GetTaxi Inc., an Israeli ride-hailing service that raised $150 million this year, is cutting its Russian prices starting today to compete with unlicensed drivers and Uber Technologies Inc.
GetTaxi will charge passengers in Moscow and St. Petersburg a 50-ruble ($1) starting fee and 18 rubles a minute afterward, Chief Executive Officer Shahar Waiser said in an interview. That means a five-minute ride will cost 140 rubles, or less than half of the earlier price, encouraging people to use GetTaxi instead of unlicensed drivers or public buses, Waiser said.
The Tel Aviv-based company was among the first ride-hailing services in Russia, together with Yandex.Taxi, a unit of Web- search provider Yandex NV, each now operating more than 10,000 cars. They are facing intensifying competition from Uber, which started in Russia this year and introduced the budget service Uber X in September, with prices starting at 99 rubles. Uber is close to raising funds at a valuation of at least $35 billion, people familiar with the matter said last month.
GetTaxi is profitable in Russia, Waiser said. The company will subsidize drivers on short rides, paying them more than it receives from customers, he said. The company is betting that the practice will help it attract new users. GetTaxi will make a profit on longer routes, Waiser said.
GetTaxi had similar initiatives in London, where it offered black-cab rides for 5 pounds ($8), and New York, with a flat $10 fare offer in Manhattan.
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