Five months after ride hailing taxi firm Uber first announced it would acquire UK-based rival Autocab, it has emerged the deal is being investigated by the UK’s competition watchdog.
The Competition and Markets Authority’s (CMA) announced it would conduct an inquiry into the deal over concerns it could lessen “competition within any market or markets in the United Kingdom for goods or services.”
Uber had announced in August 2020 that it would acquire Autocab for an undisclosed amount, in a move that will greatly expand the availability of its taxis in British towns and cities.
The acquisition of the taxi firm came amid overall consolidation in the taxi sector, caused by Coronavirus lockdown.
Uber did promise five months ago that Autocab would remain independent with its own board focussed exclusively on providing technology to the taxi and private hire industry around the world.
Autocab essentially operates a ride-booking cloud-based app called iGo, which is used by independent minicab companies throughout the UK.
The iGo app allows private hire and taxi firms to offer online bookings and organise dispatches, and it is reportedly used by half of the private hire and taxi market in the UK.
Uber footprint in the UK is still somewhat limited (only available in roughly 40 UK towns and cities), but the Autocab deal will give Uber customers access to an additional 75,000 vehicles in areas where Uber does not currently operate.
That meant that once the deal is complete, the Uber ride hailing app should be available in approximately 170 towns and cities in the UK.
And when there is no Uber car in the area, customers can seamlessly book a private hire car instead.
Silicon Valley-based Uber told Reuters it is cooperating with the CMA inquiry.
The CMA said it had a deadline of 26 March to decide whether to refer the deal for an in-depth investigation. It has invited comments from interested parties to aid its decision.
There is little doubt the Coronavirus pandemic has hit the taxi industry hard.
In April 2020 for example, as the full force of the pandemic engulfed the world, Uber revealed that journeys booked through its app had fallen 80 percent, which it blamed solely on Covid-19
Uber also announced it would axe more than a third of its workforce (6,700 jobs), but that didn’t include drivers as they are considered ‘independent contractors.’
But in May 2020 Uber noted that demand was slowly recovering, but that was before second and third lockdowns.