OPERATORS NEED TO JUDGE ‘UBER
In recent times at the start of each year, I offer my predictions for the year ahead in this very publication. It would have been unthinkable, perhaps even unprintable, had I suggested Autocab, an often self- declared armour for private hire operators to compete against the likes of Uber, would sell
itself...to Uber! This has understandably triggered a wide spectrum of views and emotions within the private hire industry.
As the boss of minicabit, Britain’s largest cab comparison site that includes several hundred operators on its platform covering trips in over 550 UK towns and cities UK-wide, I thought I’d pre- sent some of the key practical concerns that have been raised. On top of that, besides my time long ago as a minicab driver, my later career at Vodafone involved regularly dealing with Silicon Valley companies such as Facebook, MySpace (remember them?), Google and Amazon, so I’ve seen how big tech compa- nies tick.
However, I should highlight a few things upfront. Firstly, no one can doubt the significant contribution Autocab’s software – and team - have made to the private hire industry and its operators over three decades, a track record to be proud of. Also, whilst an operator with or without any dispatch system can source bookings via minicabit, we integrated with Autocab (though not with its iGo system) following requests from our operator part- ners for a deeper collaboration, as we had done previously with iCabbi. And whilst I find many of Uber’s practices questionable, it’s fair to say they have galvanised the incumbent private hire industry to raise its game in terms of, for instance, embracing digitalisation and enhancing its customer experience. Indeed, minicabit has long been successfully spotlighting to customers that a cab ordered from a local operator can match/exceed a ride hailing app’s offering in terms of service, quality and even price competitiveness.
As fellow sponsors of PHTM’s Expo over the last few years, we have both presented ourselves as solutions to empower private hire operators to better compete against ride hailing apps - minicabit as an additional source of customers (as, for instance,
booking.com is for hotels), Autocab offering tech tools to help existing fleets retain their customers from switching to the likes of Uber.
So Uber’s announcement to acquire Autocab is all the more jar- ring, with operators now needing to scrutinise how this could help their business or not. Only Autocab and Uber can make their case but it’s vital that operators make their judgements either way with their eyes wide open, as the impact could be irreversible. Here are just some of the key questions being raised:
WHY CAN’T UBER PARTNER WITH iGO INSTEAD OF BUYING AUTOCAB?
Airlines commonly ‘code share’ routes they can’t easily fulfil themselves, with a Virgin Atlantic ticket sometimes delegating to a Delta flight on some routes. But imagine if, say, Ryanair that had aggressively competed with local airlines for so long then bought the software company that powered those airlines’ own bookings?
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Uber could be just another partner of iGo without owning the tech plumbing that powers bookings of other fleets, many in cities that are competing daily against Uber. Importantly, as a partner, it would have no access to Autocab’s source code or aggregated data, a key concern (see below). Autocab has said that a partnership with Uber could unravel if Autocab was acquired by another player. But if another acquirer saw no con- flict with Autocab’s partnership with Uber, a condition of the purchase could be to maintain it. Alternatively, the partnership could be unravelled in an orderly fashion to allow all parties time to seek alternatives to continue serving their customers.
Ultimately, it’s not a conflicting acquirer that could unravel a partnership between Uber and Autocab – it’s the participation of Autocab’s operators in its iGo network. Without them, there is no iGo and no network for Uber to partner with.
COULD UBER GO AFTER AN OPERATORS’ OWN DATA?
Autocab has rightly highlighted that GDPR data protection rules prohibit any entity, even its owner, accessing a cab opera- tor’s customer base as my understanding is that GDPR protects data on people, not businesses. But could Uber still see anonymised data about an operator’s own bookings e.g. which corporate contracts an operator has, what percentage of book- ings does an operator take by phone versus web versus app; what are the popular locations and times of day/week/year of demand it services; what price points work best; how many drivers the operator has on its system versus how many are active each day according to its operator licence; which of its car sizes get the most bookings etc etc? As Autocab software also powers analytics for operators, could Uber tech support some day be involved in also maintaining this analytics soft- ware, thereby needing access to it for each fleet?
Also, as Uber would outright own Autocab, I expect this would also include ownership of the source code for Autocab’s dis- patch software and passenger app – again, if ever Uber engineers one day have to support this software, will Uber declare never to install any maintenance software that could inadvertently be used to collect any aggregated data trends about an operator (even if anonymised)?
It could help if clarity and ideally undertakings are given as to how an operator’s own data will be technically locked under Uber’s new ownership, the methods for this independently audited, and the penalties for any breaches set at a level that is a tangible deterrent.
HOW CAN UBER COMPETE AGAINST AUTOCAB’S OPERATORS IN SOME CITIES BUT PARTNER WITH THEM IN OTHERS?
Apparently, Uber will not use Autocab’s network where Uber is already operating; for instance, in London or Manchester. Oxford has been cited as an example of how Uber, which doesn’t currently have a licence to operate there, could instead enable its app users to book with a local Autocab operator there instead. So if, for instance, Uber’s own driver in London drops off a customer in Oxford, what happens if there’s a job going from Oxford to London whilst he’s there? Does Autocab’s Oxford fleet get it, thinking they were safely not competing with Uber or does Uber’s own driver get the job? This may seem like a fringe case but it leads to the next, perhaps most anxiously raised, question...
SEPTEMBER 2020
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