After its launch in London this week, Estonian on-demand ride-sharing service Taxify OU has had to suspend operations in response to an urgent investigation launched by the city's transport authority.
According to the Uber Technologies Inc rival, the suspension was temporary and it wanted ''to clarify its legal position'' with Transport for London, the local government body which is tasked with oversight of the city's subway, bus and taxi services. On Friday, the app informed London users of the non-availability of drivers.
''TfL has instructed Taxify to stop accepting bookings and it has done so,'' said a statement from the authority. ''The law requires private-hire bookings to be taken by licensed private-hire operators at a licensed premises, with appropriate record keeping. Taxify is not a licensed private hire operator and is not licensed to accept private-hire bookings in London.''
Taxify, which launched in London on Tuesday operates in 26 cities in Europe, the Middle East and South Africa. The service charges an average 15 per cent commission for drivers, according to its website. In a help note for drivers Taxify says: ''Our pricing system is the same as our competitors.''
China's Didi Chuxing is backing Taxify with financial investment and support on technology developments.
Instead of obtaining an operating licence from Transport for London, Taxify acquired an existing company that has a licence until 2019. The move ran into criticism from union representatives, MPs, and the Licensed Taxi Drivers' Association. Taking note of the situation TfL launched an "urgent investigation" into the company and said it would look at whether the service was operating legally.
''Taxify's sole objective is to make London's ride-hailing market fairer so that better value is delivered for customers and drivers alike," the company said in a statement. The company spokesperson said Taxify would work with TfL and on resolution of the issue within the "coming days".