What’s in for Independent drivers as Uber’s problems could be just the start
What’s in for Independent drivers’ as Uber’s problems in London could be just the start, as investors might not stick around.
One giant uber market in Europe has stripped Uber of its license to operate - London, UK capital. The city's transport authority confirmed yesterday in a movement that not only ends a two-year struggle for legitimacy, but also opens new fears about the sustainability of the business model. While the company has said it will appeal the measure, it does not appear to be in a good position to revoke the ruling. After a series of scandals in 2017, Uber has tried to clean up its act, but taxi drivers lobby of black taxi drivers who have lost market due to war imposed by Uber must be very excited about the news. The flaws in London could easily be seen elsewhere. The largest market in Europe for Uber is in the UK capital –London. This is a big blow for the company. London is also one of the group's "fabulous" cities, along with New York, San Francisco, Los Angeles and Sau Paulo, which account for about a quarter of global revenues. In that sense, there is likely to be a clear and obvious impact on earnings growth, if the failure is confirmed, which seems likely. As Uber says: "Any inability to operate in London, as well as advertising related to such termination or non-renewal, would adversely affect our business, income and operating results." In London, the competition in the form of Bolt and Ola is ready and willing to intervene in the blink of an eye; Uber could be forgotten quite quickly once he is gone. Local competition is a problem where Uber extends its reach. In more general terms, recent decision reveals the scope and depth of the legal and regulatory issues facing Uber. The list of legal issues, historical or ongoing, is long and wide both in scope and geography.
Cities and local lawmakers have influence: These present outgoing in progress for the stock. While there have been problems with the corporate culture and background research of the drivers, in general, confrontations with regulators and policy makers belong to the business structure itself. Taxes, labor laws and consumer safety are the three legs of the stool of regulatory instability. Cities and local legislators have considerable influence if they wish to use it. Uber will continue to face high competition from its local rivals and a high degree of regulatory scrutiny that threatens to undermine the way it does business.
From Chicago to Los Angeles, from New York to San Francisco, there have been all kinds of legal obstacles. The city authorities have been alarmed by the rise of Uber and have followed a series of legal and regulatory ways to hinder the company. However, it has not been considered a total ban in other major cities, but how long will it take before some continue?
Already in a number of key markets, including Argentina, Germany, Italy, Japan, South Korea and Spain, the company's shared travel business model has been blocked, limited or suspended, or Uber has been forced to change its business model . While Uber investors have been able to accept some degree of regulatory excess, the example of London could point the way to cities that take an even tougher stance. Simply put, if Uber is excluded from a couple of larger cities, there is a risk that he will not be able to maintain the type of critical mass necessary to attract the capital needed to maintain a company of this scale that generates losses. Uber is still good at attracting investors, but a couple more cases like this and it may not be so.
Uber cash is a little mercy: At least, London's decision does one thing for Uber: it will help reduce the burning of cash, a strategy that the administration has begun to favor tentatively, as it struggles with greater scrutiny of investors after going public. . Uber has spent $ 7 billion in cash this year alone, as it pursues a growth model at all costs. London is a timely reminder that you can't count on growth to cover the cracks of a business model that is fundamentally flawed.
What is in for independent drivers working for Uber?
Start looking for sign up with other ride hailing company in your area. Since situation will create a terrible drag on Uber business, the company may be forced to increase its commission taken from driver’s fares to fill the loss as it will continue to stay in the business by not increasing its fares due to competition with Lyft and other ride hailing companies.