTS, looking beyond taxis and private vehicles. “In the five years since we launched, we have learned a lot about how people move around. The players that have taken a standardized approach have often met competition from local players who are paying close attention to product localization, and who know the local regulatory environment as well as the local consumers.”
The ridesharing space is not new, the CEO noted. However, Taxify’s business model has provided a source of competitive advantage as the company has set its sights on Europe and Africa — where a broader array of transport offerings can help solve transportation issues, especially in larger cities, or where there are regulatory hurdles in place that render the company unable to bring its traditional ride-hailing offerings to market.
Villig told PYMNTS that in the countries and continents in which Taxify competes (spanning 25 countries and 50 cities), “we are the local player, and that has helped us to grow really fast and become the market leader.”
The company was on the receiving end of a $175 million financing round, announced in May, with participation from Daimler, which led the round, Korelya Capital and others. Villig told PYMNTS that the funding has been earmarked for technology and expansion efforts.
One way of gaining critical mass is to offer a commission structure that is up to 50 percent lower than the competition, which means drivers do not pay as much to Taxify as they might to competitors. Villig noted that the company’s technology stack helps save costs, which are passed along to the consumer in terms of cheaper rides, and passed along to the drivers in the form of lower commissions. The fact that drivers reap some benefits, the CEO noted, may result in some goodwill and loyalty on the part of customers toward the Taxify brand, as those end users take on how the company treats its drivers.
Branching Out
Beyond the traditional offerings already in-app (i.e., which allows customers to request the aforementioned taxis or private drivers), and the eScooters, Taxify has branched out into other options as well.
By way of example, six months ago, Taxify launched motorcycle taxis in Kenya — the taxis are known as bodas — and Villig said they “will likely be the bulk of the rides we do in a year. Looking at the traffic patterns in Nairobi, it’s not hard to understand why people would choose bodas over cars.”
In another example, he said, that same flexibility can be seen with eScooters, per the aforementioned news out of Paris.
“One in five Taxify rides in Paris is less than three kilometers,” he told PYMNTS. “That’s a perfect distance to cover with an electric scooter. We are already serving millions of customers on our ride-hailing platform, so providing them with another option without having to go to another platform is a huge advantage.”
Thus, he stated, the company can expand its relationship with existing customers, even as it gains new users. Paris has been busy establishing a charter for good conduct that partly focuses on safety and fostering adoption of eScooters, he said.
“We were the first ride-hailing player [to] start offering scooter rental, although closely followed by Lyft and Uber, who also had announced their plans earlier,” said Villig. “That’s where we have an edge over providers that are solely focused on eScooters — we provide options within a single app. We also have a lot of experience and data from ride-hailing, so we know about patterns of movement within a city and where to place the scooters for highest utilization.”
The move to offer eScooters offers a bit of a new wrinkle from the traditional business model, said Villig, who represented it as “a new chapter” for Taxify.
“In ride-hailing,” he said, “we don’t own the cars and the drivers are not our employees. With eScooters, we, in fact, own the assets. Down the line, we could easily see ourselves being a platform for different eScooter and other micro-mobility providers. But as the ecosystem is still very young for scooters, we saw that it would make sense for us to start off with our own product.”
Looking Forward
The company will still keep its sights trained on Europe and Africa, but, as Villig noted, “we don’t think that ride-hailing is a winner-takes-all business. So, we’ve helped to introduce competition in Australia and Mexico.”
He said the company has expanded beyond capitals and the largest cities in its served markets to cover smaller cities that still see significant demand, and stated that “it’s quite feasible to offer the service in a city of 100,000 people.”
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