Uber vs Taxify - who'll win this war?

Post here consumer reviews of things, companies, services, deals and that you know are the very best in Naija under its category.
Comment
User avatar
eMade
VIP VIP
Location: Abuja
 

May 23rd, 2017, 10:18 pm

Uber has been around for some time. But recently it seems they are hitting a rock. Here is Taxify - get a ride in Lagos. Is Uber foreign while Taxify it s Naija?

Who will win? Or can they compete in a healthy way in this same lean market?

Please share...

Learn more about ✓ VIP Members: https://www.bestnaija.ng/61848 ✓ Referral: https://www.bestnaija.ng/62508
Konji
Newbie
 

May 24th, 2017, 7:44 pm

uber-vs-taxify.jpg
Nigerian Ridesharing Price Wars: Uber VS. Taxify
Uber and Taxify are about to start courting the hell out of Nigerians and we are totally here for it. When Uber launched in Nigeria, we practically had no e-hailing transport companies. I mean, there was Easy Taxi, but Uber managed to push them out fairly quickly.

So when the romance of free and discounted rides was over, we were left with no alternatives to slightly expensive Uber. So in November last year, when Taxify launched, it seemed like an obvious respite from the high price. Taxify launched just after Uber's two-day driver strike in Abuja, with prices that were 40% lower than Uber prices, with a 15% increase in earnings for drivers. Sure, they also had iffy drivers and weird looking cars, with uneven distribution in locations, but it was early days. The chances of a user choosing Taxify over Uber, however, fell on availability.

But 10 days after they launched, Taxify upped its prices. They reduced the 'discount' to 25%, in a move to boost driver-partner earnings and still remain remain cheaper than the competition. They maintained this for a while, before another price increase. The Uber-Taxify war was over for the time being, but we imagine that Taxify went to work recruiting more drivers because after a while, the availability of cars significantly increased.

Today, Uber has upwards of 5000 cars, but Taxify is fast catching up. And on Wednesday, Taxify reignited the price war, again, to boost their rider and driver loyalty, slashing their fares by 32% - and promising drivers bonuses. Prior to this time, its usual base fare was priced at ₦350, ₦81 per KM and ₦8 per minute. With the price reduction, its base fare is now priced at ₦200, ₦55 per KM and ₦5.5 per minute.

On Thursday, Uber countered by slashing its prices by 40% - and promising its drivers temporary earning guarantees until this change has been fully effected. An Uber driver was nice enough to break down the earning guarantees for us: complete 30 trips and get an extra ₦10,000; complete 40 trips and get an extra ₦20,000 etc. They also lowered their acceptable cars from 2008 and above rides to 2006.

Uber is no stranger to price wars, their long-drawn-out price war with Didi Chuxing in China, ended in August 2016 in a deal that saw the Beijing-based startup acquire the American giant, but it doesn't look like that is the case here.

Who wins?
That's the big question. The short term winners of a price war are usually the consumers - and maybe the drivers, if the companies keep their promises. But the consumers could also be the long term losers.

Eventually, both companies will need to do what's best for business - and that may not be price slashes that are cutting into their revenues and favour riders more, at the expense of drivers and partners. And for Uber, it's more obvious than not, that this is a strategy to stifle Taxify.

And with cheaper prices, which come with very lax car acceptance rules, can a rider complain about a car not being in top condition? If the drivers and partners become unhappy with these lower fares (Cars become less available, riders could get less safe), what happens then? We can guess: the companies will hike their prices to favor them, because without drivers, there is no company. This is the result in Kenya when Uber reduced fare rates.

Eventually, when Uber and Taxify and whoever else is in the market decides to do what is best for their individual companies, the riders will be left holding the bag - and paying out of it.
http://www.konbini.com/ng/lifestyle/nig ... vs-taxify/
Comment
  • Information
  • Online

    Users browsing this section: No members and 0 guests