The news that Autocab has sold to Uber sent the industry reeling last week. I would like to take this opportunity to give my thoughts on the situation. For me, it is critical to understand the motivations of any new entrants into the taxi industry, and the parties enabling them to do so.
On the 19th June 2018, iCabbi made a major announcement to the taxi industry that we had entered a strategic partnership with Groupe Renault. My team and I remain very proud of this milestone. Whereas our deal with Renault was done in the spirit of bringing stability and new opportunities to the taxi industry, Autocab’s deal is nothing short of a Trojan Horse. Autocab customers are being baited with the short-term promise of additional bookings, but taking this bait ultimately hands power over to Uber and strengthens their hand as they continue in their efforts to bring about the demise of the independent taxi industry.
Autocab’s Approach & Motivation
Why has Autocab done a deal with Uber? Autocab has long positioned itself as a solution on the side of the independent taxi industry versus Uber, actively encouraging its customers to fight back against Uber’s ceaseless attempts at corporate domination through a combination of underhand tactics. Just now, as a number of significant court cases that could signal Uber’s withdrawal from the UK are about to conclude, Autocab throws them a life-line. When we entered the market in 2013, Autocab’s turnover was c. £16m. In 2019, alongside millions in losses in previous years, their turnover was £8.4m. Having taken hundreds of customers off them since entering the market, iCabbi’s growth has been to the direct detriment of Autocab. They’ve been trying to sell the business for years. Their sale to Uber is an act of desperation and clearly motivated by the company owners and executive team’s personal gain and not, however much they try to spin it, a strategic move for their customers. They’ve taken the life raft and left Uber to sink the ship.
What can be said about Uber’s motivations? Right now, they care about three things: data, demand, and drivers. Unfortunately, taxi operators are surplus to requirements in Uber’s equation. The Autocab acquisition allows Uber to penetrate regions that have thus far rejected them due to well founded concerns over the companies operating practices. But what will happen in the near-term once fleets partner with Uber by way of the ‘Autocab opportunity’? Uber will not actually create any new passenger demand, however the ability to now fulfill bookings in new areas on their app means they can crank up their marketing machine in new territories and soak up demand. Uber can now sell these bookings back to the same taxi operators they’ve won them from. And as existing passenger bases start to realise that making their booking on the Uber app gives them a far greater pool of cars to service them (meaning a faster ETA), while still getting the same standard from their local taxi firms, they too will migrate to the Uber app as their first port of call.
Asking taxi operators to accept bookings from their dispatch provider (Uber) is therefore nothing short of asking them to hammer the nail in their own coffin. Rather than being their partner, the tech provider in this scenario becomes their competitor.
And speeding up the whole process is the access Uber will now have to the taxi companies’ data – the holy grail. Uber UK (formerly Autocab) will wield GDPR as a defense mechanism – your customer data is owned by you. It is safe because it is protected by GDPR. GDPR, however, is all about protecting personal data – names, phone numbers, addresses and so on. Uber is a data company, interested in the bigger picture. It wants Big Data, that is the mass aggregation of booking trends that will inform its market targeting, price positioning, new product strategies and so on. As the owners of Autocab, Uber has the right to access these insights. They may not be able to see specifics, but they can understand local trends, demand patterns etc associated with Autocab client companies. Data is knowledge, knowledge is power, and acquiring Autocab who processes huge amounts of this data would give Uber’s vast data team enormous competitive advantage. In time, Uber will use this to muscle out the spare wheel in their equation for success – the very taxi operators who have handed it to them on a plate.
Renault is investing heavily in Electric Vehicles (EVs) and saw an opportunity in the taxi industry (which had been ignored by all other global players) to build a strategic partnership with iCabbi that could help them sell these new cars into a previously untapped market. The plan was initiated last year in the form of a trial with City Taxis, Sheffield. The pilot has helped us to understand and develop our EV offering. While we intended to roll this out in 2020, it has unfortunately been delayed by the pandemic. Pushing this launch into 2021 brings a massive positive, with new models being explored. An EV consultation process for this has already been launched with a small sample group of customers in the UK and we’re excited to be working closely with Renault on this. This strategy will deliver iCabbi customers on the Taxi 360 Platform a USP against Uber & co. in the local community whilst opening up a new market to Renault (they have had effectively limited penetration of the taxi market to date).
So, a car company that wants to sell cars! Renault has a very clear objective, with no aspirations of competing in this industry.
iCabbi’s Approach & Motivation
I’m very proud of the successful company we have built, which above all else is rooted in strong customer relationships with fleets around the world. I strongly believe that we’ve shown integrity, honesty and an unwavering commitment to true partnership over the past ten years. The fact that our retention rate, despite some shortcomings any company with our growth experiences, has remained at c. 99% is testament to this – it’s something we work very hard to maintain. As a customer of iCabbi, I hope you have experienced these values first hand and trust that we always plan for the future with your best interests, and those of the wider taxi industry, in mind. Our mission has always been to support our customers to not only survive but thrive. We believe taxi companies can play a key part in the future of Mobility.
Amidst the outrage that has enveloped the industry since last week’s announcements are fears that other technology providers may follow in the footsteps of Autocab’s betrayal by themselves selling to other rideshare companies. Let me take this opportunity to assure you that iCabbi’s strategy, which is now in early-stage execution, is very much in line with the original motivations of Renault. Spearheading the electrification of taxi fleets with the right EV commercial model will be a very successful strategic partnership for taxi companies, iCabbi and Renault. There is no motivation for a company like Renault to abandon this plan at this stage for short term gain, particularly as iCabbi is now self-sufficient from an investment point of view which was a key objective this year following heavy investment by Renault. As CEO of iCabbi and a firm believer in the future of the taxi industry, I’m confident we’ve chosen the right partner for us, for you and for the taxi industry.
While the enormous volume of enquiries we have had over the past few days from Autocab customers wishing to join iCabbi means that we are likely to see some short-term gains from last week’s announcement, I cannot revel in these. Ultimately, I’m disappointed to see this development as I believe it is a hugely negative direction for the industry we care deeply about.
This is the challenge we must now face, and face it we will! iCabbi is here to help Taxi succeed and we have the vision, the resources, the team and the full support of Renault to do it. As an industry, we are stronger together, so let’s continue to be true partners and work together towards putting Taxi at the centre of mobility.
CEO & Founder iCabbi