Uber's London Electric Car Fund May Also Be a Secret Weapon
(Bloomberg Opinion) -- Uber Technologies Inc. made a big song and dance in London on Tuesday about adding 15 pence (20 cents) per mile to drivers' fares, with the money going to fund the purchase of electric vehicles by said drivers.
The timing, just days before a major court appeal involving the ridehailing firm, is opportune to say the least.
But it might also be a canny attempt to secure its leading position in London. A bevy of Uber rivals are lining up to enter the market, not least Taxify OU, backed by deep-pocketed Didi Chuxing Inc. Beyond classic cabs, there’s little competition in the U.K. capital now. In other regions, when a new player enters a market it typically tries to lure rivals’ drivers away with incentives.
Driver churn, or loss rates, is a big problem for Uber. In April 2017, tech publication The Information reported that only four percent of new Uber sign-ups were still driving for the company a year later.
The competitive onslaught in London could start as soon as next year. But if Uber drivers know that they will lose the, for argument's sake, 1000-pound nest-egg that Uber has put aside for them to invest in a new electric car, money which they themselves have earned, then it might make them less likely to jump ship for a rival service.
It's what you might call a fare play.
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Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.
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