The London black cab is as much a part of the experience of visiting London as red buses and Big Ben. It is a symbol of the city, one that is not shared by any other city in the world, and yet these traditional systems are under threat from a mobile app from America.
Uber has been finding hire cars for customers since 2008, and it has grown enormously since then, in part due to its low-cost service, and in part due to its convenience. Many visitors to London are choosing to use this app rather than take a traditional, licensed cab.
What Uber is worth now?
Uber was valued at $40 billion only a few short months ago, and has already increased its takings with an additional $10 billion on the valuation, so that the app currently stands at around $50 billion.
This is a high cost for an app which has only been around for 7 years, and the company seem determined to make use of the app by financing partnerships and helping it to overcome current regulatory problems in the form of Chinese regulations in licensing, and well as problems in France over similar issues. These may impact the future of Uber, even while it is growing.
How does Uber Work?
Uber works in the same way as other, on-demand services that are designed to respond to a request from the user. What this means is that customers of Uber are able to find cars within their local area quickly, and without having to wait.
All that the customer has to do is to select their location on the app screen, and then wait for the car of their choice to arrive. The app will also calculate the cost of getting to your chosen destination, and some cabbies have compared this to the traditional taxi meter, which only licensed cabs may use.
Will Uber overtake the black cab?
Although some drivers are worried that the use of Uber could overtake them in the future, rendering the Black Cab a thing of the past, there are certain reasons why this may not be the case. The first reason is that there have already been protests from black cab drivers, comparing the similarities between Uber’s journey costing and the traditional taxi meter. This could land Uber in hot water if it ever came to a court decision on the issue.
In addition, there are also concerns about Uber’s hire car system, particularly its lack of regulation or vetting. Some drivers don’t know where they are going, and have to use a SatNav in order to find a location. This contrasts negatively with the traditional black-cab driver. In addition, there is also the risk in using an unlicensed cab.
These will usually not have the right insurance to operate as a business, meaning that they are essentially driving without insurance. If you need to make a claim for injury against the driver, you are unlikely to have any compensation, whereas using a licensed cab means that you can be confident that they do have the right insurance.
Gemma Sheldrick is Head of Strategy at DNA Insurance, who provide insurance advice and cover for businesses across the UK.