Like most people, First Round does like a bargain, and so is following excitedly the race to the bottom that is going on in the taxi business. In many of the world’s leading cities, operators are trying to push each other off the roads, and fares are in freefall.
In the UK, according to researchers IBIS, transporting people via roads is a £9 billion industry which has “no companies with a dominant market share”. The contender most likely to change this is of course Uber, the turbo-charged start-up whose blue-chip backers include Kleiner Perkins and TPG. First Round can’t remember the last time it caught a cheaper ride home from its Central London offices than with the self-styled ‘disruptors’ from California.
But now the competition has shifted gear. Until the middle of February, Addison Lee, the private car hire business owned by the Carlyle Group, will knock £10 off any trip to anywhere in the capital, regardless of how far you want to travel.
Whether this will be enough for Addison to overtake Uber so that Carlyle can at last cash in – the firm has been keen to do so for a while – is a moot point. The war over fares has certainly given Londoners something to cheer about, but by the same token it’s hard not to worry about the city’s 25,000 Black Cab drivers, not to mention the army of minicabs. Because of all the upheaval, their livelihoods are under threat, and things are bound to get worse if Lyft, Uber’s San Francisco arch enemy (and backed, of course, by private equity), also decides to enter the market. At this rate, a pile-up seems inevitable.