Uber’s Rocky Road To Growth In Europe: Regulators, Rivals And Riots
Ten years since it was launched by controversial cofounder Travis Kalanick, Uber is finally set to go public on the New York Stock Exchange in a listing that could see it valued at $82.4 billion.
While Uber, available in 600 cities, is probably the best-known taxi app in the world, it’s had a tough old time in Europe since it went international in December 2011, with a launch in Paris.
Uber is ubiquitous in the U.S., but there are several cities in Europe where Uber has failed to gain traction. Regulators are often the main roadblock—the app has been banned in Hungary and Bulgaria, and some services have been banned in cities across France, Italy, Finland, Germany, and the Netherlands.
UberPop, the cheapest Uber service with the exception of UberPool, has proved to be highly controversial in Europe as it allows drivers who are not licensed to drive taxis to pick up passengers in their own cars (it’s the same as the company’s UberX service). Courts in France, Germany, Italy and Norway have all ordered it to be banned, although some of these bans were only temporary.
In July 2017, the European Court of Justice ruled that any European country can legally ban UberPop without having to notify the European Union.
The bans often came after protests from licensed taxi drivers brought large parts of bustling cities grinding to a halt.
The Uber protests in Paris have been among the biggest. In June 2015, there were flares and fires at a Paris Uber protest where taxi drivers complained that the American app presented them with unfair competition. Licensed taxi drivers clashed with police again in January 2016, when 20 arrests were made, and there have been a number of smaller protests since, where scuffles have broken out.
When policymakers make UberPop or UberX illegal, the Uber app can sometimes only be used to hail a licensed taxi.
It’s not just regulators that have slowed Uber down in Europe. Over the years, a plethora of European competitors have emerged. From Wheely in Russia to Taxify (now Bolt) in Estonia, entrepreneurs across the continent have tried to stop Uber in its tracks, as have several international ride-sharing services that have expanded into Europe.
Meet some of the businesses that have gone up against Uber over the past 10 years in Europe.
Founded in Israel in 2010, Gett is an on-demand transportation app that connects people with cars and couriers. It’s available in over 120 cities in Russia, Israel, the U.K., and the U.S., where it is branded as Juno following a local acquisition.
Gett doesn’t employ drivers or own vehicles but collects a fee for linking the two. That’s the same as Uber. But unlike Uber, Gett is available only to licensed taxi drivers.
The ride-hailing app is often used by people who to get from A to B quicker than they would with Uber, as Gett drivers typically don’t need to use a smartphone or satellite navigation device for directions. Gett drivers can also use bus lanes in some cities, enabling them to zip around faster.
In London, Gett says that roughly half the city’s licensed black-cab drivers are signed up to its app. These drivers are required to pass a test known as “The Knowledge,” which involves learning roughly 25,000 streets and 20,000 landmarks and places of public interest.
In a bid to raise its profile, Gett has tried out a number of publicity stunts. For example, it partnered with champagne producer Veuve Clicquot in July 2015 so that Gett customers could get bottles of bubbly delivered to their door in 10 minutes.
Gett announced this week that it has raised $200 million at a $1.5 billion valuation, adding that it could follow in Uber’s footsteps and go public as soon as early 2020.
Gett is hoping to make a small profit by the end of 2019 and recorded a loss of just $3.5 million in 2018, which is minuscule compared to Uber’s $1.8 billion loss in 2018.
Total funding to date: $893 million (via Crunchbase)
Formerly known as Taxify, the Bolt ride-hailing app was founded in August 2013 in Tallinn, Estonia, by Markus Villig, when he was 19.
Bolt looks and feels a lot like Uber, but it’s different in one key way: Drivers seem to love it. That’s partly because Bolt drivers pay only a 10%-to-20% commission back to the service, compared with up to 30% with Uber. It’s not just drivers who appear to be getting a good deal. When Taxify launched in London, it said its fares were up to 35% cheaper than Uber’s for passengers.
Bolt has over 25 million customers and over 500,000 drivers. Villig’s app edges out Uber in vast swathes of Europe and Africa to the extent that it’s the go-to taxi app in a number of cities including the Latvian capital of Riga.
“We compete with them [Uber] in every country and city we’re in, so we’ve always been accustomed to having quite fierce competition,” Villig said at the TechCrunch Disrupt conference in December 2018. “But what’s already clear from multiple mergers around the world, whether we look at Russia, China and now Southeast Asia, it’s clear that the local operating model is the one that’s going to win out over the long term.”
