Goldline Executive Travel was founded in the late 1960s, and slowly grew into east London’s biggest private hire firm, with coaches, minibuses and a fleet of luxury Mercedes cars. In the suburban areas where London blurs into Kent and Essex, it was an obvious choice for passengers looking for a ride to the airport, or a late night journey home.
But the arrival of ride-hailing services such as Uber changed the game for local taxi companies like Goldline. Being able to book a journey with a few taps on a smartphone has changed the way customers behave, and completely overhauled their expectations. “Customers now want the ability to book a taxi in an instant and to do so in the most convenient way possible,” says Goldline’s Adil Saleem.
Local companies are being squeezed by ride-hailing apps in three areas. They’re struggling to compete for passengers, for drivers, and they’re losing out on important corporate accounts. So now, they’re teaming up. Thirteen local firms in London are using new technology that allows them to easily share work between them.
The software, called iGo, has been developed by Autocab – which has been providing digital support for taxi firms since the 1990s, helping them manage bookings, allocate work and pay drivers. It has a massive 50 per cent market share in the UK, but until now has simply sold its product to individual companies. Now, in the face of rising pressure from ride-hailing apps, that approach is changing.
Before Uber, the taxi industry was rigid and inflexible – the number of black cabs in London, for example, grew from just 19,000 to 22,500 between 1986 and 2015 despite the city’s population increasing by almost two million. But Travis Kalanick’s willingness to bend the rules suddenly brought liquidity to the market.
Many companies have tried to replicate the ease of booking an Uber with their own ride-hailing apps, but this has led to a fragmented experience, and a proliferation of different apps for various companies and regions – Autocab actually makes a number of these apps for their clients. “Consumers don’t want to download three apps, so they go to Uber,” says Autocab CEO Safa Alkateb.
And they still have the problem of scale. If a minicab firm based in Preston takes a customer into the centre of Manchester, they’re unlikely to have a pre-booked journey heading the other way and so they’ll come back empty. Ride-hailing drivers can pick up passengers pretty much anywhere in a large city.
That's where iGo comes in. The technology lets private hire firms team up to share their workload between themselves. A driver returning home from the city centre can pick up extra work from a city centre company that hasn’t got enough drivers to meet demand. “It’s all about peaks,” says Alkateb. “There’s always five or six hours in the week when you simply don’t have enough cars. During these peak times you want to retain your customers and keep the drivers efficient.”
Greater efficiency helps retain drivers and leads to a more seamless experience for passengers, who have shorter wait times. “The expectation around waiting time has grown in recent times but this collaboration has helped us to address this issue,” says Saleem. “They don’t want to be ringing around numerous firms to find out nothing is available – and that’s no longer necessary in London because of this soft-merger.”
It could have an even greater impact outside of London, in the second tier of UK cities – places like Leeds, Manchester and Liverpool – where Uber is less competitive. Alkateb points out that Uber is only in 22 cities in the UK, while through the Autocab platform, iGo is available in 320 places in the UK, with more than 70 to 80 million trips a day happening worldwide through the platform. Although ride-hailing apps have had a profound impact in megacities such as the UK capital, it’s a very different story elsewhere. “Our customers can go toe-to-toe in second tier cities and in third tier cities we tend to do better,” Alkateb says.
Ride-hailing has also helped expand the overall size of the private hire market. There’s been a sharp rise in the number of registered private hire drivers in London, for instance, and Alkateb says Uber’s arrival has expanded the overall market. Manchester-based company Street Cars has actually doubled its fleet since Uber arrived in the city in 2014, which operations director Aqeel Arshad attributes to a rise in the number of young people taking taxis. “Our industry is alive and kicking no problem,” Alkateb says. Maybe without Uber they might have grown by 20 or 30 per cent, and maybe they grew 5 per cent.”
Alkateb bristles at the suggestion that his firm – which has been providing software to the minicab industry for decades – missed a trick by not developing its own version of Uber much sooner. Uber’s advantage wasn’t in the software, he says – and indeed it wasn’t even the UK’s first ride-hailing service – but in its willingness to pay huge subsidies to drivers as it grew.
“As a taxi company, you always have to perfectly match supply and demand,” says Alkateb. “If you have too many drivers sitting around for not enough work the drivers walk away and go elsewhere. If you have too many customers and too few drivers customers go away. That perfect matching is why it takes a long time to grow a taxi company – Uber came in and using funding and guaranteed income to drivers to the tune of millions of pounds."
While private, family-owned local taxi companies such as Goldline grew organically over many decades, slowly saving up the capital to expand and improve their fleets, Uber went to Wall Street and raised billions in funding. Six years on, London’s minicab firms are finally fighting back.