Yakutia’s taxi service born out of injustice: inDrive founder Arsen Tomsky's mission to fight back against cartel pricing

Yakutia’s taxi service born out of injustice: inDrive founder Arsen Tomsky's mission to fight back against cartel pricing
It was a freezing cold New Year's eve in Yakutiya, the coldest city in the world, when all the local taxi companies tripled prices. The social network students set up to negotiate fees for rides led Arsen Tomsky to set up inDrive to fight injustice in the marketplace. / bne IntelliNews
By Ben Aris in Berlin March 14, 2023

Arsen Tomsky, CEO and founder of digital multi-services platform inDrive, is not your typical “tech bro.” First of all, he was born far from the sun-drenched shore of California in Yakutsk in Siberia’s Republic of Sakha deep inside Russia and the coldest city in the world. From there he set up a taxi hailing service with negotiable rates that that now been rolled out in 47 countries across Europe and Asia. But what makes the firm unique is it is founded on the principle of offering its users the fairest deal, not just making a buck.

“What sets us apart is that we are really driven by the idea of fighting injustice,’’ Tomsky said in an exclusive interview with bne IntelliNews, speaking by Zoom from Mountain View, California, one of inDrive’s corporate hubs around the world.

The original idea came to him on New Year’s eve in Yakutia. With the temperatures falling to below -40C, all the city's  taxi companies had tripled their fares on the same day. “It was a cartel,” says Tomsky, who suffers from a heavy stutter.

The students in the town fought back. They quickly used social media to organise a hub that shared rides and connected customers to drivers with negotiated fees, which quickly attracted 50,000 members.

Tomsky had already set up three tech ventures and loved the idea, quickly setting up inDrive, the taxi-sharing company. The company originated as a negotiate-your-price ride hailing company in Yakutsk.

inDrive made ridesharing even easier with an app where passengers and drivers could negotiate and agree on a price that seemed fair to both parties. This was back in 2013, and Tomsky explained that by providing a more equitable solution, he used tech to fight the injustice that he saw happening in transportation.

“We charge the lowest commissions among ride-hailing companies,’’ Tomsky told bne IntelliNews. “Unlike our peers, who charge 25-50%, we have always maintained our commission under 10%.’’

Fast forward to today and inDrive – operating across 700 towns and cities – is the world’s fastest growing app in its industry by number of downloads and the second most downloaded ride-hailing app, according to data.ai’s 2022 figures. Challenging injustice by creating fairer solutions to address the existing gaps in underserved markets has become a crucial part of inDrive’s global expansion strategy, one that the world’s top VC players seem to approve of.

Earlier this year, inDrive raised $150mn using an innovative hybrid instrument from Boston-based General Catalyst, which had previously participated in the company’s $150mn Series C investment round led by Insight Partners in 2021. The company said in a statement that the new funding will give inDrive additional financial flexibility and will support the company’s ongoing growth, as it continues to expand in emerging markets and beyond.

“This investment will enable us to maintain our high double-digit growth rates, improve the quality of our offering and develop new business verticals. inDrive is in a strong financial position and has a choice of financing instruments that best suit its requirements. I believe that this financing reflects General Catalyst’s conviction in our ability to continue successfully expanding into new communities and new business verticals in the coming years,” Tomsky said.

inDrive was last year’s most downloaded ride-hailing app in Morocco, Peru, Panama, Nicaragua, Ecuador, Colombia, Bolivia, Pakistan, Nepal, Namibia and Botswana, according to data.ai.

The company has recently expanded its offering from ride-hailing to more general services, where a fee or commission is paid. The service now covers cargo and freight delivery as well as task assistance to include job search and other services in some of its markets. The next sectors where Tomsky believes he can offer better and fairer solutions are social e-commerce, fintech and food delivery.

“Some people are completely cut off from the traditional banking system in their countries and forced into accepting loans that carry an interest rate of up to 500%. This is not right, and I believe that my team can offer the technology to challenge this injustice,’’ he said. “We also aim to disrupt the food delivery sector by making the fees delivery companies charge more acceptable for restaurants, as well as fairer for the couriers who make deliveries.

“The company recently rebranded from inDriver (Independent Drivers) to inDrive (Inner Drive) to better reflect its mission to challenge injustice, given that it is so central to its ethos and business strategy,” Tomsk said.

Despite the company’s success, 2022 was an emotionally difficult year for Tomsky and many of his colleagues. In February of last year Russia shocked the world by starting a war with Ukraine, a war that Tomsky has condemned as “tragic madness and evil.”

While he still has warm memories of his birthplace Yakutsk, the home of the ethnic ‘Sakha’ minority to which he belongs, Tomsky, who moved to California in 2018, has made the decision to divest inDrive’s business in Russia and ensure that those employees who wanted to continue working for the global unicorn had the means and ability to relocate abroad.

What keeps him going in tough times is the desire to create new opportunities and change people’s lives, Tomsky says. Together with his company, he continues investing in underserved communities through inDrive’s Vision Wing, whose mission is to provide targeted support by facilitating access to education, arts, sciences and sports, with the aim of improving the quality of life in underprivileged communities.

For instance, the BeginIT programme, which launched ten years ago, helps children in rural schools and orphanages learn the basics of software engineering, allowing them to take control of their future career paths. Today, the BeginIT program covers 127 rural schools and orphanages.

Another notable Vision Wing project is the Aurora Tech Award, an annual prize for women founders of technology startups that have a profound impact on global development. On March 8, International Women’s Day, inDrive announced this year’s winner – Elizabeth Mwangi, founder of Gwiji. This startup is connecting cleaners living in the slums of Nairobi, Kenya with local clients, and it has already economically empowered more than 150 women by connecting them to 500 clients since its launch in May 2022.

“I am still very, very driven by my desire to empower more people to improve their lives. Sometimes I probably focus on work too much, but I believe that my team and I will be in an even better position to challenge injustice and empower more communities, as inDrive continues to grow and expand,’’ Tomsky said. “We have big plans.’’