Business Will Uber’s arrival shake up Prague’s taxi market?

14-08-2014 15:08 | Jan Richter

Prague has become the first city in central and eastern Europe where the Uber car hire service is available. With only a few drivers recruited so far, the mobile-app based service is testing the ground. But once fully launched, will it transform the city’s notorious taxi scene?

Photo: official website of the Uber companyPhoto: official website of the Uber company After several months of speculation, the US-based company Uber launched its mobile app-based car rental service in the Czech capital on Wednesday. It started offering its basic Uber Black service, allowing its clients to get a ride from professional drivers with upscale limousines.

“As we have only launched the service now, it might take longer than five minutes for a car to arrive,” the daily Lidové noviny quoted Uber’s head of international expansion Patrick Studener as saying. “But we are getting more and more drivers, and within a few weeks, we’ll have a 24-hour service,” Mr Studener said.

Uber faces tough competition in Prague. There are now 15 major taxi companies registered in the capital with around 4,200 vehicles. In recent years, competition has pushed down prices which now start at around 15 crowns, or 0.72 US dollar, per kilometre.

Uber charges 40 crowns for pickup and 23 crowns per kilometre. Its rates are similar to those of major Prague taxi firms such as AAA, City Taxi, Tick Tack Taxi, and others. But the US firm also faces competition in its own mobile app field – the Prague-based Liftago service, among others.

However, some analysts say that Uber’s main competitor will most likely be Tick Tack Taxi, a firm launched last September by Student Agency, a major player in Czech transport, as both companies are aiming at the high-end segment of taxi services.

However, Student Agency owner and CEO Radim Jančura told the daily he was not concerned about Uber’s arrival. “I don’t think they will last long here because their business is in breach of the law,” Mr Jančura said referring to Uber’s claims that rather than a regular taxi service, the company offers a “platform for connecting people”.

The Czech Association of Taxi Concession Holders meanwhile said they disapproved of Uber entering the market in the capital, refusing to say whether they were planning any protest action similar to those staged by taxi drivers in other European cities after their business suffered because of the Uber app.

Several cities around the world have in fact banned Uber altogether. Most recently, Berlin moved against the app on Thursday, banning it over passenger safety concerns. But in Prague, City Hall officials have welcomed Uber’s arrival.

“We support any idea that will increase competitiveness in taxi services. We believe it will have a positive effect on the market. Such apps are one way of combating dishonest taxi drivers,” City councillor Lukáš Manhart told Lidové noviny.

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