UBER and the Private Hire Industry.
A new app based minicab company arrived in the summer of 2012 in London. Before UBER arrived there were a handful of minicab companies small and large in London.
This relative new app based company with billion dollar war chest had a plan to succeed whatever the cost.
In the beginning this relative new company had no experience of running or understanding how the minicab industry worked in London.
They made lot of mistakes, long queues at their headquarters for people trying to fill in the details.
Website not working properly, frustrated drivers unable to load documents, restrictive working hours of its employees were some of the problems they encountered.
UBER realised they had a problem and cleverly offered private hire drivers free iPhones and data to entice them with joining them,
you could even get a free Iphone.
There aim to achieve total success came when Taxi drivers went on strike, which was also the Achilles heel for the Taxi industry and total domination of the minicab industry.
As download of their app increased in millions the market share increased three fold and there was no going back for them.
Drivers increasing used UBER £500 personal recommendation fee to get other private hire drivers for them which worked in UBER’s favour and stupidly drivers were digging their own grave by inviting their own competition into the Matrix where there was only one company winning.
Taking full advantage of the dis organised sector of the minicab industry and drivers been treated appallingly by exiting private hire companies. Weekly rents of £150 a week and commission on airport runs and making them work 12 hour shifts were some of the issues with existing Minicab companies
With UBER charges and convenience of making bookings they had total domination of London private hire industry and the market itself. Once UBER had majority of the drivers minicab companies started to struggle and started losing drivers.
After taking control of the large portion of drivers in London UBER started to get rid of the free iPhones and started asking drivers to get their own phones and data used in smartphones.
UBER used the policy of charging all the drivers with 25% commission as a standard practice saying that drivers all over the world were charged the same commission yet not mentioning that the drivers in different countries get different incentives. With increasing share of drivers on their UBER Matrix drivers started to lose earnings.
Cheap prices, price of fuel, expensive insurance and price of private hire rental cars drivers realise that they were losing out. The only one who was winning was UBER and there was nothing they could do.
In my next Blog you will read how the minicab industry is fighting back and eventually UBER will lose its market share and possibly not exist in our beautiful city of London.