BCG Digital Ventures and Shell team up to battle Uber in London

29 January 2018 Authored by Consultancy.uk

Following the announcement that Uber will not its London license renewed by authorities, amid safety concerns, BCG Digital Ventures has announced its own bid to disrupt the city’s transport scene. Fare Pilot will see the BCG subsidiary join forces with energy giants Shell, as the pair aim to provide Britain’s capital with an innovative new travel option.

Uber, the application designed to disrupt the taxi industry, has experienced explosive growth since its inception in 2009. By 2015, the organisation was worth over $50 billion, expanding its operations rapidly into 60 global territories, and 330 cities. Unfortunately for the ride hailing app, however, such a level of success is always accompanied by an enhanced level of public scrutiny. In recent years, this has seen the group repeatedly subjected to high-profile investigations into its environmental impact, its effects on traffic, its employment practices and its health and safety standards.

Now, compounding a harsh couple of months for the ‘unicorn’, in which it forfeited its title as the world’s most valuable start-up to Didi Chuxing, Uber also found itself out of a license in one of its largest European markets. The group’s licence to trade in London will not be renewed by the city’s transport authorities, who said the renewal was denied due to safety concerns.BCG Digital Ventures and Shell team up to battle Uber in LondonUber lost its licence in September, when Transport for London declared that the company was not “fit and proper” to operate in the capital, and accused it of a series of failures over passenger safety. Uber hopes to win back TfL's approval through a series of talks, but in the meantime, a legal appeal against the ban allows it to continue operating while the process occurs. According to London Mayor Sadiq Khan, the appeal process could stretch out for “a number of years."

While the current loss of licence seems not to have impaired Uber’s potential for business in the immediate future, however, it has opened the market up for competitors capable of differentiating themselves from the allegedly unsafe app. Fare Pilot, a new machine learning venture, backed by Shell and BCG Digital Ventures (BCG DV), aims to do exactly that. The duo are scaling a Data Platform and Mobile application for professional hire drivers will leverage new techniques in Artificial Technology to anticipate customer demand, utilising live hotspot data to get more fares, as well as saving drivers money. Fare Pilot already boasts a fleet of active users in the 10s of thousands, having ventured into London, as well as launching in Los Angeles and New York, in preparation for a global rollout.

Licence to drive

Shell has already applied for a licence to operate private hire taxis in London through one of its subsidiaries, marking the first move by an oil major to test out an Uber-style technology in Europe’s biggest car-booking market. While the group remains the UK’s most valuable brand, Shell have been working constantly to diversify their offering amid flagging demand for fossil fuels. In late 2017, this saw the corporation make a grand entrance into the electrical vehicles market – as Britain’s automotive industry prepares for life after combustion engines in 2040.

The app, which tells drivers where there is high demand for taxis, filed an application for a licence with London’s transport authority in July. Sources close to Shell have stated the group has no intention of “taking on Uber”, and that the licence was needed for regulatory reasons to allow small-scale pilots, many might say the fact FarePilot’s arrival into London coincides with Uber’s current troubles suggests otherwise. The technology, once it is licenced, will be tested as a business-to-business taxi service, rather than one marketed to consumers. However, Shell’s application for a cab hire licence would leave room for it to go even further by providing a ride-hailing service itself.

According to James Farrar, chair of the private hire driver’s branch of the Independent Workers Union of Great Britain, said if the app did take this step, it would have to introduce safety measures to differentiate itself from Uber. Farrar added that employment protections should also be offered, stating, “With a $250 billion oil industry giant now entering the gig economy the urgent need for worker protections in the minicab industry could not be clearer.”

The innovative project, which was first announced the end of 2016, is majority-owned by Shell, which has a 74% stake, while the remainder is owned by the Boston Consulting Group. BCG DV have worked on the design of the platform. The digital innovation, incubation and investment wing of BCG recently played a similar role in the production of the Hey Car used-car sales app on behalf of German automotive player Volkwagen.

News