From Uber to Kapten, a booming competition in London

Uber competition

A bit more than one year ago, Uber was the only major ride-sharing company to operate in London. A situation of monopoly that lasted for six years. Things have changed when ViaVan started in May 2018. Now, there are four main RideShare companies in the capital. Let’s assess the situation for each of them.

Uber London is still dominating

Uber is still the most used app by riders and drivers in London. It has the biggest number of drivers with about 40 000 of them using the American platform. The reliability of the app is still very strong thanks to this number of drivers.

It also covers an area that none of its competitors is covering. Everywhere in the M25 and way further outside of it. All airports are also covered by Uber apart from Southend airport.

The app in itself looks the most achieved. It crashes rarely, is smooth and the features in it are still exclusive to the app. Destination feature, detailed stats and both way rating system are some examples.

Following the Congestion Charge episodes and pollution regulations, Uber is now slightly more expensive than its competitors. Indeed, a £1 fee is added to any trip that hits the Congestion Charge zone. Also, in order to promote cleaner vehicles, a 0.15 per mile fee is added for any trip taken inside the M25 orbital. Uber calls it “Cleaner Air Fee”.

But to penetrate the market and compet with Uber, other apps had to put millions on the table to attract both riders and drivers.

ViaVan and its car pooling model

The positioning of ViaVan is clear. Get the cheapest ride in London by sharing drivers’ cars with others. Customers are charged a fixed price that depends on their destination. That way, it attracted customers that were not always happy with Uber’s meter but are okay to spend £3 or £5 for a ride regardless of the time spent in the car.

It seems to have a good customer base now. The waiting time for a ride is much lower than at its beginning for both riders and drivers. However, it seems to prioritise drivers that work on a fixed rate per hour. These are called Blue mode drivers. And that is the heart of ViaVan business model. In order to make some profit, rides are first assigned to blue mode drivers. The total turnover of these rides per hour will be higher than the gross pay of these drivers per hour. Hence the room for profit.

The other type of drivers, flex mode drivers, are working following the Uber model. They earn according to the distance and time spent on the ride as in a meter, £1.25 per mile and £0.15 per minute. But riders are still charged fixed prices for these rides. A £3 cost for a zone 1 trip will give drivers £5 to £8. ViaVan makes no money with that and the difference is subsidised by the company. And that is why rides are not assigned firstly to these drivers. But Flex mode drivers are still useful to ensure the reliability of the platform.

There are still things that ViaVan can improve with the app. Indeed, it tends to be slow at times and not as smooth as the Uber app. Too many times, the app loses connectivity with the driver’s device. And it takes too much time for the driver to be notified of it. If there is somewhere to improve, it is clearly with the app.

Miwhip is still half launched

After the annoucement of its launch, many drivers were looking forward to working with Miwhip. Its managers clearly stated that it cared for its drivers and that they would be well treated.

However, a lot of disapointment followed its launch. The launch was several times delayed but also failed twice due to technical issues. We are still at a stage where we do not know if the app works correctly and if rides are always assigned. The app seems still under review and not working fully.

Miwhip has not clearly communicated either about its plans and current situation following these misadventures. We can see that its super cars are ready. But what about its ride-sharing business model in partnership with Private Hire drivers?

Kapten set the tone as one of the most serious Uber competitors

Things have gone very quickly with Kapten. It annouced in February the will to launch in London. And three months later, an immediate launch followed the grant of a TfL licence. On the 10th May, a test launch started. Six days later, the app launched officially.

Uber took the first blow of the launch with the anti Uber ad campaign. Drivers rushed to sign up attracted by the bonuses, 0% commission fee and the Congestion Charge paid in 2019. Customers were offered a 50% discount on all rides with a fixed fare. Everything is gathered to penetrate the market and start building a reliable platform with a serious customer base. Kapten really shows that it wants to be Uber’s main competitor. Like they are in France.

The app in itself is reliable when ordering or accepting a ride. It does not crashes and looks well finished. However, it lacks features such as destination, rider’s rating system and detailed stats. Also, the mapping is not exclusive to the app as they are using Google map.

It will be very interesting to see how the app will be after the end of the promotions for both riders and drivers. Then only, we will have an idea about how seriously can Kapten compet with Uber.

Ola is next

The next big competitor to enter the London market should be the Indian firm, Ola. The app is already available in many cities in UK such as Birmingham, Coventry and Cardiff. And it should not take too long for the app to arrive in London. It launched recently in the nearby city of Reading.

With big financial and investment means, Ola should shake the ride-sharing market in London like Kapten is doing at the moment.

Be the first to comment

Leave a Reply

Your email address will not be published.


*