Uber says ridership up 850 percent after taxis hold London to ‘ransom’

Uber’s British ridership went up 850 percent yesterday thanks to black cab protests that left Londoners snarled in traffic.

At least, that’s what the taxi-booking app’s U.K. general manager, Jo Bertram, told newspapers. There’s no way of verifying the figure, as she declined to reveal exact numbers for “market sensitive reasons.” But what with all the publicity from the protests, it makes sense.

“Unsurprisingly, the LTDA [Licensed Taxi Drivers Association], which is stuck in the dark ages, is intent on holding London to ransom and causing significant economic impact to Londoners today, estimated to be £125m,” she said, according to Forbes.

Steve McNamara, from the LTDA, responded: “We did not set out to cause disruption to Londoners,” the Telegraph reported. “It is nothing to do with technology, some of the taxis have been using apps for years. The difference is all taxis have to operate legally they should have to apply for the same rules as everyone else.”

While cabbies protested, Uber curried favor with customers by offering discounts.

In Germany, where there were also protests, Uber e-mailed clients to offer a 50 percent discount on shared rides all day, Reuters reported. In London, a full-page advertisement in the evening papers offered new customers 20 pounds (about $34) off their first trip.

The taxi industry’s strategy may have backfired by handing Uber a huge marketing opportunity that appears to have paid off.

“What you are seeing today is an industry that has not faced competition for decades,” Pierre-Dimitri Gore-Coty, Uber’s regional general manager for Europe, said of the protests in an interview with Reuters. “Now finally we are seeing competition from companies such as Uber which is bringing choice to customers,” he said, adding that the taxi industry in most countries was “highly regulated” and “not pro-consumer.”

Regulation is at the heart of the problem. Taxi drivers say they are burdened by rules and fare taxes that don’t apply to Uber.

In France, a government-appointed mediator is preparing legislation to resolve the conflict, the New York Times reported. “One proposal, which has the potential to challenge Uber’s business model, would allow consumers in France to see only licensed taxis on an app that would be created by a government-run body,” the Times said.

In Spain, public works and transportation ministers told the Local newspaper that the country wants the European Commission to intervene to “clarify this subject as much as possible.”

Neelie Kroes, the European Union’s digital commissioner, came out strongly against the protests on Wednesday, tweeting: “Entrepreneurs disrupt, it’s what they do, and our economy needs them. Ignoring them, banning them or striking won’t help us manage disruption.” In a blog post she wrote:

Whether it is about cabs, accommodation, music, flights, the news or whatever.  The fact is that digital technology is changing many aspects of our lives. We cannot address these challenges by ignoring them, by going on strike, or by trying to ban these innovations out of existence.

That is why a strike won’t work: rather than “downing tools” what we need is a real dialogue where we talk about these disruptions caused by technology.

As for Uber’s fate, the popular messaging service WhatsApp could be instructive. The app is especially popular in Europe, where users can avoid costly charges for cross-border communication. Regional telecoms blocked the service at first because of the competitive threat. Local regulators eventually intervened and required companies to open their networks to the San Francisco-based start-up.

Related:

The war on Uber continues. French taxi-drivers threaten “escargot operation” in protest.

Wars on private taxis and Tesla show transportation ripe for disruption

Gail Sullivan covers business for the Morning Mix blog.
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Nick Kirkpatrick | June 12