Taxify Trails Uber Into Paris Market After London Setback

Taxify, an upstart European rival to Uber, said on Thursday it had begun offering services in Paris despite regulatory uncertainty governing the status of private-hire cab companies that compete with licensed taxis.

The Estonia-based company, which is backed by Chinese ride-hailing giant Didi Chuxing, operates in 25 cities in central and eastern Europe as well as Africa, where it has made inroads in the past year against Uber. Its basic appeal to drivers is that it charges a 15 percent commission on rides compared with the 20-25 percent that Uber charges, which can translate into cheaper fares for passengers. Last month, however, Taxify was forced to halt pickups just three days after entering the London market when local regulator Transport for London (TfL) accused the company of failing to obtain a proper licence to operate. Taxify said that unlike in London, ride-hailing apps are not required to receive licences to operate in France.

"London is quite unique in its licensing environment," Taxify Chief Executive Markus Willig said. "In Paris, and in most cities of the world, there is nothing needed for us to book rides. Only the drivers need to have an appropriate licence." It said it had signed up 5,000 licensed operators - mostly private hire but also some taxi cab drivers - to its online ride-booking platform in Paris ahead of entering the market.

Nonetheless, the regulatory standing for ride-hailing apps remains uncertain in France, which has seen a crackdown against Uber - including the arrest of two senior executives there.

A 2014 French law on taxis and chauffeured services makes it a criminal offence to organise taxi services with unregistered drivers and sets restrictions on software that enables customers to book cabs on the street. Taxify said in a statement: "The regulatory environment regarding the VTC (private hire) service is evolving. Taxify is fully committed to complying with all regulations."

In London the transport regulator contacted Taxify via email two weeks ago and pledged to proceed with licensing discussions, Willig said. It was the first time Taxify had been contacted by TfL after five months of attempts to do so, he said.

"We are doing everything we can to get a licence. Unfortunately it is going extremely slow," Willig told Reuters. "We hope to have some progress in the next few weeks."

Over the next three to six months the company plans to expand to more cities in Britain and France, he added.

© Thomson Reuters 2017