Known in France for its VTC services, FREENOW is now launching a taxi service in Paris. What are the reasons for this development?
Dimitri Tsygalnitzky - For FREENOW, France was the only market where only the VTC offer was available. Conversely, in all the other European countries where we are present (editor's note: 10 in total, including France), our core business is taxisin particular with the mytaxi brand. In some countries, such as Germany, the UK and Portugal, we offer both taxis and VTCs. So it seemed to us that to roll out this offer in France and in Paris in particular, one of our group's key cities. Especially as we have not only the expertise, but also the conviction that by providing this taxi service, we will be strengthening our position in the B2B segment, which is one of our pillars of development. While Uber and Bolt are our main competitors for personal use, Uber and G7 are our main competitors for business travel.
How are professional uses shared between taxis and VTCs?
D. T. - This needs to be validated in the light of the specific nature of the Paris market, but we can observe in other countries that VTCs are preferred for long-distance and suburban journeysThe rates are often more attractive. The other way round, from or to stations and airports, taxis are more attractive thanks to the possibility of access as close as possible to the terminals. Another argument in favour of taxis is that they run at peak times, when they can use the bus lanes. Last but not least, waiting time is also an important factor for business travellers whose meetings may be extended. While VTCs have a 10-minute waiting time, taxi drivers don't hesitate to stay as long as their taximeter is running.
To and from stations and airports, taxis are more attractive than VTCs because you can get as close to the terminals as possible.
What have been the stages leading up to the actual launch of your offering today?
D. T. - When we defined our strategic plan at the end of last year, we decided to launch it on 1 June. Almost two months ago, we started hiring drivers, with a team going out into the streets of Paris to recruit at taxi ranks. While there may be a certain amount of mistrust, with drivers seeing us as a VTC platform, we have spoken to almost 1,500 of them and more than half have shown themselves to be extremely interested in our flexible business model based on a 15% commission per journey. 200 drivers took part in the pre-launch of the service a fortnight ago, and our ambition is to have almost 600 today, when it is actually launched. By the end of the year, the number will have risen to several thousand.
To achieve this figure, do you intend to poach drivers from the competition?
D. T. - Today, there are around 20,000 taxi drivers in the Paris region, half of whom work with G7 and Alpha Taxis and the other half are self-employed. We prefer the latter, firstly because they don't have to pay monthly instalments of around 400 euros to G7 and Alpha, and secondly because these companies don't put pressure on them to impose exclusivity. There are enough to do with all self-employed drivers and if we could have 9,000 drivers, that would be fantastic.
So 9,000 drivers is your target?
D. T. - We already estimate that by reaching 5,000 taxi drivers within a yearAt the same time, as we continue to develop our user base, we will eventually need a sufficient number of drivers to ensure that waiting times are attractive. At the same time, as we continue to develop our user base, we will eventually need a sufficient number of drivers to ensure that waiting times are attractive. But we will seek to have the right balance to avoid diluting our offering and be able to generate enough income to keep drivers working for us.
Parisians and business travellers, for example, are used to G7, so how are you going to promote your taxi service?
D. T. - There are currently around one hundred FREENOW-flagged drivers in Paris and we hope to have 300 by the summer. to mark the occasion. In addition to this flocking, the rule is that if a taxi works with a platform, it must indicate this by its logo. So all drivers will have a small Freenow sticker on the windows of their car.
We already estimate that by reaching 5,000 taxi drivers within a year, we will be able to offer high levels of service to business customers.
What practical benefits do you offer companies and their employees?
D. T. - Business travellers have at their disposal all means of payment to pay for journeys, whether by cash, credit card or, if there is a line of credit negotiated with the company, the passenger will not have to pay anything to the driver. If they have to make an advance payment, FREENOW is synchronised with Concur and Cytric, so the expense is automatically tracked if the company works with these solutions. For the employer, this means complete visibility of expenses and no more expense claims floating around. But the other advantage is that you can introduce travel policies that also apply to taxis. For example, a company could authorise its employees to take a taxi to the airport or at peak times, and authorise VTCs at other times. Another possibility is to say that for journeys made early in the morning or late at night, they will be paid by the company and by the employee the rest of the time.
Read also: ALD Move wants to manage travel expenses
However, FREENOW's offer does not stop at taxis and VTCs, but extends to all forms of mobility. With the same advantages?
D. T. - These benefits for users and businesses apply to not only to taxis and VTCs, but to all other forms of mobility. From the scooters and bikes that FREENOW offers in France in partnership with Tier, electric scooters with Cooltra, car-sharing with Share Now and electric scooters and bicycles with Dott, with other partnerships under discussion. All these forms of mobility, depending on the presence of the operators in the various cities, can be reserved end-to-end via the application. Although travel buyers are still wary of these solutions, we know that a number of employees use them in city centres. And they use different applications and different forms of payment. There's a lack of visibility, even though our promise is to bring everything together in a single application, without taking up too much space on the phone.
However, unlike some of your competitors, your vision of the super app seems to be limited to urban mobility. Why is that?
D. T. - Time will tell, but I'm not convinced of the synergies and mix between short- and long-distance services that the SNCF Connect or as Uber in the UK. We are in the business of everyday mobility, and the process of ordering a VTC in a few minutes is not the same as buying a train or plane ticket or booking a hotel room. By opening up the app too much, you run the risk of satisfying no one. For users, particularly corporate travellers, we want to be the ideal travel companion for getting from the airport to the hotel, from the hotel to the office, from the office to the restaurant. We want to master this notion of a super app, but only applied to urban mobility, without spreading ourselves too thin.
Urban mobility can also be seen through the prism of CSR. What are FREENOW's objectives in terms of sustainable development?
D. T. - FREENOW has set itself the target of zero net emissions by 2030, with a reducing our emissions by 50% by 2025. We have three main levers to achieve this, in particular supporting our 25,000 VTC drivers in France to the purchase of green vehicles through subsidiesWe can do this by promoting the use of electric cars, by reaching agreements with manufacturers and suppliers of electric charging points on preferential tariffs, or by offering a price differential between electric cars and other ranges to stimulate demand. This is the first pillar, the one where we have the most work to do, but also collectively with other platformsthe drivers' unions.
As for the other two pillars, what are they?
D. T. - The second is to replace short VTC journeys with multimodal alternatives, particularly journeys of less than four kilometres, which are not the most attractive for drivers, but which account for a large proportion of bookings. A two-kilometre journey can easily be made by bike or scooter. and those that take a little longer by scooter or electric bike. Finally, the last pillar is to work on our dispatch algorithms to optimise driver approach times as much as possible, which can have an impact on carbon emissions.
Does your new taxi offer meet these objectives?
D. T. - This is not the priority today. It would make no sense to start greening a fleet before it even exists. Especially as we are expecting a fairly complex battle with G7, Uber and the VTC and taxi drivers themselves. We're in the process of bringing about a minor revolution. However, it's not over yet, what is not currently a priority will become one from the end of the year onwards or early 2023, when we commit to greening the taxi fleet in the same way as we have done for VTCs, where we now have the largest electric fleet in Ile-de-France.
One question remains: is Freenow planning to roll out its taxi service outside Paris?
D. T. - For the moment, we don't have any such plans. However, depending on the success we achieve over the next three to six months, we could very well consider extending this service to other cities. Today, we operate VTCs in seven French cities: Paris, Lyon, Nice and, since last year, Marseille, Toulouse, Bordeaux and Lille. There are plenty of other secondary and tertiary cities where taxis could be a way of expanding rapidly, without necessarily deploying a VTC service. We're not stopping at anything.
