Uber rival Taxify plans to launch services in Australia, promises good offers

Sydney Traffic — Morning rush hour traffic crawls along a freeway in western Sydney December 15, 2008. Reuters/Tim Wimborne

Uber rival ride-sharing app Taxify reportedly plans to launch services in Sydney before the year ends. The ride-sharing company has promised to pay drivers more.

Taxify is a fast-growing Estonian company that operates in 20 countries. The Sydney Morning Herald reports it will charge drivers a 15 percent commission on fares. That is comparatively lower than Uber's cut, which is 20 to 25 percent.

For Taxify, charging drivers lower commissions meant it could offer a price advantage for customers of up to 5 percent in the longer term. As a result, they have higher loyalty from both drivers and customers, according to spokesman Pavel Karagjaur.

Although Uber has obtained a stronghold in the ride-sharing market here since its launch in 2012, Taxify is not bothered. "As long as you make a good offer in the market, [it] doesn't really matter how big the market leader is or how many competitors exist in the market," Karagjaur said.

The company was founded only four years ago and recently launched in Paris, where it became the most downloaded app. It also plans to expand to Melbourne and Brisbane.

Wanted: new drivers

Taxify is looking for a country manager for Australia. It is also searching for an operations specialist to train and coordinate "thousands of new drivers.”

But analyst believes it would be difficult for the company to appeal to customers and drivers alike. Morningstar analyst Gareth James said this is due to Uber's dominance. "To have a competitive advantage, you need to have a network effect whereby everyone uses your website," he said, adding that people will choose Uber as they believe it's the largest ride-sharing application.

180 Days of Change

Meanwhile, Uber has launched new features as part of its "180 Days of Change" campaign that aims to give drivers more flexibility. This means users will now be charged extra if their driver has to travel more than eight minutes, on average, to reach their location.

The extra fee is subject to change based on the market, according to The Verge. It is one of changes released under Uber's "180 Days of Change.”

In addition, users will now be charged if their driver has to wait more than two minutes for pickup, a feature that has been piloted in New York and Phoenix. Uber will adjust cancellation fees based on time and distance.