Uber Buys Autocab; A Trojan Horse?
• It was announced yesterday that Uber has agreed to acquire Autocab, in a deal that will allow riders to connect to local drivers in areas where Uber doesn’t operate.
• The deal will ultimately expand Uber’s reach in the UK to as many as about 170 locations from 40, and allow the taxi and private car-hire companies that use Autocab’s software to expand and “offer more earnings opportunities to local drivers,” such as deliveries, the companies said in a statement on Thursday.
• Customers in markets such as Oxford or Exeter will be able to use their Uber app to get a ride from a local car-hire company, though the integration won’t be rolled out in markets where Uber is already in use, such as London, the companies said.
• Autocab says it operates in 30 countries, and Uber may eventually expand the program. Uber said it will also help Autocab expand further.
• “Every month thousands of people open the Uber app in places the company doesn’t operate to try to get a trip,” the company said in the statement, though Uber hasn’t announced a new location in the UK since 2016.
• No acquisition price has been disclosed and Uber declined to comment on the terms of the deal.
• This is great news for Uber and Autocab. It allows Uber to expand its reach in the lucrative UK market without having to buy incumbent PHV firms, and it allows Autocab to cash out.
• We estimate that Autocab controls c. 25% of all the cars of the top 100 PHV firms in the UK, consequently the proposed deal is likely to be scrutinised by the Competition & Markets authority.
• What we don’t understand is why current subscribers (PHV operators) of the Autocab in the UK will stay with the service, as it’s now owned by their biggest and most dangerous competitor whose goal is to take control of the market and put the operators out of business, or have we missed something?
• We also think that deal could present a significant opportunity to the likes of iCabbi to win over Autocab’s existing clients.
• Is the deal just a Trojan Horse?
• If we are way off in our logic and or have missed something please do not hesitate to let us know…
Uber Reports Q2 2020 Earnings
• Last night Uber reported its quarterly results for Q2 2020 with much of the focus on the impact the Covid-19 pandemic has had on the business so far.
• These are the most important numbers from the report compared to what the market was expecting for the quarter.
- Gross bookings: $10.2 bn versus $10.4 bn expected.
- Rides gross bookings: $3.05 bn versus $3.96 bn expected.
- Eats gross bookings: $6.96 versus $6.23 bn expected.
- Losses per share: $1.02 versus $0.84 expected.
• Uber’s quarter was a tale of two businesses. The ride-sharing side saw an incredible collapse of 73% compared to Q2 2019 results, as the full shock of the pandemic became clear for the company.
• But the delivery Eats service was up a massive 113%.
• For the quarter the company lost $1.8bn.
• Shares of Uber were down circa 3% following its earnings report (see here for more details).
• As expected the results were weak and the quarter was a period of change for the company.
• The bookings mix-shift to food delivery did help Uber staunch ride-hailing losses, but not completely.
Govt. Reviewing Covid Fighting Options Including London Lockdown
• The Govt. is looking at all options for tackling flare-ups of Covid-19, and will use regional data to target its response, a Govt official said, following newspaper reports last weekend that a London wide lockdown is being considered if cases spike in the capital.
• The reports came two days the prime minister after postponed the planned easing of lockdown measures amid a surge in infections.
• Boris Johnson ditched proposals to reopen leisure facilities such as bowling alleys, and cancelled trials aimed at getting sports fans back into stadiums.
• Possible measures include locking down the capital if infection rates spike and tightening quarantine rules on those flying into the UK.
• There could be travel curbs in and out of the M25 and a ban on overnight stays if there’s a surge in cases, according to newspaper reports over the weekend.
So, What’s the Current Growth Rate of the Virus?
• The Covid-19 R value in the North & South West could be as high as 1.1, according to the latest government data, released late last Friday afternoon.
• In London, the R rate was stable between 08-1.0.
• Whilst the R value across England was stable too at 0.8-1.0.
• (Please remember, a “R Value” above 1.0 is bad).
• Meanwhile the UK’s new daily infections and death curve continues to show a flattened trend.
• It's concerning that the R Value is estimated to be above 1 in the North & South West.
• However, we take some comfort that any further lockdowns will only be localised.
“The fool doth think he is wise, but the wise man knows himself to be a fool.”
― William Shakespeare, As You Like It