Taxify gets edge over Uber with M-Pesa payments

Cardine Njeri from Taxify shows taxi drivers how to operate the app. PHOTO | ANTHONY OMUYA | NMG
Cardine Njeri from Taxify shows taxi drivers how to operate the app. PHOTO | ANTHONY OMUYA | NMG 

Online taxi hailing company Taxify has included M-Pesa mobile money payment option on its platform, gaining a potential competitive advantage over market leader Uber.

Taxify says that M-Pesa is now available to customers using its mobile application on iPhones. The company also plans to roll out the service to users on Android phones.

The Estonian company, which has a presence in 20 countries, says that the introduction of mobile money was part of efforts to adapt to local market conditions.

“We are always on the lookout on how to intensely localise the experience of our application across the cities we operate in,” said Nairobi City manager Alex Mwaura in a statement.

Up to 19 million Kenyans registered on M-Pesa consider it a safe and convenient means of transacting, which they use regularly to send money and make payments.

Uber, Kenya’s leading online cab hailing firm, only gives customers the option of paying by cash or by credit card.

Informal payments

Customers that want to pay through mobile money do so informally by sending the funds to the drivers directly.

Taxify is following in the steps of Little, the Craft Silicon owned taxi-hailing company which was the first to integrate M-Pesa payment into its application. Sendy, a mobile-based courier service, and has also integrated M-Pesa into its application.

Both Sendy and Little are backed by Safaricom #ticker:SCOM.

Mondo Ride said in an interview it is also planning to launch an M-Pesa payment option. Little chief executive, Kamal Budhabatti, told the Business Daily that M-Pesa accounts for about 30 per cent of the company’s ride payments.

Customers also have the option of loading money to through M-Pesa to a “Little Wallet” for later payment of their own rides or on behalf of their family and friends. M-Pesa is also integrated into the driver’s application on Little.

Uber told the Business Daily that it was still looking for a payments solution that would complement cash across the markets where it operates.

“We are looking for payment options that will serve riders and our partners across multiple countries that we are in,” the company said in a statement.

Primarily cashless

Uber is primarily cashless but when the company came to the developing world, it had to adapt, introducing cash payments for the first time in Kenya and India.

Mobile money is a key plank of the strategy to a cash-lite economy in countries like Kenya.

Data from the Communications Authority data shows that the value of mobile transactions in the quarter to June 2017 was Sh692.2 billion, driven by the increasing ubiquity of mobile money.

Competition in the local taxi-hailing business is heating up as companies fight for both customers and drivers.

Taxify recently introduced demand-based pricing, also known as “surge” pricing to its system as it sought to encourage drivers to go online during times of peak traffic.