Taxi Driver Online

CMA clears Uber and Autocab deal

https://www.gov.uk/government/news/cma- ... tocab-deal

The CMA announced today that it has cleared Uber’s purchase of Autocab, following a Phase 1 merger investigation.

The CMA (Competition and Markets Authority) opened its Phase 1 merger investigation into ride-hailing company Uber’s acquisition of GPC Software Limited (Autocab) in January 2021. Autocab supplies booking and dispatch technology software (BDT) to taxi companies. It also operates a referral network for taxi and private hire operators called iGo, where those companies can send and receive jobs to each other.

The investigation considered the deal’s possible effect on competition in the supply of BDT, as well as referral networks, and any potential impact of the merger on taxi companies who are Autocab’s current BDT customers. After thorough scrutiny, the CMA has found that there is only limited indirect competition between Uber and Autocab, and the CMA did not find evidence to indicate that Autocab was likely to become a significant and more direct competitor to Uber in the future.

The CMA also considered whether Autocab and Uber could try to put Autocab’s taxi company customers that compete against Uber at a disadvantage by reducing the quality of the BDT software sold to them, or by forcing them to pass on data to Uber. However, the CMA found that there are other credible suppliers of BDT and referral networks that these taxi companies could switch to if Uber were to reduce the quality of the Autocab service or force them to share their data.

Joel Bamford, Senior Director of Mergers said:

"Millions of people across the UK rely on taxis every day and technology has transformed the way this industry works. It is therefore important that mergers like these are properly scrutinised to ensure that customers aren’t negatively affected.

"After a thorough investigation, the CMA has found no competition concerns as a result of this deal. This is because the companies are not close competitors, the two businesses will continue to face competition from rivals and Autocab’s customer taxi companies can switch to credible alternative providers if they wish."

Notes to editors

Autocab develops and supplies two main types of software to taxi companies in connection with taxi services. This includes (i) booking and dispatch technology enabling taxi companies to connect drivers to end customers and (ii) the iGo network (iGo) which connects demand for taxi trips with taxi companies that can supply the services. Taxi companies use iGo when demand arises for services outside their own service area or when their customer demand exceeds the number of drivers they have available. Other companies, such as travel and emergency transportation companies, use iGo because they themselves do not supply taxi services but have customers who require such services.

For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.

This seems to be the decision document here.

Only six pages, and haven't had proper look yet, but suspect it will make the Supreme Court's decision seem like an easy read

https://assets.publishing.service.gov.u ... on_---.pdf

Well I said they would

It's not as if there isn't quite a few companies out there doing dispatch software.

I heard a rumour the other week that Uber are in talks with Icabbi over some sort of arrangement (not takeover) now that could have more serious implications

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Taxis Are Public Transport too

Join the campaign to get April fools jokes banned for 364 days a year !

Indeed, but don't think they've examined how Uber might use the acquisition to muscle in to local markets indirectly, and how that might distort things in terms of market dominance.

And, if you look at it in terms of a proper analysis of the market, interesting that their document via the link uses the t-word 39 times, but only mentions private hire once


Also interesting is the one mention of private hire, which oddly seems to differentiate taxis and private hire vehicles, but then the rest of the document just refers to 'taxi companies' etc. 39 times.

The document also refers to Uber as a 'ride-hailing' service, so that implies that it's neither a taxi nor private hire provider

(Also slightly strange is the use of PHVs in brackets after 'private hire vehicles', which is normally done if it's intended to mention private hire vehicles later in the document, and thus the abbreviation PHV would be used instead. But it's not mentioned again. Once )

By the way, I didn't count the number of t-words in the document. Use the search function (usually Ctrl-F) and that will generally tell you how many times any word occurs

I wasn't anoraky enough to actually count them all

This Uber buyout of Autocab was never going to be banned.

They are different parts of the trade, Uber being an operator who happens to have their own data systems, and Autocab who are a data systems supplier.

Autocab own no licensed vehicles, they have no fleets of anything. In short they are a software company that has operators using their equipment.

My view is this is Uber's way of getting out of the operator's side of the trade, and for that we should all be hopeful.

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IDFIMH

But I don't think Uber were ever interested in the software side per se, rather than as a backdoor into local markets, in particular markets that they haven't cracked yet, and would find it more difficult to get into than they have up to now. The CMA seems to have ignored all that.


But remember all the stuff about using Autocab operators to cover jobs booked using the Uber app...


Maybe, and indeed the Supreme Court ruling may be a factor in that regard.

But even if Uber just became more of a brand and app, an in effect more of a proper arm's length booking agent, I don't think their influence on things like pricing, cross-border working and how the labour market works is going to disappear overnight.

They may well have ignored it, or they might have taken the view it's not really a competition issue that falls under their remit.

