More passengers, more revenue: Flexible taxi fares prove themselves in Hamburg.

Flexible fixed prices and variable tariff corridors have led to rising ride numbers and higher revenues in Hamburg's taxi industry. This comes from a scientific evaluation of the Hamburg model trial. In particular, the possibility to offer taxi rides cheaper than the regular fixed price had a positive effect on demand. According to the Berlin Social Science Center for Social Research, a permanent introduction of flexible pricing corridors could increase the annual revenue of Hamburg's taxi companies by €46 million compared with the previous taximeter-based billing. The results are to inform the discussion on the reform of Hamburg's taxi regulations on February 1, 2027.

5.5 million ride data records analyzed

For the study, the Nord Statistics Office, the Berlin Social Science Center for Social Research, and the ride-hailing platforms Free Now by Lyft, Uber and Bolt analyzed a total of 5.5 million individual ride records. The City of Hamburg had collected the data since February 2024. Hamburg's Transport Senator Anjes Tjarks presented the results together with the Berlin Social Science Center for Social Research.

At the heart of the study was the question of how different pricing models affect demand for taxi rides and the revenues of the companies. The previous metered billing, binding fixed prices, and fixed prices with variable pricing corridors were compared.

In February 2025, Hamburg initially introduced a binding fixed price for taxi rides booked through ride-hailing platforms. The fixed-price billing was offered as an alternative to the previous calculation via the taximeter. In October 2025 the city expanded the model trial to include a variable pricing corridor. The participating ride-hailing platforms were initially allowed to levy surcharges of up to 20 percent on the fixed price for four months. From mid-March to mid-June 2026 the providers could additionally grant discounts of up to 20 percent.

Fixed prices increase ride numbers and revenues

Already the introduction of the binding fixed price led, according to the Berlin Social Science Center for Social Research, to higher demand. Compared with the previous taximeter billing, the number of rides rose by five percent. At the same time, taxi companies' revenues rose by nine percent.

With the subsequent introduction of the initially upward-opened pricing corridor, this development intensified. The number of rides in this phase was 14 percent above the comparison value of the taximeter billing. Revenues rose by 19 percent. However, according to Andreas Knie of the Berlin Social Science Center for Social Research, the platforms used the possibility to charge higher prices only comparatively rarely.

Discounts were used much more frequently after Hamburg had opened the tariff corridor downward as well. In 80 percent of cases, the option to offer cheaper rides was used. At the same time, the number of taxi rides brokered was 24 percent above the comparison value of the taximeter billing.

According to Alexander Mönch, President of Freenow by Lyft, passengers booking via the app benefited from prices that were on average around ten percent lower than the taximeter billing. In addition, the binding fare is already fixed before boarding.

The taxi companies also benefited in particular from the possibility of price discounts. “Pay less, drive more: precisely the model in which prices were allowed to fall has brought the taxi trade the most, namely about 14 percent more revenue per taxi per day compared with the current fixed price,” explains Mönch.

Annual revenue potential of up to 46 million euros

The scientific evaluation also quantifies the possible economic effects of a permanent introduction of flexible tariff corridors. According to the calculations, the annual turnover of Hamburg's taxi industry could rise by 32.5 million euros due to the price corridors compared with a tariff model with non-adjustable fixed prices. Compared with the previous taximeter billing, the study even yields a possible annual revenue increase of 46 million euros.

Freenow by Lyft, in the projection for the two-sided tariff corridor, arrives at an additional annual revenue potential of around 20 to just over 30 million euros for Hamburg's taxi industry. The different amounts relate to the respective comparison models and calculations.

The results, according to the Berlin Social Science Center for Social Research, suggest that flexible tariff design can offer economic advantages over the exclusive taximeter billing. Accordingly, neither waiting at taxi stands nor exclusive billing according to the taximeter, despite higher fares, leads to corresponding increases in revenue.

The background are the economic framework conditions of Hamburg's taxi industry. In recent years, taxi tariffs had been significantly raised due to rising costs and declining trip numbers.

More occupied kilometers and additional demand

In addition to the revenue increases, Freenow by Lyft points to an improved utilization of the vehicle fleet. According to Mönch, the additional trips had not led to a corresponding increase in the total kilometers traveled. Rather, the occupied kilometers had risen twice as much as the total kilometers driven.

"For drivers, every occupied trip counts. With the corridor, it brings more: more trips per hour, more revenue per hour, and fewer kilometers without a passenger. Less idle time, more revenue – that's how it should be," says Mönch.

The platform operator sees this as an indication of a more efficient use of the existing taxi fleet. The vehicles are more often on the move with passengers, while the share of unoccupied trips decreases. In addition, Mönch attributes a substantial part of the additional trip volume to newly created demand. "Two-thirds of the additional trips are real new demand. The taxi benefits from this, instead of merely redistributing. That makes us, as a quintessential Hamburg-based company, especially happy."

The figures cited by Freenow on additional demand and on the development of the occupied kilometers complement the results of the scientific evaluation. However, the original presentation of the study does not reveal by which methodology these indicators were determined.

Ride-hailing platforms support flexible pricing

The ride-hailing platforms Freenow by Lyft, Uber, and Bolt involved in the study evaluate the results positively. They advocate permanently enabling flexible taxi fares.

From Uber Germany's perspective, pre-announced fares and cheaper offers during periods of low demand can attract additional riders to the taxi.

Freenow by Lyft points in particular to the economic benefits for taxi operators. More occupied trips per hour could increase revenues per hour of operation and at the same time reduce the number of kilometers driven without passengers.

Bolt also sees opportunities in a more flexible pricing design to better exploit the economic potential of existing taxi operations.

A peculiarity of the Hamburg market is that the large platform providers there predominantly act as intermediaries of regular taxi rides. Unlike in several other German cities, they in Hamburg do not primarily mediate rides with rental cars and drivers.

A highly fragmented business structure makes the transition difficult

The introduction of flexible tariff models affects Hamburg, a predominantly small-scale organized industry. According to the transport authority, around 2,700 taxis are licensed in the Hanseatic City, distributed among about 1,700 companies. Of these, around 1,500 are one-vehicle companies. For smaller taxi companies, the required digitization and the implementation of flexible pricing pose particular challenges.