A Strange Combination Of France And Germany Will Easily Kill Them Off – Unless Uber Moves Really Fast.
A successful taxi app business needs 3 things.
2) Drivers and cars
3) An app
So, how will Uber die?
After all, it has all of these.
Well, let’s take a closer look.
And the numbers are growing – there is a definite demand for such services.
Drivers and cars – well, Uber has plenty of drivers, but no cars. And the drivers get very little money, especially after paying out all of the expenses to run a car large distances, every day.
Well, yes, but that’s easy to produce these days – you can even get Uber app clones, fully working, for around $200 online.
So, drivers and cars seem to be the biggest problem Uber has.
And a French company has looked at this in depth.
And are likely to kill Uber, initially in London, UK.
Here’s what they’ve done.
Firstly, their app gives the customers a fixed price for the ride.
You know exactly what you’re going to pay before you book. No increases for traffic delays.
And no “surge” pricing.
And their prices are about 1/3rd lower than Uber and about half that of a London “black cab”.
Oh, and to get market share (and let’s face it, free publicity in articles like this one …), currently everything is half price.
Oh, and I nearly forgot to mention.
They pay their drivers more than Uber does.
Yeah, I know.
There must be something else, surely.
Yup, there is.
Let’s take a step back for a moment.
I mentioned cars, almost in passing, a few sentences back.
Think about it.
If you were a car manufacturer, would you see Uber and its competitors as a problem for your company’s future?
After all, people like me never own a car anymore.
I take taxis.
They’re easy, cheap, efficient and I never have parking problems.
I can never see that I will ever own a car again.
But, I admit, some taxis are older, dirty and so on.
German companies BMW and Daimler had studied this heavily.
They’ve recognised the problem.
And so they’ve invested heavily in “Kapten”, a French company.
Currently, they’re investing in infrastructure.
And their entire marketing budget is focussed on subsidising rides.
Whilst paying the drivers well – about 150% of what the customer pays.
Next, we can safely foretell, their drivers will have access to cheap, leased, quality cars.
That will encourage more drivers to get on board.
And customers will definitely prefer a new Mercedes over some smokey old Ford.
Especially as it will be cheaper, too!
Taking this a stage further, London is one of Uber’s “top 5” markets. Those 5 cities make up 25% of their income.
London alone is believed to be responsible for 1.25 billion dollars of Uber’s income last year.
And Uber has 80% off all taxi ride business in the UK’s capital city.
Losing London, even by a few percentage points, would be a major blow.
Especially for a company which experienced what many of us see as a failed IPO a few weeks back.
Expansion for Kapten?
Add more cities to the app.
And more countries – they’re already in Portugal, Switzerland and France.
Get drivers – easy, when so many taxi drivers are looking for work, and when it’s a largely skill free job, at a time of increase in gig jobs.
Taxi drivers, after all, have ALWAYS been in the gig economy in London (since 1662!) and elsewhere …