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IDFIMH

But that isn't really a competition issue.

Uber are passing work on (albeit for a commission) they are not taking it from anyone. No different from one firm passing work to another when they can't cope with demand.

In fact Uber are, in my view, allowing more competition by putting non Uber vehicles on their app.

They are adding and offering a local taxi option alongside the usual excel and super excel options.

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IDFIMH

Overnight most certainly not, but I think it could effect cross border in the short term.

Uber have loads of operator licenses, however the Autocab operators do not.

So should Uber want to take a step back fully, then those local Autocab operators will only be using local cars.

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IDFIMH

That's certainly a plausible view - Uber were quite upfront about how the deal would get them into markets where they don't currently have a presence, such as Aberdeen.

So now effectively there's an additional provider in Aberdeen, thus good for competition and the consumer

Not saying I know the software market too well, but never really saw an issue in the 'supply of software', which is what the CMA looked at, but which I doubt Uber were ever really interested in anyway.

Which is why I thought they might look at the issue from the perspective of supply and demand at the passenger and driver level, ie a totally different market to the one they actually looked at, which was about supply and demand from software providers to cab operators.

But which, as you say, could have positive and negative affects as regards competition issues. For example, it lowers the 'barriers to entry' for Uber in the likes of Aberdeen, which I suspect the CMA would regard as good news.

But if Uber used an Autocab tie up to further dominate a market then that could be bad for competition, particularly from the driver's perspective if Uber increasingly became their only option, as is generally bad for drivers if there are few operators in their local area.

That's just a couple of examples, but we'll never know now, because obviously the CMA don't think that side worth examining. And, of course, historically the authorities have never shown much interest in that side of things anyway (possibly because each market is very local and to that extent there are hundreds, if not thousands, therefore probably not worth getting into).

So I agree and disagree on the competition point. But I certainly disagree when you say: "Uber are passing work on...they are not taking it from anyone."

If they're getting work in areas where they currently don't operate then they must be taking work from existing operators. And it would only snowball from there...

I'm not an operator (obviously!) and Uber has zero presence here. But I think local firms elsewhere would be cutting their own throats by covering Uber bookings with their own cars, thus providing Uber with an easy way into local markets they currently have no presence in.

It's a bit like the app version of what Grandad and Edders are talking about in another thread - drivers and other offices covering work and offering cheaper fares to poach customers.

I mean, cab firms generally avoid passing on work like the plague, because they know what might happen.

But to me this seems more or less what Uber are up to, just on an epic scale and using an app instead of the good old dog and bone.

In areas where they currently have a presence they are passing work on, or offering the option to punters, to local taxi/PH ops.

Clearly in areas they don't have a presence they aren't passing on any new work, but the local Autocab operator will be gaining work from their competitors, or from the ranks.

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IDFIMH

Fine for the Autocab operator, although it will come at the price of paying Uber a commission, very possibly on a fare that would be cheaper than without the Uber option.

And any work that the Autocab operator will gain would be at the expense of other operators, and to a degree from the ranks, as you mention.

So fine for the Autocab operator, assuming they don't mind paying a commission on work that is currently theirs. But bad for other operators and those on the ranks to the extent that some of their work ends up with the Autocab operator.

So if you look at the local trade as a whole, it helps no one, except to the extent that Autocab operator gets more work at the expense of other locals, and at the price of a commission to Uber.

But it certainly will help Uber, to the extent that they'll get commission via their app in areas they don't currently cover, with relatively little expense and effort required in terms of opening up that new market.

So apart from the local Autocab operator, and to a degree its drivers, I can only see the downside for the rest of the local trade. And not just in terms of simply losing work to competitors, but in less direct ways such as downward pressure on fares.

(Last time round I suggested that once Uber had gotten established in new markets via Autocab, it could cut out the middleman and start taking on cars directly, so the Autocab route would be an easy way to gain a toehold without starting from scratch with no drivers and no work. Thus the Autocab operator would just be cutting their own throat.

However, following the Supreme Court ruling, that might militate against taking on drivers directly, so that might change the dynamic. Of course, a lot will depend on whether or not the court ruling permeates down to mainstream firms, which is obviously a big unknown. And with the post-Covid state of the market also being a big unknown, it'll all take a year or three to play out. We'll see )

Big pow wow being arranged by those not best please about Autocab and Uber joining up.

Courtesy of Taxi Point. https://www.taxi-point.co.uk/post/priva ... cquisition

And nothing will come out of it other than words and hot air.

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IDFIMH

uber will just take the cream for their own cars and all the dross will go to the local cars,word will spread,hey presto,all the local cars dump their present company and jump over to uber,market taken over by the back door

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i started out with nothing and ive still got most of it left