Vehicle Fleet Market Dynamics in the UK
When Uber first hit the headlines, many thought it could spell the end of large fleets in the minicab and taxi industry. Rather, it was going to disrupt the established model and create individual drivers working for Uber on a virtually freelance basis and being responsible for their own vehicles.
The predictions about disruption were certainly right with long-established firms and business practices coming under threat from this new entrant to the market. This has been a worldwide phenomenon everywhere from the US to Asia but it has not been without its issues for Uber.
In many places, there have been demonstrations by other drivers incensed by what they see as a threat to their livelihoods and there are also reports of attacks on drivers and their cars. Add to this the widely reported internal problems at Uber and it could be that the company is facing a rocky road ahead.
It could also be that the service is evolving in ways in which Uber themselves hadn’t anticipated. For example, a number of entrepreneurs have recently stepped in to run their own fleets of cars and employ the drivers but use Uber to provide the basic infrastructure for them, thus enjoying the best of both worlds. Naturally, this does mean that these business owners are responsible for other costs like maintenance and fleet insurance but the efficiencies that using Uber offers in terms of logistics go some way to offset this. Of course, the traditional minicab fleet does still exist but a number of these are also starting to copy elements of the Uber model in terms of creating bespoke apps for their customers.
It’s also clear that the arrival of Uber and other similar services has stimulated a re-evaluation of the minicab industry by local councils and even governments, and it is sure to become more tightly regulated over the coming years. For example, in London there is a proposal to make all licensed drivers take both spoken and written English language tests, a move which Uber is challenging in court claiming that it could prevent up to 33,000 of the capital’s estimated 110,000 drivers from continuing to work.
How this will affect fleets remains to be seen but it’s not all bad news for car makers who may fear that a large proportion of their business could soon disappear. That’s because no matter what happens in the taxi sector, there’s one area that will always have a high demand for fleet cars and that’s the car rental business.
There’s also been a lot of talk recently about driverless cars and this is another area in which car rental companies are actively involved in planning for the future. Thus, it is possible that before long there will be a whole new category of fleet on offer and not just in the car rental sector.