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Uber pushes into the taxi industry: Is TAZ Stuttgart opening the door for the platform to take over the market?
For a long time, the traditional taxi industry and the ride-hailing service Uber stood irreconcilably opposed. On one side, the taxi companies with fixed tariffs and strict regulations, on the other, the American tech company that attracted customers with flexible pricing and a global platform, repeatedly standing out for not adhering to legal guidelines. Accordingly, protests, fines, and legal battles have defined the past years.
But now it seems that both sides are converging – at least in some German cities. Stuttgart and Munich are becoming testing grounds for a new partnership that promises opportunities but also raises questions.
Freenow in November
The partnership entered into in November 2024 was seen last year as a "blueprint" for other German cities. According to TAZ, this is a win-win situation. Passengers now benefit from better taxi availability, shorter wait times, and the reliable and widely known app of the mobility service provider available throughout Germany. According to Iordanis "Danis" Georgiadis, more than 830 of the approximately 950 taxis in and around Stuttgart are mediated through TAZ.
Alexander Mönch explained at the time: "This is a real game changer. We combine the best of both worlds: the digital reach of Freenow and the local expertise of the Stuttgart taxi center. Passengers benefit from more taxis and even better service."
Now Uber as well
In Stuttgart, taxis can now be booked via the Uber app. The cooperation between Uber and the Taxi Auto Zentrale Stuttgart (TAZ) is considered a novelty in Germany.
“We have an incredibly large number of business travelers here, but also a lot of gastronomy and lifestyle,” says Christoph Weigler, head of Uber in Germany.
TAZ views this pragmatically. Georgiadis sees the advantages primarily in improved transparency for drivers and passengers: “The drivers, but especially the customers, benefit,” says Georgiadis.
“It's about reaching new target groups.”
Dispute in the Munich Taxi Cooperative
In Munich, Uber has been offering taxi operators annual contracts since March 2023. About 200 drivers have accepted this. However, not everyone welcomes this step. Critical voices within the industry warn that taxi operators could become financially dependent.
Recently, there was an uproar in the Munich Taxi Cooperative. Taxi-München eG clearly opposes being co-opted by platform operators like Uber & Co. and denies any collaboration. When it became apparent that some members, holding responsibilities in the cooperative's organs, were cooperating with Uber, the alarm of board members Thomas Kroker and Patrick Nothhaft was great. (we reported)
Can Taxis Collaborate with Uber?
The fear of a creeping takeover is not unfounded. Uber has been criticized for years for undermining the traditional taxi market. Through lower prices and an aggressive expansion strategy, the company had put pressure on the taxi industry in many cities worldwide. But now, Uber is taking a conciliatory approach.
"We have been working for a long time to cooperate with taxi centers," says company spokeswoman Larissa Schröder.
In fact, Uber opened its platform to taxi companies throughout Germany in June 2024. "We want to be a partner in the industry," emphasizes Weigler. Digitalization offers new opportunities that taxi companies could leverage.
At the Federal Association of Taxi and Rental Cars e.V. (BVTM), developments are being closely monitored, according to managing director Michael Oppermann. The association's representatives are urgently warning that Uber could dictate conditions in the long term. The TMV (Taxi and Rental Car Association) was even more direct, calling for the Uber app to be banned.
"1,700 illegal rental cars in Berlin, illegal work, social insurance fraud, and endangerment of customers...from the perspective of the honest, medium-sized taxi and rental car industry in Germany, there has long been a need for action," said TMV's managing director, Patrick Meinhardt.
Risks – but also opportunities?
For Uber, cooperation with the taxi industry means primarily one thing: legitimacy. The company was controversial for a long time, but now its collaboration with traditional taxi centers could improve its image. At the same time, Uber is tapping into a new customer group—passengers who previously consciously avoided the app.
For the taxi industry, the cooperation is more than just a balancing act. The digital Uber platform could, of course, lead to more bookings and better utilization for taxi operators. On the other hand, there is a risk of becoming dependent on the American corporation. Initially, the fees to be paid to the platform operator are low. However, it is known from existing contracts with rental car companies driving for Uber that the platform operator deducts up to 30 percent of the revenue.
What's next in Stuttgart?
Of course, each taxi driver can decide for themselves whether to cooperate with Uber. However, the taxi operator must also be aware that their dependency on Uber is certainly greater than that of the platform operator on the individual taxi operator. Moreover, they are working with a global corporation that has not previously distinguished itself by fairness or social behavior but rather by ruthlessly exploiting legal loopholes and exerting immense pressure on the taxi industry. Price wars are not expected in Stuttgart initially, Georgiadis concluded.
Content automatically translated.
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