Protests by London Black Cab drivers outside Hailo offices. Protests by taxis in Paris against Uber. In some case actual violence is taking place across the globe as private car hire apps and taxi apps gradually start to eat away at the long-controlled taxi and private car markets. What does it look like on the ground, what is the long game being played, and when you’re a driver what choice will you have? For, clearly, the stakes are high. Uber is reportedly now worth $17 billion, making it more valuable than Airbnb, Dropbox and Chinese handset maker Xiaomi - all valued at over $10 billion so far. That's the view of sources taking to the WSJ yesterday, and it now means Uber is probably looking for far more than the $500 million it’s said to be raising. Uber was valued at $3.5 billion a year ago. And even if most have raised far less funding than Uber, one cannot overlook the rash of Taxi apps that have proliferated across the planet in the last few years. GetTaxi (based out of Israel) raised $52M. Lyft raised $250 Million in April. And of course, there are many more. Out of them, perhaps only Hailo, which has raised $125.1M, has caused consternation for Uber in the major city market of London. Of course, it’s unfair to compare private car hire apps with taxi apps — but increasingly they are attacking similar markets in a sort of pincer movement. Last week London became the scene of angry exchanges between Black Cab drivers and Hailo, after it was leaked that Hailo was applying for a license to service private “mini cabs”. Cab drivers yelled “Scab” outside the offices, and the police were called to break up scuffles. But if you look under the hood at the substance of what is going on, you find two different trajectories of the companies concerned ultimately converging on both the driver and the rider. First, some numbers. Central London is a city of 10 million people. By some estimates there are around 60,000 cabs, taxi and cars for hire in London. Of that only around 10% are linked to a dispatch system or operator. For example, the long established Addison Lee (which has its own app) has a 6,000 strong fleet. These drivers were once summoned first by phone call, but now by app and largely on account. Then there are the Black Cabs. There are around around 24,000 black Cabs in London and most of them are driven by drivers who have spent a year of their lives memorising the 25,000 winding medieval streets within a six mile radius of Charing Cross station. In no other city on the planet will you find taxi drivers like this. Although there were several apps prior to its arrival, the persuasive combination of Hailo's three original Black Cab-driving founders — Russell Hall, Gary Jackson, and Terry Runham — together with entrepreneurs Jay Bregman, Ron Zeghibe, Caspar Woolley, has proved potent enough to capture 500,000 Hailo accounts holders in London. For its part Uber has been filling out its offering in London from the high to the lower end of the market. That is to say, from Uber Lux down to Uber X. Uber Pop - the P2P Lyft competitor - is not here yet, but is running in Paris, Berlin, Barcelona, Brussels and Milan. Uber claims ‘X' is 30-50% cheaper than a London Black Cab - you get a Black Prius. But no, they say, we’re not undercutting the market. My personal experience chimes with this. Mini cabs are cheaper than Black cabs, but are rarely available on apps with any traction. Uber has a healthy amount of stock in the system. And flip open your Google Maps app in London these days and - if you have the Uber app installed already - you will see a little Uber logo when you look for directions next to Walking and Driving. The notable thing here is the absence of any competitor app. As Ron Zeghibe, chairman of Hailo, pointed out to me, competition law may have “something to say” about that down the line. Though for now, Hailo is not sweating this development. Yes, Uber has been trying it’s Stateside gimmicks in London - delivering kittens, ice creams and cocktails. This may seem like cleaver wheezes, but it’s a clever test of a future delivery infrastructure, which hints has Uber’s ‘other’ future as a delivery provider. But what has gotten the London market hot under the collar though is not the delivery of ice-cream, but Hailo applying for a private car licence on top of the service it delivers to Black Cab drivers. 'Till now Hailo has been exclusively for Black Cabs. Black-cab drivers argue - with the law - that it is illegal for private 'mini-cab' cars vehicles to be fitted with a taxi meter. This is their beef with Uber, and, if Hailo is successful in extending this to private cars, this will be their beef with Hailo too. But hold your horses. Zeghibe puts it thus: “People want a choice.” Meaning, for Hailo to compete it will have to start offering cars on its app which go up the food chain to the Mercedes S-Classes and BMWs which some people - read: business people - want to ride in. So while Black Cab unions hurl insults at Hailo, in fact it’s about creating a class of vehicle in the app that is never likely to compete with the all-conquering Black Cab. And right now all the private car app competitors have exec cars (Mercs, BMWs, Jags). Even smaller, tiny, cab apps most people in London have barely heard of now do corporate work. So to be credible and maintain competition, Hailo needs to move into this market. So, Hailo was not being duplicitous in its application for a private license - it simply needs to be able to offer more than a Black Cab to compete against both Uber and the Addison Lees of the market. London, however, is unique. Londoners are in emotional hock to the trustworthy Black Cab drivers who understand its medieval streets. Out there in the wilds of Milan, Paris and Rome, it’s a different story. Cab drivers there do not offer the same kind of service - many will have to look on a map when you give directions. So in many respects the cab drivers there - unlike in London - have not put themselves in a position where they can easily defend what they do. There are too many anecdotes to mention about Paris in particular. Here’s a recent Facebook post by Christian Hernandez, co-founder of White Star Capital (reproduced with permission): "True story: Arrive in Paris. Find cab, put bags in. Cab had a third row seat so 6 yr old son is excited to sit in the back. I smile at the driver as I pull down the seat and say "you just made his day". He opens the trunk (how nice of him, I think, let him climb in through the back). Instead he takes our bags out and tells me he can't be bothered by our antics and to find another cab... Oh I miss you Paris Cabbies. Back to Uber and Chauffeur Prive... — feeling annoyed at Paris Gare du Nord." Parisian drivers are doing themselves no favors. Once a car is tracked by GPS, has SatNav and is connected to an app, it's just another marketplace. Perhaps this explains why — as Uber’s Jo Bertram, London General Manager at Uber, explained to me — Uber is so interested in the rating a driver gets, not the frequency with which they use their app. It's the driver that is the one differentiator here. Clearly, drivers with the best ratings by riders are the sought-after commodity - this is the only way an app platform can tell one driver from another, whatever service they are on. And it's those best drivers that may ride what I like to call Hailo’s 'Trojan Horse’ into the business market. Hailo, of course, doesn’t call it that. “London is special. In London we’ll always be led by Black Cabs, but that doesn’t mean our customers don’t deserve choice;” explains Zeghibe. What does he see in a year’s time? Perhaps, he explains, a Black Cab driver, equipped with that incredible Knowledge of London’s streets, choosing to do part of his work in an Mercedes S-Class driving round London’s business men and women. All on — of course — the Hailo app. So while Uber is portrayed internationally as the brash kid, smashing down the walls of old incumbents, could it instead be that Hailo, working with local licensed Taxi firms, plays a much longer game with the most experienced drivers? It’s a tantalising thought. For its part, Uber continues to fight it’s wing of the pincer movement on the old world. As Western Europe manager Pierre Dimitri tells me, “We see a hugely regulated industry. We’re not surprised there’s competition.” As he says, drivers are already facing the possibility of using more than one app depending on what their ‘mode’ is. For while the 'hardware’ of the cars that drives you around might be different, it’s the ‘software' of the driver that varies. In that environment, drivers face a future where the collective bargaining on the old world no longer applies. Are you a good, well-rated driver? Do you know your way around the city? Do you prefer being a taxi or a chauffeur? Will you let the kids ride in the third seat at the back? Then pick your app. Or the app will pick you.
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