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Wednesday, June 29, 2022

Taxi app Taxify Meets Resistance in Finland Launch

Earlier this year we gave a second look at the Estonian startup Taxify, which was doing some serious changes into the Estonian way of ordering a taxi. At the time of the article, Taxify’s statistical growth had been impressive to say the least, amassing 5,600 new users in a span of three weeks, including 100 new drivers. This prompted them to launch the service in Latvia and plans to expand across all the Baltic countries were under no secrecy.

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However, back then I dared not ask Taxify founder Markus Villig whether we’d see the application in Finland, where the taxi culture has for long dwelled under a nasty stigma of monopoly, high cost and taxi queue cock-fights, because I feared he’d say “we’ll see” accompanied by a polite laughter.

Maybe I should’ve asked after all: Taxify has now, in fact, arrived in Finland, and it hasn’t wasted time creating a fuss about it.

Helsingin Sanomat published an article on the subject featuring Taxify a couple of days ago. A readthrough pretty much summed up the following: the Finnish Taxi Association isn’t too fond of Taxify’s arrival, and their technical expert was quick to say the app will have troubles making it in Finland.

Somehow, this didn’t surprise me.

Matti Vaininen, the fresh CEO (at least he will be next October) of Taxify’s Finnish subsidiary company, Taxify Oy, told us Taxify’s landing was indeed bumpy, but with the initial dust settled down, things are looking good.

“First we tried to partner up with a Finnish contact during the spring, but then Markus [Villig] decided to found Taxify Oy to make things run smoother,” Vaininen told us in an interview about a week ago. “The new company registered on July 18th, after which we entered a heavy sales phase, trying to acquire as many drivers as possible. We’ll be launching as soon as possible, hopefully next week.”

Vaininen says Taxify will aim to be the only taxi ordering service in Finland to do advertising for regular consumers. That means we could be seeing Taxify ad’s spread across Helsinki in the near future.

“It is Vital to have users and drivers, which why we will make sure to spread the news of our arrival”, Vaininen says.

A careful approach

One message he was keen to repeat, was that Taxify didn’t come to Finland to take away anyone’s jobs, but rather help drivers to acquire more customers by operating and partnering with existing taxi companies.

It’s clear why this needs to be emphasized: Finland’s taxi business has been a unchanged and rather old-fashioned for quite a while; a mobile app from Estonia represents an ever more tech-oriented global world, a change which might take some time to get used to.

In response, the taxi association will be releasing an app of their own, which unlike Taxify, will charge users the fee of a text message for each order they complete (even though the app doesn’t use text messaging in the first place). The difference is, that the union’s app wouldn’t cost the drivers anything, whereas Taxify would charge drivers a fixed fee of €20/month, with a €1 commission for every acquired customer, the plus side being the free-to-use model for users.

In general, Taxify would operate just like in any other country, with the exception being the ride’s price, which will always remain the same.

Jukka Kuusisto, president of the Helsinki taxi drivers, bolsters their fearlessness towards the app, as they don’t see ordering a taxi via application, compared to the traditional way of ordering a taxi, as any kind of threat.

“If someone wanted to create some real competition, they would have to build all the same ordering methods we already have. If a simple application would be sufficient, we could just as well dismantle our entire call centre”, Kuusisto said in an interview with HS.

Well, we can only wait and see in order to confirm that.

In other news, Vaininen porvided us with fresh Taxify growth stats: from the 1st of July ‘till 31st, there’s been 89 000 Taxify orders in Tallinn alone, of which 9% were cancelled, and 76%, or some 70 000 orders were finished. It’s a 15% overall increase, which Vaininen explains as Tallinn reaching its growth limits. In comparison to the situation last spring, increase has been up to 40%.

Currently Taxify operates in Estonia, Latvia, Lithuania and Finland, with expansion operations taking place in the Netherlands and Greece, soon to be followed by Belarus, Norway and Sweden.

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Raf is a tall, lanky Finn wandering in the UK academic landscapes. With an MA in Psychology (University of Aberdeen) he's taken his penchant for brain studies a step further by embarking on a MSc in Neuroscience at the University of Edinburgh. Long-time lurker and contributor at AS, always hungry for fresh story leads in Tech/Espionage/the Absurd.

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