You need to tell Retrofit that you want to use RxJava 2, using:
addCallAdapterFactory(RxJava2CallAdapterFactory.create())
So, for creating your Retrofit object, you will have something like:
Retrofit retrofit = new Retrofit.Builder()
.baseUrl(SERVICE_ENDPOINT)
.addCallAdapterFactory(RxJava2CallAdapterFactory.create())
.build();