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Ride sharing app Yandex pays drivers guaranteed €5-6 per trip

A Yandex.Taxi-liveried taxi in Russia or Ukraine.
A Yandex.Taxi-liveried taxi in Russia or Ukraine. Source: Sergei Shakhidzhanyan/TASS/Scanpix

Ride-hailing app Yandex.Taxi pays its drivers a minimum of €5-6 per ride regardless of the overall trip price, it has been reported, although the company denies this.

According to daily Eesti Päevaleht, the company is doing this as a way to rapidly increase its market share, in particular targeting competitor ride-hailing app Taxify.

''We've exceeded all expectations in the two months we've been in operation in Tallinn,'' said Yandex.Taxi chief Aram Sargsyan.

Whilst Yandex.Taxi has indeed only been operating a short time in Tallinn, its entry to the market here was announced almost two years ago to the day.

''We've risen to number two in the ride hailing app market there and are challenging Taxify for the top spot,'' Sargsyan went on.

The company is currently based in Moscow but is soon to open an office in Tallinn, Sargsyan said.

Burning money?

Competitors have however argued that Yandex.Taxi is simply burning its own money in Tallinn simply to enter the market quickly, and will not be able to sustain its benefits to drivers and the market as a whole and will gradually start reducing these.

For his part, Sargsyan says this is not the case, and denies that the company is 'dumping' on the market and subsidising drivers, and claimed that it brings customer benefits such as a 50% discount to passengers, benefits which Sargsyan says that the competitors also offer.

The reason for its cheaper rides is due to technological advantages, according to Sargsyan.

"We use drivers more efficiently and we distribute rde requests to them more efficiently than the others,'' he said.

''Our map application calculates optimal routes for trips and avoids congestion, which permits lower fares and thus more affordable rides," he went on.

Yandex.Taxi competitor to Uber in Tallinn, but ally in Moscow

Yandex is Russia's largest technology company with a reported turnover of nearly 100 billion rubles ($ 1.7 billion) last year.

However Yandex.Taxi is an independent subsidiary, though ultimately owned by Yandex, and in fact cooperates with global ride sharing app Uber, which is also under the Yandex umbrella in Russia.

In Tallinn Yandex.Taxi and Uber are competing for market share, however. Market leader Taxify is an Estonian-born ride-hailing app which has expanded globally to include Paris, Lisbon and cities in Romania, Mexico, South Africa and other locales. It operated briefly in London before being forced to cease its activities by Transport for London. Another ride-hailing competitor in Tallinn is Taxigo.

Editor: Andrew Whyte

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