Mini-cab firms in Hackney have described how they are struggling to compete with the mobile taxi app Uber, as they cannot afford to offer the same prices.
Their comments came as it was revealed that Uber paid just £22,134 corporation tax in the UK last year, despite making a profit of £866,000 according to a report by the Press Association earlier this week.
Uber is an app which uses a satellite technology to provide taxi drivers with their customers’ location and vice versa, and typically offers cheaper rates than traditional private taxi firms.
Mithat Coskun, director of Sam’s Cars in Hackney, told EastLondonLines: “In five years time, every local office is going to close down, everyone is going to use apps, they [local taxi companies] can’t recover.”
Coskun said he’s lost 20 per cent of his drivers since Uber started operating in London three years ago and his company often misses out on jobs as he doesn’t have enough drivers to cover the demand. “I have a job here but I can’t cover it, because I have no drivers,” he said.
The company director explained that it’s difficult for small firms to offer the same discounts as their rival. He cited the fact that Uber offers a £10 credit to customers who introduce their friends to the service as something Sam’s Cars cannot afford to do.
Uber, founded in San Francisco six years ago, currently operates in 63 countries. “If they lose money in London they can cover it from other cities,” said Coskun.
“The government don’t help us, we can’t fight with Uber, Google, all the big money is behind Uber, if you’re a small company you don’t have resources to fight with big companies.”
Uber’s investors include Google Ventures, the search engine’s investment arm and global investment bank Goldman Sachs.
The National Private Hire Association, an organisation which represents businesses and workers in the transport industry, said it was advising firms to get their own app, and to “not proclaim doom and gloom before it hits them.”
Speaking to EastLondonLines, Donna Short, co-director of National Private Hire Association said: “One thing Uber cannot offer is the personal touch – the rapport that is built up between customer and driver.”
She also pointed out that Uber does not offer individual training for drivers. “Best thing for drivers to do is to consider the efforts that their company are making to compete with the app,” said Short.
Sharon Thomas, a former taxi driver who regularly volunteers as a phone operator taking bookings for New Morning Cars and Kwick Cars which are based in Hackney, told EastLondonLines that both companies had lost drivers to Uber.
But one of the biggest issues for Thomas is that customers are expecting prices that small businesses can’t offer. “Quite a lot, they’ll ask me for a price, and then they’ll say ‘oh Uber does it for this price,’ I’m so sick of hearing about Uber,” she said.
Despite customers expecting cheaper fairs, Uber has allegedly increased prices during busy periods to tempt off duty drivers back to work to meet demand.
“Good luck to drivers if they can make money, cabbyin is slow, you can’t blame it all on Uber, especially as the busses are 24 hours, but they are going to put a lot of small companies out of business,” said Thomas.
The High Court also ruled earlier this week that Uber did not break the law, after questions were raised over whether its software functioned as a taximeter.
Only black-cab drivers are allowed to use taximeters in London, which calculate the customer’s fair based on time and distance of their journey, but the court ruled in Uber’s favour as traditional metres do not use satellite technology.
Uber had not responded to EastLondonLines’ enquiries at time of writing.