Business Technology

With power of Sadiq Khan behind them, can London’s black cabs slam on Uber’s brakes?

7 min read

16 September 2016

Sadiq Khan’s intervention in the London cab market is seen as a boost for black cabs but there are still lessons to be learned from Uber and others, says Smart Design’s Nathaniel Giraitis.

The stand-off between London black cabs and taxi-hailing app Uber intensified this week as Sadiq Khan, London’s charismatic mayor weighed into the row with plans designed to improve London’s cab services.

The policies include offering £65m in grants for black cab drivers who scrap older polluting vehicles, and tightening up rules for private hire companies around insurance and English language tests for drivers.

Uber has hit back claiming that the measures favour black cabs at the expense of taxi hailing apps such as Uber. Whoever you side with – and Khan says his goal is a market where all can flourish – the facts are stark.

According to TfL figures, the average number of black cabs going into central London on a weekday has fallen by eight per cent in the five months between June and November while the number of private hire vehicles rose 11 per cent over the same period.

So how can black cabs fight back against Uber’s encroachment?

Based on our experience of helping to design New York’s first purpose-built taxi cab, we have come up with five key lessons that black cabs can learn from what Uber gets right – and wrong.

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(1) Maximise your inherent advantages

If Uber has taught us anything, it’s that there is no one-size-fits-all solution to urban transportation. Sadiq Khan understands this and is making moves to further highlight when and where black cabs are the best choice. As anyone who has tried to find “their” Uber outside a large train station can testify, hailing a black cab in the densest urban areas is often faster and easier than pulling out your phone.

So Khan’s decision to increase the number of taxi ranks from 500 to 600 and give black cabs access to select bus lanes makes absolute sense. If Uber’s advantage is bringing rides to underserved areas, black cabs’ home-side advantage is where they are already abundant.

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(2) Learn from your competitors

Uber’s early success wasn’t just about low prices or technology, but about removing the barriers to getting a cab. They solved not only the challenge of finding a ride, but also the hassle of dealing with cash. In an all-cashless competitive market, there is no reason for black cabs not to accept cards. Luckily, as of this October, TfL will require all London cabs to accept contactless and credit payments.

While the guarantee of seamless payment will help reduce the hesitation of “just jumping in a cab,” (something you can’t do with private hire), such services have also raised the bar in terms of loyalty, offering promotions and membership schemes which reward repeat use.

On the next page, read the final ways in which London’s black cabs will be able to challenge Uber and drive business growth, including embracing the idea of ride-sharing.

Image: Shutterstock

(3) Celebrate your drivers

Uber’s relationship with its drivers is notoriously fraught. What’s more, Uber has made clear its intentions to eliminate drivers altogether with its autonomous vehicle rollout in Pittsburgh, US. What better time to celebrate the quality of London cabbies who still can beat the Uber GPS when it comes to finding shortcuts through rush-hour traffic?

Again, this involves emphasising black cabs’ unique strengths: as one cabby recently told me, “if you notice you are going over residential speed humps during rush hour, then you can be sure your driver knows a shortcut.”

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(4) Be open to new opportunities

Uber recently moved into food delivery through its Uber Eats service, while taxi app Gett delivers champagne. What additional services can cab companies offer to help city-dwellers manage their hectic lifestyles – dry-cleaning collection, parcel delivery, the school run?

Similarly, the social experiment that is UberPool continues, squeezing strangers into the back seats of consumer vehicles to share a ride. Our research at Smart shows that larger more “public” vehicles (such as the hackney cab) are more conducive to ride sharing.

What’s more, passengers whose journeys have a common starting point or destination, are more open to sharing than random strangers. What could cabs do to encourage shared ridership to and from common destinations (reducing costs for passengers while maintaining revenue for drivers)?

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(5) Don’t lose perspective

Often a disruptor’s advantage isn’t unique, just unfamiliar. Traditional players responding to disruption should remember that there is no endgame in any industry, ever.

Every great innovation becomes the status quo one day, and every new idea is eventually superseded. The best way to respond to the next thing is to learn from it – not just what it got right, but what it missed. For taxi companies, and all the other players in the transportation industry, the wheel never stops turning.

Nathaniel Giraitis is associate director of insights and strategy at design company Smart Design

Following a series of in-car pitches, a Birmingham firm’s reminder service won an investment from Uber and a strategy from CEO Travis Kalanick.