Tuesday, April 21, 2015

Google Uber partnership a serious threat to local taxi businesses

A week ago I arrived by Thalys in Paris and used Google Maps to find out how to get to my hotel by public transport. To my surprise, I saw Uber mentioned at the end of the list with the information that I can expect an Uber ride in 13 minutes, with the expected costs of 13-18 Euro. My travel time would be 36 minutes, 20 minutes less than by metro.

I still decided to take a metro, for just 1,8 Euro, which is relatively cheap in comparison with London’s metro.

Last Sunday I arrived at Heathrow Airport and used Google Maps to figure out how to get to my hotel at the airport by public transportation. Again at the end of the list Google Maps informs you that Uber can take you to the hotel for just 5 pounds arriving in four minutes. On my way back Google Maps informed me that Uber would pick me up in two minutes and I could get to the airport in 12 minutes for just 8 pounds. 

This is extremely appealing as the official taxi price at the hotel is 18 pounds and Uber can pick you up without practically any waiting time! Providing Uber information in Google Maps  requires the integration between Google Maps and Uber platforms.

How can local taxis compete with Uber in these circumstances?

Do local taxi companies have a chance to be listed on Google Maps even if they manage to digitise their business? Even if they are listed, can they offer competitive prices?

I am afraid that the answer to both questions is NO. It means that there is no bright future for local taxi companies facing joint competition from Google and Uber. This case is very interesting in the context of the EU Google antitrust case as it looks like in the digital platform era  The Winner Take It All