Founders of Taxify, Martin and Markus Villig, have expanded to 18 countries and involved €2 million in venture capital after just three years in business. The brothers are prepared to talk about their findings and experience on what is a suddenly a bubbling taxi market with a surprising degree of candor.
Going back to the very first days of Taxify, a lot of people welcomed you with open arms, including established taxi companies like Tulika and Krooni. Next thing you know, everyone's at war with everyone. What happened?
MARTIN: We started our business in Estonia three and a half years ago, and our initial strategy was to unite all taxi companies under a single platform and become the Baltic leader that way.
After the first year, however, we realized that demand far outweighed the number of good taxis available, while we couldn't find a good cooperation model with existing companies. This culminated in cooperation with individual drivers and with private drivers six months later. Demand is higher than the number of available taxis everywhere.
What exactly did the taxi companies find disagreeable? Were they being cut out of commissions «because of you»?
MARTIN: Commissions were not the problem. They were offered a very sensible discount on Taxify bookings, which they sold to their drivers at a 50 percent mark-up.
The only problem was that we both realized – us and the taxi companies – that their value was dropping weekly. Taxi companies add no value to the service in the eyes of the client in a situation where Taxify can maintain the same level of quality with its automatic orders system and quality control.
The taxi business has increasingly become a public transport service – the client no longer cares about the logo on the bus, rather it is the price and quality of the service. People choose operators whose cars are closest and cheapest.
... and by now we are in a situation where almost every taxi driver has several competing apps open at the same time, with the old-fashioned meter still ticking in the background and the voice of dispatch coming from the speakers. It all seems disorganized. How far are things concerning legislation for ridesharing?
MARTIN: As concerns the bill to legalize ridesharing in the Riigikogu, the thing that matters to taxi drivers is flexibility – so that everyone could have both a meter and taxi markings to pick people up from the street or taxi stops, and also be able to accept fares using apps and call centers.
So that all drivers would have the same options, with the only difference concerning measuring devices that must be used and who can use public transit lanes.
Ridesharing in itself is no longer necessary as a part of the law – taxi regulations will become so much simpler that everyone can register as a driver in a few days and start working after electronic background checks have been carried out. Parallel regulation of two different services should become history.