Taxi Driver Online

UK watchdog to investigate Uber’s acquisition of Autocab

The UK competition watchdog has launched an investigation into Uber’s acquisition of the taxi technology company, Autocab, over fears the tie-up could limit competition in the market for ride-hailing software.

Autocab, which struck the deal with Uber in August last year, provides taxi operators with booking and dispatch software and connects drivers with trips via an online marketplace.

On Friday, the Competition and Markets Authority said it had launched a formal probe into the deal and would consider its “possible effect on competition, including in the supply of booking and dispatch software to taxi companies in the UK, and any potential impact upon consumers”.

The watchdog has until March 26 to decide whether it wants to clear the deal, demand actions from the companies, or enter into a more in-depth investigation. It is seeking feedback until February 12.

In August, Uber said its purchase of Autocab would enable it to begin offering rides to customers in areas that it did not previously cover. It added that it would explore using Autocab’s platform to provide drivers with additional revenue opportunities such as food delivery.

Autocab chief executive Safa Alkateb said the company would remain independent despite the tie-up, with its own board focused exclusively on providing technology to the taxi and private hire industry.

On Friday, Uber said: “We are co-operating fully with the [CMA’s] inquiry to ensure it can conclude its review as quickly as possible. We are confident that this acquisition is positive for consumers, will help local operators grow and provide drivers with genuine earning opportunities.”

The CMA’s announcement follows news on Thursday of an investigation into Facebook’s acquisition of online image platform Giphy. The regulator has become increasingly focused on the potential harms stemming from digital mergers, including so-called “killer acquisitions”, in which big players buy up start-ups in order to nullify competition.

The probe into Uber comes at a difficult time for the ride-hailing app, which has suffered a decline in taxi rides during the global pandemic. The company also faces intensifying competition in the London takeaway market from Just Eat Takeaway.com, which pledged to make life “very very complicated” for it in January. 

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IDFIMH

they'll let it stand this investigation is taking place a long time after the deal went ahead that to me smacks of covering their backsides

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Can't see it going anywhere?

Autocab don't have any vehicles, and there are plenty of different app firms out there.

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IDFIMH

I’ve often wondered why there is only one competition and markets authority.

Its not though - companies have already been told they either tie up with uber and become uber partners or uber will come to their areas

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Think of how stupid the average person is, and realize half of them are stupider than that.
George Carlin

Uber don't have any vehicles either

And not trying to be flippant - it'll be more about the platforms, or what we used to call offices or circuits

So it'll be more about market share and stuff like that, not necessarily how many players there are - there could be umpteen apps, but not really relevant if a couple of apps dominate the market. Just like traditional offices, if one or two ops have a town sewn up, it's not really relevant that there are a dozen one-man-bands.

And, despite Uber being different to the old offices in that they operate across much of the country, to a large degree the markets are still locally based, so they can't just look at the national picture.

And they won't just be looking at app-based providers, since it should be as much about the market as a whole, and whether there are any competition issues, which should also involve more traditional platforms and booking methods.

Idle threat, maybe?

But that's kind of consistent with what I was saying at the time - it's 2016 since Uber last started in a new market in the UK, and they've gone into the easier towns and cities, so Autocab provides an indirect route in to the more difficult locations without the same rigmarole that Uber have gone through up to now.

But I don't think the 'deal' has happened yet, and these things can drag on for months, even years, I think.

Sure it's the CMA that's covering their backsides?

One way of looking at it.

Another way is to use Uber's advertising and PR machines to increase the workload of drivers on circuit in those areas that don't currently have Uber, and in areas that currently have masses of non local Uber vehicles to eventually f*** them all off.

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IDFIMH

They have a few down here.

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IDFIMH

Note that the CMA's deadline for an announcement (by 26 March) is just on whether or not to continue with a more in-depth investigation, so I'd imagine if that happens then it could be the summer until a final ruling is made, or even longer. Apparently there's a 24-week limit to the 'Phase 2' investigation.


Note that the criterion is a 'substantial lessening of competition', which is obviously quite vague, and could encompass lots of different things.

But historically, I think likes of CMA could have had a field day with a 'substantial lessening of competition' in local markets, but I suspect they're just too small to bother with.

But because Uber has a national presence, it's a different ball game now.

Of course, it's all quite technical, and even the CMA's 'Quick Guide to Merger Assessment' is 18 pages.

Still maybe worth a read, though, even ignoring the more technical bits.

I mean, for a start, are we talking 'horizontal', 'vertical' or 'conglomerate' merger?

https://assets.publishing.service.gov.u ... ssment.pdf