Uber – a disruptive technology?

Uber’s arrival in London over the last two years has received a mixed response. By some it has been lauded as a progressive solution to their transport woes. By others it is regarded as an aggressive, and fundamentally unfair, competition for black cabs and has been heavily criticised over its perceived tax avoidance. There were 500,000 Uber users in London in 2014 and Uber expects to have 42,000 drivers in London by March 2016. Whichever side of the fence you’re on, Uber is undoubtedly generating rapid and large scale change.

The black cab is an iconic symbol of London. Along with the London Bus, it made an appearance in both the opening and the closing ceremony for the London 2012 Olympics. Something about their longevity and the requirement for ‘The Knowledge’ makes the black cab a fitting symbol of the capital. There aren’t many Londoners who wouldn’t be sad to see the end of black cabs, but that doesn’t mean that they’re not in favour of, or indeed using, Uber. According to research by PMLR and YouGov, 55% of Londoners agree that ‘services like Uber and Cabbie are good for London’ compared to 16% who disagree, yet 42% of the same sample disagree that ‘black cabs will probably not exist in London in 20 years’ compared to 30% who agree.

It would be untrue to claim that Uber won’t have any negative impact on the black cabs but this competition is not necessarily a bad thing. Black cabs have enjoyed a near monopoly over the London taxi market for decades. Whereas the requirement for ‘The Knowledge’ previously acted as a significant barrier to entry into the market, the invention of the SatNav has negated some of that advantage for a mere £30.

Disruptive technology tends to be a good thing for society; without it we’d all still be riding around on horseback on the basis that the engine gave the car an unfair advantage. Uber’s technology allows it to cover a myriad of users that black cabs would never be able to serve: the majority of Londoners cannot simply walk out of their front door and hail a black cab. Providing they have a smart phone, they can hail an Uber from anywhere inside the M25. The majority of Uber’s market aren’t people who previously used black cabs: Uber has persuaded people off London’s crowded public transport system and out of their cars.  An insightful article by Diane Coyle for the Financial Times discusses why Uber should be seen as a complement to, rather than a substitute for the traditional taxi.

Uber is clearly not perfect, they are evidently not shy of exploiting loop holes in the rules if given half a chance, but we shouldn’t let the black cab Vs Uber debate take away from the benefits of Uber either now or in the future. London’s public transport system is stretched, and even with the significant investment in Crossrail and Crossrail2 over the next few decades it seems unlikely that this problem is going to go away. Uber, or its future incarnation, could be part of the solution. Uber have already launched UberPoP, which allows users to share rides. While this has experienced teething difficulties and has been banned in several European cities, it is a clear that this taxi-sharing concept will take off at some point in the future.

At a time when the prevalence of the sharing economy is increasing, and driverless cars are no longer consigned to the realms of Sci-Fi films, progressive solutions to London’s transport problems ought to be actively encouraged. So will black cabs still be around in 20 years’ time? Possibly but I’d rather be in a driverless car…

Lucy Dean 

Lucy is a Senior Consultant at Volterra 

Image: Classic black cab moment by Lars Plougmann licensed under CC BY 2.0

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e: aobyrne@volterra.co.uk
t: +44 020 8878 6333

Alex O’Byrne, Associate at Volterra, is an experienced economic consultant specialising in economic, health and social impact, economic strategy, project appraisal and socio-economic planning matters.

Alex has led the socio-economic and health assessments of some of the most high profile developments across the UK, including Battersea Power Station, Olympia London, London Resort, MSG Sphere and Westfield. He has significant experience inputting to EIAs and s106 discussions as well as drafting economic statements, employment and skills strategies and affordable workspace strategies.

Alex is also experienced at economic appraisal for infrastructure. He was project manager of the economic appraisal for the City Centre to Mangere Light Rail in Auckland. He also led the economic and financial appraisals of the third tranche of the Transport Access Program for Transport for New South Wales, in which Alex developed and employed innovative methodological approaches to better capture benefits for individuals with reduced mobility.

He is interested in the limitations of current appraisal methodologies and ways of improving economic and health analysis to ensure it is accessible to as many people as possible. To this end, Alex recognises the importance of transparent and simple to understand analysis and ensuring all work is supported by a robust narrative.

Alex holds a BSc (Hons) in Economics from the University of Manchester and he was a member of the first cohort of the Mayor’s Infrastructure Young Professionals Panel.


Senior Partner

e: eevans@volterra.co.uk
t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.