UK taxi turnover falls for the first time in 5 years as Uber seizes market share

The turnover of the UK’s Top 100 taxi and minicab firms has fallen for the first time in five years, as they lose market share to Uber.

An analysis of the UK’s largest taxi firms shows that turnover dropped by 3% to £479m in 2015/16, down from £495m the previous year, having previously experienced consistent growth since 2011/12.

The fall in turnover has been caused by the rise of Uber, whose app-based service has revolutionised the industry.

Uber has reset the expectations of what level of customer service users can expect from minicab and taxi companies. However, building up its network has cost hundreds of millions of pounds and been deployed at a pace which no UK taxi company could reasonably be expected to match.

While some larger minicab companies have invested in their own technology – for example Addison Lee now offer location-tracking technology – smaller companies have been forced to look at other ways of increasing their service levels for customers.

Some smaller cab firms are signing up to citywide apps, which provide platforms for customers to order cabs through a range of taxi providers. Other options include improving websites and call centre capability.

The number of private hire vehicle companies dropped by 4.8% to 3,000 in 2015*, and the number could continue to decrease unless smaller cab firms act to combat new technology-driven competitors.

Philip Bird, transport partner, says: “The UK’s minicab industry may face an uphill task to recapture customers, as smaller operators lose market share to larger companies, however much the technology gap can be closed. And while they can also improve the overall customer experience, they cannot match the financial muscle of Uber.

“Uber has offered value and convenience to the customer, so traditional taxi companies in cities need to consider how they deal with that.

“Something as simple as updating a website or optimising it for smartphones could dramatically help firms outside of the UK’s biggest cities where Uber doesn’t operate.”

The UK’s Top 100 taxi firms suffered a drop in turnover for the first time in 5 years


*latest figures available

 

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