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How is Uber for Business affecting both the car hire industry and taxi industry

Launched in July 2014, Uber for Business is a travel management platform designed for corporate customers. It takes the traditional Uber format and uses it to enable companies to deal with employee travel, customer travel, VIP client transfers and more. Tips and payments can all be handled online or via the Uber for Business app. Most newspaper readers have seen the images of black cab drivers disgruntled by the success of Uber drivers on their turf. Accordingly, commentators expected Uber for Business to have a significant impact on the car rental and taxi industries. Has this been the case?
Snapshots of the car rental industry: 2014 and now

A recent press release published by BVRLA.co.uk states that In 2014, the car rental industry was a strong aspect of the UK economy, worth around £25bn annually and sustaining more than 317, 000 jobs. In 2017, the car rental industry (which was expected to have grown 3.6% between 2012 and 2017) is still growing. Between 2016 and 2020 it is forecast to grow by around 5.6%. Nevertheless, there are conflicting reports on the matter, with some articles suggesting that over-optimistic car rental company managers have purchased far too many vehicles and now have fleets that are too large for a dwindling customer base. Is this because of Uber for Business? Even if we do pay attention to the reports about car rental companies overestimating fleet sizes, there is no denying that car hire is still big business.

A quick look at the taxi industry

The taxi industry is a more direct competitor to Uber. In London (the eleventh city in the world that was taken over by Uber), An article published by the theguardian.com about the rise of Ubers monopoly in London stated around 30,000 people download the Uber app each day. This is surely taking business from London's traditional black cabs, and Uber for Business is no different. Both traditional Uber and Uber for Business offer a quick, effortless way to hire and pay for a cab. Nevertheless, one thing that has made black hansom cabs in London a particularly difficult competitor for Uber is the tradition factor. Tourists tend to prefer a journey in a black cab to a journey in an Uber because it gives them a sense of authentic local flavour. This is something that, for all its convenience and its often competitive pricing, Uber cannot replicate. The story with business travel is more complex. Though foreign business delegates in London may prefer the authenticity of a journey in a black cab, Uber for Business has replaced traditional taxis throughout the UK when it comes to other types of business travel.

Summary: has Uber for Business impacted on rental companies and taxi companies?

Where rental cars and taxi companies provide a service that is directly comparable to Uber, Uber for Business has managed to snatch a significant part of these companies' customer base. A blog post published by carhireexcess.insure about how technology is impacting the car rental industry stated that a study conducted in 2016 by a large travel and expense management firm found that a total of 10% fewer journeys had been taken in rented vehicles compared to previous years. Between the years of 2014 to 2016 the car rental industry fell by 15%.

However, some types of business car hire and business taxi provision offer services that still give them the edge over Uber for Business. Traditional black hansom cabs offer an 'authenticity factor' that Uber currently cannot replicate. Moreover, many business travellers may prefer the additional independence that they can get from having a hired vehicle that they can drive themselves. Nevertheless, for the majority of business travellers - who want a reliable means of transport that offers competitive rates and a simple booking and tipping system - Uber for Business is a real threat to traditional taxi and car rental companies. It is likely to continue to affect these companies for many years in the future.

25 Jul 2017 13:11

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About Boris Dzhingarov

Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as Tech.co, Semrush.com, Tweakyourbiz.com, Socialnomics.net. Boris is the founder of MonetaryLibrary.com and cryptoext.com.




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