Uber shmuber: How London’s ‘other’ driver brands are taking on the £3bn market
The explosion of taxi apps in recent years meant the commoditisation of driver services was inevitable. Realising they need to differentiate further to combat Uber’s dominance, the likes of Hailo and Addison Lee are making brand-building a priority.
Uber’s ubiquity in London is undeniable, and holds real power. At only four years old, the app makes broadsheet headlines, breeds countless think pieces and has the power to ground the city to a halt by way of black cab strikes.
But it’s not the only player on the scene. A quick search on app stores throw up pages of private transport apps, which - importantly - are not lying dormant and undownloaded. Uber has not yet won the war - but the battle is now being fought along lines of marketing and product experience.
Addison Lee's chief commercial officer, Peter Boucher, believes the affectionately-known Addy Lee is propositioned too far away from Uber for any rivalry to exist. The brand operates an intergrated system wherein it owns, insures and rents its own cars – unlike Uber’s franchise-style operation – and has built itself upon large business accounts, as well as consumer. The challenge for the brand then, is landing that point of difference in London and beyond.
“Uber is definitely still going to exist, and we need to compete with them correctly,” says Boucher. “I don’t think an out-and-out fight is intelligent either for them or for us. It’s a very big market - £3bn in London. There’s still a lot to play for.”
Boucher’s company is hardly ‘playing’ when it comes to tech investment. A total of £12m has been ploughed back into development, with Addison Lee’s sights set on improving the in-car experience with wifi and phone charges, improving its digital interfaces and expanding internationally with various partnerships.
Hailo, which connects black cabs to those in need of one, is taking a similar route, according to chief marketing officer Gary Bramall: “I would say about 50-55 per cent of our entire workforce is in product engineering or development operations.
"We have dedicated data scientists looking at our analytics and data to understand the opportunities available – for instance if we know it’s going to rain at the end of the day we’ll send push notifications encouraging people to pre-book because we know there will be a surge in demand.”
The conversion rates on this real-time, mobile marketing have been as high as 45 per cent for Hailo. The next step for the brand is further growth in Europe (it currently operates in Ireland, Madrid and Barcelona as well as London, Liverpool and Leeds), and Bramall is adamant no competition from Uber is going to stop that.
“When Ryanair came into the market, British Airways didn’t disappear, and when Aldi came into the market, Waitrose didn’t disappear,” he explains. “Uber is catering to a different clientele.
"The black cab and minicab market have been in play in London for quite some time, and from Uber’s perspective I think it’s been more of a consolidation of the minicab market, but the two have been offering different services to different people for the last 30 years."
So how does Kabbee, the app linking minicab drivers with travellers, deal with Uber’s prevalence? Realistically, says its head of marketing Laura Przybek. “It’s massive – they’ve got billions and we’ve got millions in investment. But there’s space in the market for more than one person.”
Kabbee uses its marketing to clearly highlight what it has and what Uber doesn’t – pre-bookable cars, fixed fares and a variety of payment methods. “It’s just like every other business – you want to differentiate yourself from the whole market,” says Przybek. “Messaging is the most important thing, that’s what you’ve got to fight on. The first thing someone will ask is: ‘Why should I use Kabbee?’ If you can tell them that through your marketing, you can really make an impact.”
The minicab app is also investing heavily in tech and has a particular interest in working with smaller madtech agencies (“We’re happy to trial and learn something new every month,” says Przybek) and, like Addison Lee and Hailo, has plans to expand geographically. In fact, the only brand The Drum spoke to that has no immediate plans to move into other locations is Gett.
Like Hailo, Gett deals in the business of black cabs but offers users a fixed fare in London. Kim Monney, its UK head of marketing, explains: “Being in a black cab and watching the metre rise can be a very stressful experience, so having that price set before you jump in makes everything far more enjoyable.”
The brand has expanded into other UK cities over the past 12 months, and eventually plans to roll out the fixed fare strategy to these places “when the time is right,” according to Monney. However, in the capital, Gett has expanded horizontally – using its location tech to double up as a courier service. A tie-in with champagne label Veuve Clicquot also resulted in Gett Cliquot, which allows central Londoners in dire need of chilled bubbles a 10-minute delivery, complete with flutes.
“One of our core USPs is the speed in which we can get there. And our app is based on GPS, so it’s quite easy for us to expand the service.”
As for the future, Addison Lee, Hailo, Kabbee and Gett are all positive that the London market is big enough for every app to have a slice. There is also a general consensus that the market has probably reached saturation, with the brands still standing following the Uber invasion likely to stay the course. As Przybek puts it: “If you were entering the space now it would be very difficult. You’d need a unique idea that spreads virally or a lot of money to buy customers. And if you’ve not got the learnings, you’ll just not succeed.”
And for Boucher, the next frontier is beyond the M25. “I think the channel is to switch all people to booking through an app – outside of capital cities that hasn’t happened yet,” he says. “There’s still more innovation to go.”