As of February 2019, Bolt was operating in 30 countries and 50 cities, but the company didn’t get off to the best start in London. It was forced to suspend its operations in the English capital just three days after launching there in September 2017.
Since then, Bolt has relaunched in London, but it has been primarily focused on emerging markets in Africa, Eastern Europe, and the Middle East.
The business, which has been backed by Chinese ride-hailing heavyweight DiDi Chuxing, is also pushing into the food delivery and electric scooter markets.
Now 25, Villig was on the Forbes Europe 30 under 30 list in 2018, and he’s one of the world’s youngest founders of a $1 billion “unicorn” company. He’s been helped by two cofounders, Oliver Leisalu and his brother Martin Villig.
Total funding: $177 million
Kabbee’s app allows travelers in London to see how much a ride would cost with various minicab firms, and it offers fixed prices. It’s essentially a price comparison app that helps you to find the cheapest fare for your journey, and it often serves up prices that are much lower than Uber’s.
In many ways, the Kabbee app doesn’t compete directly with Uber as it’s not great for on-demand transport.
However, it has proved to be particularly effective for passengers looking to get cheap rides from Central London to the city’s two biggest airports, Heathrow and Gatwick the airports, which are 16 and 27 miles from the city center, respectively.
At the time of writing, a ride from Central London to Heathrow via Kabbee could be secured for £32. Uber, in comparison, was showing prices of between £37 and £50. A black cab can cost up to £70.
Kabbee has partnered with dozens of cab fleets in London, which inevitably vary in quality.
Kabbee founder Justin Peters told Forbes: “Kabbee has survived against Uber by focusing on the airport market. Because Uber’s drivers are on a meter, when there’s traffic or when Uber is on surge price, their airport rides can be surprisingly expensive.
“Kabbee works with 50 different cab firms who compete not just with Uber but also with each other on price. That means we’re on average 28% cheaper than Uber and the passenger doesn’t need to run the meter gauntlet.”
Total funding: $9.4 million (via Crunchbase)
Founded in 2010, Wheely can be thought of as a luxury version of Uber, and its rides are certainly pricier than a standard UberX.
The Russian chauffeur app was built by two students—Anton Chirkunov and Pavel Bocharov—while they were studying at the Swiss University of St. Gallen. The company is now headquartered in London.
The Wheely app initially went live in Zurich, Vienna and Amsterdam but it ran into difficulties. Chirkunov, the CEO, reportedly said he underestimated the importance of advertising, instead believing that the customers would come on their own. He revealed some of the other lessons he learned from the early Wheely days in an article published by Inc Russia last December.
Today the Wheely app is targeted at wealthy people looking for discreet luxury on demand, and it counts Mercedes-Benz E-Class, S-Class, and V-Class vehicles in its fleet.
Wheely is available in seven cities in Russia, as well as in London. It launched in London in 2012 before pulling out after struggling to compete with Addison Lee. Six years later, it relaunched with plans to plow hundreds of thousands of pounds into attracting drivers away from Uber. Last April, Chirkunov said he was spending £20,000 a week on incentives for drivers to join the app.
Total funding: $28 million (via Crunchbase)
Ola was founded by Bhavish Aggarwal and Ankit Bhati in Mumbai, India, in 2010 and is valued at $6.2 billion.
Launched three years before Uber arrived in India, Ola allows people to hail a ride from private minicab firms as well as traditional licensed operators that use a meter. Today Ola is the number one taxi hailing app in India in terms of downloads, ahead of Uber in second and Meru Cabs in third. One of the main reasons that Ola has been successful in India, where not everyone holds a bank account, is that it allows passengers to pay in cash.
Ride-sharing companies in India have faced a backlash from consumers over high-profile sexual assaults by drivers on female passengers, surge pricing and frequently canceled trips.
While there have clearly been some issues, Ola has been backed by the likes of Japanese tech behemoth SoftBank, and it has expanded to Australia, New Zealand, and the U.K. with the help of billions of dollars of investment.
Ola’s move to expand ride-sharing to rickshaws, motorbikes and new models like hiring drivers by the hour has left Uber scrambling to compete.
Ola takes more than 150,000 bookings per day, according to VCcircle.com, and the vast majority of those are in India.
Total funding: $3.8 billion (via Crunchbase)
Addison Lee was once the darling of the U.K. private-hire taxi industry, but it’s been losing a considerable amount of market share to Uber and others over the last few years.
