Uber Wins Legal Battle To Continue Operating In London

Haim Ratzabi
Oct 16, 2022
4 min read

Uber has won (9/2020) a legal battle that will allow the ride-hailing platform to continue its operations in London after a judge overturned a 2019 decision by the city’s transport regulator to revoke Uber’s operating license over safety issues. Uber has been granted an 18-month license to operate in London.

In 2019, Transport for London (TfL) refused to renew Uber’s operating license, after the regulator found that more than 14,000 trips in the city were taken with drivers who had faked their identity on the platform’s app.

As there are several ride-hailing apps in the UK such as: @Bolt, @Kapten, @ola, @addison lee, @gett, @wystle and @Uber that compete on the ride-hailing & taxi market, it will be interesting to see what are the implication of such decision on the valuation of a potential (ride-hailing apps) IPO will be.

According to CNBC, Uber has in London total number of 3.5 million users, making it the company’s largest market in Europe. Uber also has over 45,000 drivers in the U.K. capital.

So, what is Uber 's Business Model and How Does Uber Make Money ?

Author Name: Jenny Winget

How Uber Makes Money?

Uber and other travel companies earn money by charging customers for travel, such as a taxi or other rental transportation company.
Uber collaborates with the owners and drivers of vehicles and together establish a minimum charge in which the partners can operate. It provides brokers through online reservations from a single application and charges them a certain amount of commissions.
The commission charged by the company ranges between 20% and 25% of the total amount charged by the client.

How Uber makes Money: Revenue generating Methods

Uber makes money in a lot of ways, the following are the simple techniques Uber use to make money:

1. Listing fees (Mainly for the driver to work with them).

2. Get the Uber Driver cars on loan.

3. Uber Eats (food delivery through Uber driver)

4. Uber Trucking.

5. Journey cancellation Fees.

6. Tour Commissions.

7. Keeping money received by the customer in bank deposits for a period of 7- 10 days.

Uber has provided a multitude of taxi models for its taxi services. In addition, it’s pricing algorithm used in the variation of taxi fares, that is, when demand increases, prices per mile, increase automatically, and has led to a large increase in your income.

Four Factors That Impact Income of Uber:

1. Surge Pricing

Almost all shared-ride services have adopted increased prices. However, it is an excellent case for consumers to remember that yellow taxis still work on rainy Saturday nights. Drivers who make an effort to work during peak hours will earn more than their colleagues, possibly many times.

2. Location

The drivers of the city earn much more than their rural and suburban companions. Also, the city recently passed a law that establishes a minimum wage for ride-sharing workers. But it’s also about the density of customers and what economists call “underutilization.” Basically a technical way of saying time spent with the empty car.

3. Hours Worked

Calculating the monthly or annual earnings for a driver worker is almost impossible given the independent flexibility of this job. Furthermore, drivers can work hours that differ from day to day, person to person, and week to week.

4. Expenses

The other main factor for rideshare income is expenses.

Calculating a driver’s actual income means accounting for costs such as:

Gasoline
Parking
Car maintenance and repair
Extras such as snacks, drinks or entertainment
Tolls
Car payments
Auto insurance

Drivers also have personal expenditures that employees don’t, such as:

Self-Employment Tax
Health insurance
Retirement contributions
Personal liability insurance

Other Uber apps growing continuously:

1. Uber Eats

Uber Eats is an on-demand food delivery app launched in 2014. User signs up for an account, open the app and a list of local restaurants that have partnered with Uber Eats appears. From there, users can see the menus, select what they want and place the order for any item that catches their attention. The designated delivery man then collects the food from the restaurant and delivers it to him.

2. Uber Freight

Uber Freight platform has simplified the task of owner operator truck driver and shipping carriers. Uber has created a Freight platform. Uber Freight has revolutionized the way the trucking industry does business. It allows drivers and carriers to deal with shippers with the help of a convenient mobile app. Uber Freight has transparent pricing and easy-to-use tracking and logistics tools. Also, it is really ahead of the curve when it comes to cargo brokerage.

3. Uber for Business

This is mainly used to avoid inefficient, time-consuming expenses while traveling. If any organization has an Uber for Business account, it can be used for it is an Uber driver app to make trips and have them invoiced directly to the company.

Furthermore, User’s travel experience is the same for both, personal and Uber for Business profiles: users can switch between them for personal and business trips. However, the organization will not see any information about trips made with the user’s personal profile, only the trips that users make with their Uber for Business account.

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