The Mere Golf Resort & Spa - Tuesday, October 23, 2018

Panel 1 The future of the taxi – who will own the market?

Panellists

Proceedings began with a quick interactive vote to establish the composition of the delegates at this year’s ProDriver Congress - 35.7% classified themselves as private hire operators, 23.8% as chauffeur firm operators, 23.8% as suppliers and 16.8% as “other”. Nobody self-identified as a taxi operator.

The first panel session, under the chairmanship of Professional Driver editor Mark Bursa, concerned itself with the future of the business, and in particular question of who would own the market.

Bursa set the scene by explaining that the industry had already seen constant change ever since the first minicabs were introduced in 1961. Regulation, branding, the need for eco-responsibility and the arrival of powerful new entrants such as Uber had all followed. Now, another wave of operators was arriving - Moia owned by Volkswagen, Chariot, owned by Ford, City Mapper, and ViaVan, which is backed by Daimler.

Many of these new ride-sharing players had more in common with bus services than the private hire trade. And future players might include Google’s Waymo, which was developing autonomous vehicles.

Bursa called on Rich Pleeth to explain what Taxify, another new entrant, was going to bring to the market. Pleeth explained that Taxify tends to go to cities where ride-sharing was already an established habit, often thanks to Uber, which he reckoned had spent about $250 million in order to establish its position.

He was “hoping to break Uber’s monopoly down a bit” without spending too much money; the most important areas to invest in were “ETA” - cars arriving as quickly as possible after a booking is made - and price, where Uber had already established rates at low levels. Other areas were quality, tech and brand. Taxify recently received €175 million of investment from Daimler and was negotiating with TfL for a London licence after a false start last year.

A second interactive vote established that Uber had impacted negatively on the business of 40.4% of delegates, with 23.1% saying Uber had had a positive impact on the business and 36.5% saying that the impact had been neutral. A further vote established that only 8.2% of delegates thought Uber should be granted a full five-year licence by TfL, with 77.6% being opposed.

David Goldring of Europcar’s Brunel division said Uber’s roadmap was clear, and that drivers were not part of their end-game which was for autonomous vehicle fleets - in that sense, drivers who worked for Uber were “turkeys voting for an early Christmas”. He thought it was therefore short-sighted to have granted Uber a licence.

Mike Galvin of Karhoo said that the role of the regulator was very clear - to ensure public safety as far as possible. He thought that the regulator should avoid most of the other areas of controversy. Any player that followed the regulations in the same way as everyone else, including Uber, should get a licence.

One delegate said that Uber only appeared to be interested in the value of the information it could gather about its customers, rather than the ride business as such, and questioned how level the playing field really was when it came to new entrants, especially in the area of tax.

Taxify’s Pleeth conceded that it only had twelve employees in the UK and that most of its tax was paid in its native Estonia, where it had over 300 employees. Pleeth also pointed out that as a director, he had a fiduciary duty to his shareholders to do the best for them, although the company did pay all “appropriate” taxes in the UK.

Jonny Goldstone of Greentomato Cars said his company paid its VAT in the UK and that the rules needed to change - if people were operating and earning money in a particular place, they should pay taxes in that place, a sentiment that drew applause from the delegates.

Blacklane’s Adam Parken said his company also paid “appropriate” taxes but was in a similar situation to Taxify, having 300 staff in Germany where most of the work was done. However, he emphasised that Blacklane only operated in the UK via registered chauffeur companies, rather than directly with private individuals.

From the floor, Dominick Moxon-Trisch pointed out that the EU was attempting to get to grips with many of the issues raised via the Fair Taxation of the Digital Economy initiative.

Mike Galvin of Karhoo was fairly sceptical about the extent of the impact of new entrants. Most of the same operators were still around, and there had been some consolidation but not a huge amount. There would be changes in the way people did business - there no longer seemed to be as many long-term contracts, for example. Even when it came to changes such as replacing drivers via autonomous vehicles, the role of fleets would still be important, not least because the car manufacturers valued them as large customers.

Delegates were asked to vote on the question of whether the industry needed national licensing along the lines of that already in place for the PSV and HGV sectors an overwhelming 80.8% thought this was a god idea, with only 11.5% opposed.

Greentomato Cars’ Goldstone expressed his support for national licensing, although Mike Galvin pointed out that most of the discussion in the industry was about subjects such as minimum national standards and national driver databases rather than national licensing as such.

Goldstone said players such as Karhoo were part of the trend toward consolidation and aggregation. He thought that it was probably easier to see how things might settle down fifty years ahead rather than in ten years’ time.

He foresaw a future featuring autonomy, pods and a service that might have become so commoditised, it would be almost indistinguishable from public transport. Some might have drivers-turned-concierges in them to help customers. With continuing consolidation among the car makers, there might be just a few big players running the whole thing. The fleet operators of today might evolve to be the people who maintain the cars, which would still need cleaning and so on.

Blacklane’s Parken thought complete commoditisation of the service was unlikely, as some customers would always want to travel in nicer cars or enjoy better service.

A final interactive vote for this session had 56% of delegates agreeing that ride-sharing - the model apparently followed many recent new entrants - should be allowed as private hire service, with 36% thinking it should be allowed but with separate licensing requirements. Only 8% thought it should be prohibited altogether.