Plan Insurance Blog

Why Uber’s Acquisition of AutoCab Won’t Lead to Domination

During a tumultuous 2020, Uber announced that it had acquired the cab industry’s biggest dispatch software – AutoCab. With the private-hire industry in an ongoing feud with rideshare apps, this acquisition didn’t go down well.

Professional Driver Magazine reported that Alan Thomas, managing director of Radio Cars of Liverpool, said the move was a ‘betrayal…a total sell-out of the trade by the very people we trusted to combat Uber.”

At the time, many were unsure how Autocab and Uber would work together. Was Autocab going to swallow up its biggest competitor, or would Uber utilise the Autocab platform somehow? The private-hire industry waited with baited breath.

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Enter ‘Local Cab’

Local Cab is the child of Uber and AutoCab and supposedly offers the best of both its parents.

It gives local operators the opportunity to take Uber jobs through Autocab’s ‘iGo’ platform. It gives customers the ease of booking through their (likely already downloaded) Uber app.

Earlier in 2021, ‘Local Cab’ piloted in Plymouth, Bedford, Gloucester, Cheltenham and Oxford. Uber has now announced that it is launching Local Cab into four more UK towns. The platform is now live in Northampton and Aylesbury, as well as Stranraer and Dumfries in Scotland.

Mercifully, Uber Hasn’t Swallowed Up AutoCab

Before readers start to pull their hair out, understand that Local Cab simply lets passengers book a trip with a local operator using the Uber app. It isn’t turning local drivers into Uber drivers, which is what keeps private-hire drivers and operators awake at night.

Uber’s app integrates with Autocab’s iGo network, which has the potential to connect passengers with 80,000 private hire and taxi drivers in the UK. The Local Cab system has been in development since Uber acquired Autocab in August 2020

For example, Passengers in Aylesbury can now book a trip with a local operator via the Uber app, which connects them with local taxi firm Jet Taxis. In Northampton, the Local Cab partner is with local taxi firm Amber Cars. In the two Scottish locations, McLeans Taxis has been named as the Uber partner.

Company boss William McLean said the Uber app had been opened on average 3,000 times a month in Dumfries and Stranraer.

“This provides another way for customers to book with us. For anyone visiting Stranraer that already uses the Uber app, Local Cab will make it easy for them to book a ride with a local operator.”

William McClean

This does sound good for everyone. Those travelling through Local Cab areas can use their Uber app to take a ride while supporting a local cab company.

This represents a partnership between Uber and the private-hire industry the likes of which has never been seen before. Its an unusual experience for this long in the tooth taxi and private hire insurance provider to read reports of other firms getting on nicely with the American giant,

“The Local Cab pilot has proved to be a success for local operators, riders and local economies. Local operators have seen increased demand for trips and are now actively recruiting new drivers, which is having a positive impact on the local economy. We are now excited to roll the product out to more towns and cities across the UK.”

Ash Kebriti (Uber UK General Manager) via Professional Driver Magazine

Is Uber’s Grand Plan a Trojan Horse?

Can operators throughout the UK breath a sigh of relief then?

Uber has declared that it won’t open any more direct operations in the UK. The constant battles with local authorities and regional competitors appear to have ground down Uber’s will to fight. They will instead remain in their current 40 locations and all future growth will be through the Local Cab Service. Outside of the main cities, private-hire companies on the Autocab platform can use Uber’s technological ubiquity to their advantage. They won’t be in competition with the tech behemoth.

Uber’s current private-hire partners seem happy, if other local taxi firms follow suit then this is really a home run. According to AutoCab’s website, 30 leading UK firms have already signed Memoranda of Understandings with Uber.

Not without some concerns

If Uber makes a move to take-over further down the line, many in the industry will curse the early adopters for inviting in the wolves.

Though TechCrunch has reported that the acquisition is coming into the radar of UK’s competition watchdogs. They reported that issues could arise if Uber were to ‘shutter Autocab’s alternative trip-booking marketplace or close it in selective markets where its own ride-hailing service operates’.

There is also the possibility that if firms become dependent on Uber for a significant proportion of their work, overtime they may find fees creeping up and margins becoming squeezed?

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