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How Mytaxi killed Irish taxis and now owns the future

Success in Ireland and new €5 cancellation fee point to winner-takes-all capitalism

The ascent of Mytaxi has not been the cause of untrammelled joy for drivers either. Photograph: Alan Betson

Hailo arrived on our shores in 2012. It was billed as a simple app that allowed you to book a taxi using your smartphone and pay using your bank card. It was convenient for passengers and attractive to taxi drivers because it brought them more fares.

It caught on quickly and by 2014 it was boasting a nationwide presence and claiming that Ireland was the first country in which it had reached this milestone. The following year it expanded its reach in Ireland even further by signing up Hackney cab drivers outside of Dublin.

The following year it merged with its rival, Mytaxi – owned by German car giant Daimler – to become “Europe’s largest e-hailing company with 100,000 divers in 50 cities in nine countries.”

By 2017, one-fifth of the Irish population had its app installed on their phones and Mytaxi could be safely said to own the taxi market in Ireland.

Then in September that year came a €2 booking fee which did not go down well and and last week saw the introduction of a €5 cancellation fee.

So, in a few short years we have gone from a position where taxis in Ireland were free to book (it was called standing on the street with your hand out) and free to cancel (it was called walking away) to a situation where we have one dominant player that is in a position to charge customers for both these functions.

It’s worth noting that taxi fares – which are regulated and, in theory at least, reflect the vicissitudes of the business – have not come down. Drivers also continue to pay Mytaxi a commission on every fare.

Valuable information

Not only have Mytaxi managed to push their costs on to their customers and dictate terms, they have in the process made us surrender a wealth of valuable information about ourselves and our habits via the app which we all willingly installed on our smartphones.

When you weigh all that up against the convenience of ordering and paying for a taxi via your phone, it’s not exactly a bargain.

The ascent of Mytaxi has not been the cause of untrammelled joy for the drivers either. What used to be a living has been reduced to “a gig”. Working as a driver for Mytaxi is close to the definition of what is euphemistically termed “non-standard employment” complete with a near-total asymmetry of power in favour of the employer. Taxi drivers have always been largely self-employed but via powerful representative bodies they were able to exert a degree of influence over terms and conditions in the industry.

The out-and-out winner is Mytaxi, soon to be rebranded as Free Now – reflecting a not-entirely unsurprising lack of any corporate sense of irony on behalf of its owners, Daimler and BMW.

The success of Mytaxi in Ireland and its €5 cancellation fee is a mundane but at the same rather excellent example of the winner-takes-all style of capitalism that is increasingly the defining feature of the giant corporation spawned by the internet.

The one that is currently in focus is Mytaxi’s biggest rival, Uber. It listed on the New York Stock Exchange last Friday with a valuation of $75 billion (€66.9) despite never having made a dollar of profit. Its shares have since fallen heavily but as yet no one is panicking.

Struggle to gain traction

Like Mytaxi, Uber doesn’t have any particularly amazing technology. There is no “Google algorithm” that locks competitors out. Rivals to Uber and Mytaxi spring up all the time but the scale of the incumbents is such that they struggle to gain traction.

The same goes for Amazon, Facebook, eBay and the other household names of the internet. They are utterly dominant in their markets and have immense power and this is what makes them attractive to investors. The internet stopped being about technology quite some time ago and is now all about size and the ability to control and above all monetise what comes next. It’s about owning the future.

Nobody is buying Uber shares because of the projected profits from its ride-hailing business. They are buying into its ability to shape the next big technologically-driven inflection in how we live our lives – the advent of self-driving cars. And with that will come the opportunity for truly vast profits for Uber and its peers.

If Mytaxi can force us to accept a €5 cancellation fee as the price of progress the mind boggles when it comes to the ways they will come up with to willingly extract cash from us via autonomous vehicles.

The only hope is that in the fullness of time a new start-up will appear on the scene offering people and alternative to Free Now or Uber. It will have to be radical. Perhaps it will offer you the chance to hire a car and driver for a fixed price on the street for short journeys using only your hands. There will be no booking fee or cancellation charge and you will not have surrender any information about yourself. Not even your name. It will be called a taxi.