Transport for London (TfL) – the authority responsible for transport regulations in London – refused to renew license of Uber this past Monday. Consequently, a massive ride-hailing market in the metropolitan, currently dominated by Uber, is set to become an open field for new operators to jump in.
London makes up the biggest market for Uber on the east of Atlantic and fifth biggest in the world with its 3.5 million users. One of the company’s executives in August 2018 stated the number of registered Uber drivers at 45,000 in London.
Uber applied for five-year long license in 2017 to operate in the city but the application was turned down stating lack of fitness of software and vehicles. Instead, the company was able to get an 18-month long license. This renewed license was scheduled to expire in past September but the TfL extended it for another two months.
Get ahead of your potential competitors and grab the opportunity created by Uber’s imminent exit from London. Here is a guide to starting an on-demand taxi business.
Causes of ban as stated by the TfL
Row between TfL and Uber began in 2017 when regulator highlighted loopholes in safety measures. The TfL refused to renew license but London Magistrate decided partially in favor of Uber in 2018 allowing ridesharing prodigy to continue operation. A two-month long grace period ended past Monday after the 18-month long license expired in September this year.
Following are the reasons that, according to the TfL, are primary causes of banning Uber:
- Unauthorized drivers using accounts of registered drivers. Transport for London claims unauthorized drivers completed 14,000 trips.
- Many of the suspended drivers are still operating with new accounts. Uber, though guaranteed earlier, did not work on developing the mechanism that would have identified unverified users.
- Some drivers did not have right insurance. An appropriate insurance plan is mandatory for every private hire and rideshare driver in London.
The untold causes and impact on ride-hailing
The TfL is reiterating on these causes for over two years. However, there are some unstated reasons as well that might have impacted the decision. Following are the most likely causes other than the ones stated above.
- London Mayor hinted at making ride-hailing reforms last year in the wake of court’s decision to grant 18-month license. The current mayor is critical of Uber even before he took the charge and believes that the absence of limitation on the number of drivers is causing traffic congestion in the city.
- Environmental bodies are calling on Uber to reconsider its vehicle eligibility by making electric cars and HEVs essential. Statistics indicate that air pollution increased by manifolds since Uber arrived in the city in 2012.
- Local taxi association in London repeatedly called for a ban on Uber since they believed that the playing field was not level. The mayor explicitly stated his plan of providing level ground for both established business owners and new entrants.
Although Uber was banned two years back for more or less the same reasons as stated on Monday by TfL, yet they are less likely to get another acquittal. The company managed to satisfy the court last time by reshuffling the top executives. The extension was renewed again two months back on conditions that the ridesharing company would demonstrate strict measures against drivers’ violation.
Also read: Guide to acquiring taxi management software
However, they are not expected to be able to pacify judges this time around because they city has now other ridesharing options as well. Uber also revealed a plan of making London operations entirely based on electric vehicles. The company is yet to demonstrate its progress in this regard.
Opportunities for entrepreneurs and taxi companies
London Free Press in 2018 reported Uber taking half of the total trips conducted by all private ride-hailing operators. This implies an enormous market share is up for grab as Uber is forced to halt operations after three weeks of license expiry date.
New players are already flexing their muscles to fill the major part in the impending void. Indian ride-hailing provider Ola announced to launch service in the next few weeks while Bolt from Estonia is aiming to expand operations.
However, the market share of Uber is so big in the UK capital that multiple small and large operators can jump in to replace the San Francisco based ride-hailing giant.
Take a look at our success stories from ride-hailing market.
Although it is still debatable whether Uber is able to make its way back in London any time soon, yet we believe that the company’s business would not be the same even if it manages to return. The regulators have all eyes on this ride-hailing company that has so far failed to implement a fair deal of surveillance system.
Today, a number of new and established operators are aiming to fill in the void. The city administration is all set to provide opportunities to new entrepreneurs and existing taxi business owners. Thus, the Magistrate is less likely to show flexibility this time around.
If you are aiming to launch a ride-hailing service that would partially or entirely replace Uber, it is recommended that you start the pre-launch ride-hailing marketing as soon as possible. Create the hype and spread the proposed name of your startup.
Meanwhile, you can work on developing the requisite infrastructure including mobile apps and admin panels. Using this approach, you would be able to launch your ride-hailing startup in less than month.
Place the hook right now to catch ride-hailing fish
Uber ban is unfortunate for the company and its loyal users. However, the ban is a blessing for entrepreneurs and taxi company owners as they would be able to establish and consolidate their businesses in the absence of their top competitor.
CabStartup enables ride-hailing startups to establish, expand and sustain businesses around the world. You can rebrand our ride-hailing platform with the design of your choice and customize it with additional features. The platform includes native mobile apps for customers as well as drivers. Besides, it also includes an admin panel for administrative tasks.
Our cloud based on-demand ride-hailing software solution is enriched with insightful dashboards and a range of features that assist your drivers and passengers. The dashboards share valuable business reports that enable you to identify areas of improvement.
We would help you prevent the problems that outlawed Uber. CabStartup can integrate the feature upon request that triggers facial or fingerprint recognition of driver before starting a ride. This feature would turn down any unverified driver from conducting a trip.
Another suggestion is to register hybrid and electric vehicles only to promote electric car taxi. Since you will be accessing third-party vehicles, the cost of operation would be the same as that with combustion engine vehicles.
Test CabStartup free of charges for two weeks trial period. Contact us once you are satisfied with the platform to share your ride-hailing business plan and our experts would take you from there.