Tallinn’s taxi companies see slow business at this time of the year as the reason behind ridesharing service Taxify’s announcement that they were lowering prices. They also call Taxify’s option to lower prices an unfair competitive advantage.
Taxify announced on Thursday that it was going to lower their private drivers’ base fare by 10%. In its press release, the company explained the move by saying that it wanted to help solve the transport problems of Tallinn’s residents. Plenty of young people didn’t want to own a car, and a lot of families were giving up their second cars as well. Their prices made it more affordable to use ridesharing services instead, the company said.
The managements of both Tallink Takso and Tulika Takso are unhappy with the situation, and point out that rideshare services had an unfair competitive advantage. Tulika’s Mati Saar told ERR on Thursday that despite Taxify’s marketing claiming that people were switching from private cars to rideshare services, what was really taking place was a shift in the taxi business.
Services like Taxify were operating in a legal grey zone, as their operations were based on private drivers de facto offering taxi services, but without an according license. While the Riigikogu was debating regulation, the business continued without any of it.
Rideshare drivers didn’t have to pass any training, didn’t have to buy meters, and because of it their monthly costs were lower. That made it possible for Taxify to lower prices.
The real reason for their lower prices, Saar suspects, is the typically slow taxi business between February and April. The shrinking number of rides forced them to lower their prices, in order to get more people to call them, and not others.
Tallink Takso’s Tõnu Uusmaa joined Saar in his demand for regulation. There were unfair advantages for rideshare services also when it was about entering the market, as a driver could just take up work without the kind of obstacles a taxi driver faced.
The price pressure on the cheapest taxi companies is currently the highest, as they are already operating with a very small margin, and can’t lower prices much more.
Editor: Editor: Dario Cavegn