Despite losing business to some of the new kids on the block, it’s still regarded as the largest minicab firm in the U.K., thanks in part to a number of legacy deals it holds with businesses of all shapes and sizes across the country.
Founded by John Griffin way back in 1975, Addison Lee was acquired in 2013 by Carlyle Group, an American private equity business, for a reported $460 million (£353 million). Carlyle Group now wants to sell it for around £400 million ($520 million).
It used to be fairly lucrative, with profits of over £50 million ($65 million) and revenues in the hundreds of millions.
But today the company has a dwindling presence in the cities where it operates: Birmingham, Bristol, Cambridge, Cardiff, Edinburgh, Glasgow, Liverpool, London, Luton, and Manchester.
It reported losses this week of £39 million for 2018 as companies like Gett and Mytaxi have muscled in. Things seem to be getting worse as losses in 2017 came in at just £21 million.
In a bid to give it an edge, Addison Lee has desperately pushed the boundaries of what’s allowed, and in some respects, the company, with its outspoken founder, looked like an early version of Uber.
In 2012, it told its drivers to use the London bus lanes even though they’re not allowed, and it has been criticized on multiple occasions for underpaying its drivers, who it has classed as self-employed contractors for years.
Total funding: N/A
Founded in 2011 by a team of six entrepreneurs, Hailo beat Uber to launching in the British capital, but it arguably became the first casualty of Uber’s aggressive push into Europe as it no longer exists today.
Hailo expanded to over 15 cities—including New York City—before it was absorbed by German rival Mytaxi in late 2016. The financials of the deal were not disclosed.
Like Gett, Hailo allowed passengers to hail a ride from a registered taxi driver, including those that drive the iconic black cabs around London.
In May 2014, black cab drivers vandalized Hailo’s office after the company decided to open up its service to private hire vehicles, effectively mirroring Uber’s business model in London.
Total funding: $125.1 million (via Crunchbase)
Founded in 2009, Mytaxi claims to be Europe’s largest licensed taxi app, and it’s particularly strong in cities where Uber is banned or heavily regulated, such as Berl in and Barcelona.
It’s used by a wide spectrum of customers who want a safe, reliable service from a licensed taxi driver. In cities where Uber and some of the cheaper alternatives have been blocked, Mytaxi often cleans up. In Berlin, for example, there haven’t been many other options over the years.
Today, Mytaxi is involved in a huge new venture. Its majority shareholder, Daimler, the owner of the Mercedes-Benz brand, is entering into a new new ride-hailing venture with BMW—the two also-rans of Germany’s automotive industry are effectively teaming up to try and take on Uber.
Daimler announced a joint ride-hailing, parking and electric car charging business with BMW in February. In theory, this could mean that Europeans will be able to use the same company to hail a ride, hire a car, and more. Daimler and BMW have pledged to invest €1 billion ($1.1 billion) into the business.
As a result of the venture, Mytaxi will be rebranded to FREE NOW.
“Your current Mytaxi app will become the FREE NOW app later this year with a simple app update,” Mytaxi told customers. “We will let you know via email when the rebrand to FREE NOW is taking place.”
Total funding: $11 million (via Crunchbase)
Almost seven years after Uber arrived in London, the city’s black cab drivers finally responded with their very own nonprofit app.
It claims to be the only ‘ethical’ taxi app available in London. Unlike Uber and other ride-hailing services, Taxiapp doesn’t take any commission from drivers.
However, black cab drivers do pay a £20 ($26) a month subscription fee to appear on the service.
According to reviews, the app’s main issue is that not enough passengers use it and therefore not enough drivers use it. It’s a classic chicken-and-egg problem.
Total funding: N/A
Blacklane is a chauffeur service aimed at business travelers who want a more reliable and premium offering than they can get with Uber.
The Berlin-headquartered company—founded by Jens Wohltorf and Frank Steuer in 2011—is available in 300 cities worldwide, and it’s targeting the airport transfer market.
Blacklane’s service isn’t cheap. It has higher fees than Uber, but it’s popular with businesses as well as wealthy individuals. In many ways it’s a direct rival to Wheely.
The Blacklane platform can also be used to buy airport lounge passes and to get a VIP check-in service when you arrive at an airport.
Blacklane announced last month that it plans to IPO within three years.
Total funding: $82.5 million (via Crunchbase)