Budapest taxi market disrupted? Uber lures drivers away

Uber’s recent launch in Budapest has led to significant bonuses for drivers, with some earning up to HUF 100,000 for completing 30 rides in the first few days. Many drivers have switched from Bolt and Főtaxi to the American ride-sharing service provider, drawn by the promise of competitive offers after the initial three-month commission-free period. In response, Bolt has reduced its commission from a variable 12-25% to a fixed 9%, but may need to adjust further.

Uber luring away drivers from other taxi service providers?

Source: depositphotos.com

For the first three months, Uber drivers can operate without any commission, giving Uber a significant edge in the Hungarian market. Industry insiders say the American company’s initial fleet largely consists of experienced drivers who switched from competitors, mainly Bolt and Főtaxi, Economx reports.

Elek Nagy, the owner of the Főtaxi group, noted that while F-Mobilitás Ltd. connects them, Uber and Főtaxi are competitors in the passenger transport market. Főtaxi’s large airport fleet has notably decreased at Ferihegy (Budapest Airport) in recent days.

Bolt’s usual commission is 25%, which can be reduced to 12% by meeting specific ride targets. The American ride-sharing service provider’s current offer of zero commission for three months is met by Bolt’s fixed 9% rate, but Uber is prepared to lower it further if necessary, potentially to 6-7%, or extend the commission-free period.

Uber offers huge bonuses to drivers

Founded in San Francisco and managing its European operations from Amsterdam, Uber enhanced its Budapest launch by offering drivers bonuses of HUF 50,000 for 10 rides on launch day and HUF 100,000 for 30 rides over the weekend. Some confusion arose as drivers expected the launch at 1 PM, while the app started assigning rides earlier in the day.

Many taxi drivers now see the American company as highly attractive. Despite Bolt’s previous success, such competition generally benefits the new entrant, with passengers reaping the rewards. Opinions differ on whether Uber or Bolt offers a more competitive product. Elek Nagy admitted that neither Főtaxi nor Bolt’s apps can track passengers as precisely as the American ride-sharing company’s if they deviate slightly from their coordinates.

A reshuffle in the market

Photo: Főtaxi/FB

Uber’s launch involved intensive preparations, with many drivers completing administrative tasks in the three days prior. During this period, they received the necessary stickers for the yellow taxi livery and picked up their rooftop signs. While 3,000 drivers began the registration process out of a total of 6,500 registered taxi drivers, the American company also incentivised passengers by offering a HUF 5,000 discount on their first three rides.

Competition is heating up. With Taxi 5 potentially introducing another major player, Gett, the rivalry in Budapest’s taxi market could escalate further. The market’s capacity to sustain so many players remains uncertain. Zoltán Metál, president of the National Taxi Association, remarked on Uber’s return by predicting a market reshuffle, where stronger companies grow larger while medium and small firms struggle to survive.

Read also:

• New international operator to join the Hungarian taxi scene
• Breaking: Uber available in Budapest again