Why aren’t UK cities swarming with scooter taxis?

Crossing a road in other parts of the world is not like crossing a road in the UK.

In the UK, you’d only step out into moving traffic if you had a death wish. In most of Asia, it’s the norm.

In fact, if you don’t step out into moving traffic, other pedestrians will become irate, at the fact you’re holding them up.

What’s more, drivers don’t get mad at you for stepping out in front of them, they simply move round you.

It’s very hard to get your head around at first. But after a few days you just get used to it.

The driving in these cities is much less stop-start than in the UK.

In the UK cars, scooters and even cyclists race off the line as fast as they can, until they reach the speed limit. Then they stay at that speed, for as long as they possibly can, before they are forced to slow down at a traffic light or junction.

In Asia, it all just flows. Drivers somehow manage to weave round any problem. I suppose it helps that they rarely go over 20mph, or in most cases over 10mph.

At those low speeds, you can react to anything coming up and maneuverer around it.

But as a Westerner, it looks and feels like utter chaos.

Scooters are ubiquitous. It feels like there are more scooters in these cities than pedestrians, all weaving in and out, all the time.

The uberisation of scooter taxis

Most of these scooters, you soon realise, are in fact taxis.

These scooter taxis are absolutely everywhere. They are incredibly cheap to hire, and they get you places fast.

When I first visited Asia five years ago. I spend around three weeks in China, in Guangzhou, and a week in Hong Kong (they’re pretty close by train).

I was out there visiting friends who’d lived out there for a number of years and were fluent in Mandarin.

To get around we would usually flag down motorbike taxis, and my friends would tell the driver where we wanted to go.

At that time very, very few people in Guangzhou spoke English. So if I wasn’t with one of my friends, getting around was hard.

This year I went out to Asia again. I spent a couple of weeks in Vietnam.

Same situation with the roads. Same river-like flow of traffic with almost zero stop-start. Same overwhelming number of scooter taxis.

Only this time, the scooter taxis were instantly recognisable. All the drivers wore green tops and green helmets.

And I could easily hire them and let them know where I was going without either me or the driver saying a word.

They’d been uberised… but not by Uber. By a company called Grab.

Grab beat Uber at its own game

It turns out that Grab is a pretty big deal in Asia.

So big, in fact, that last March it acquired Uber’s Southeast Asian operation. And in return, Uber got a 27.5% stake in Grab.

According to Forbes, Grab was valued at $10 billion in its most recent funding round, and it expects to double its revenues by the end of the year.

As you may expect, Grab is essentially exactly the same as Uber. The main difference, apart from its green colour scheme, is you can choose to get a scooter instead of a car.

Why would you choose to do this? Well, aside from the fact you’ll get where you’re going much faster, it’s also a lot cheaper.

While I was out in Vietnam, I visited a fair few places. Places that just a couple of years ago, I would have had to hire a scooter to see.

But over the course of the entire trip, I only hired a scooter for a few hours. The rest of the time, I simply used Grab. And so did everyone I was travelling with, and almost every other tourist we met out there.

The uberisation of scooter taxis has essentially changed the way tourists get around in Asia. And, as you know tourism is a major industry.

Why aren’t UK cities swarming with scooter taxis?

Since getting back to London, and Uber, I’d kind of forgotten about Grab. Until today.

This lunchtime I was walking around central London, as I usually do – in a daze, listening to an audiobook – when I saw an Uber Eats scooter.

The scooter caught my eye because it was driving up a road that’s usually closed to traffic. So I wasn’t expecting to see it.

It reminded me of the way the scooter taxis drove in Vietnam. And that’s when it hit me. Why are there no scooter taxis in London?

Surely Uber could make a killing if it let its Uber Eats scooter drivers also take passengers.

It turns out that back in 2005, motorbike taxis were banned in London. Here’s an excerpt from an archived Guardian article at the time:

They are billed as a way to get from “A to B without the Q”. But motorcycle taxis, beloved of high-flying executives and time-pressed celebrities, are to be banned in London because Ken Livingstone believes they are dangerous.

Renowned for their ability to weave in and out of traffic, such taxis appeared in the capital a decade ago and now have a cult following – users have included the architect Richard Rogers, the broadcasters Jon Snow and Trevor Phillips, and the chairman of HSBC, Sir John Bond.

An initiative by the capital’s mayor includes a little-noticed clause which says a private hire vehicle should have “four wheels”; this will outlaw motorcycle taxis at the end of March.

Since then, regulations seem to have relaxed a bit. Motorbike taxis are no longer outright banned, but getting a licence for one is hard.

In 2012 the Department for Transport released a guidance note about motorbike taxis, stating: “applicants should have at least five years’ experience of riding motorcycles.” And that riders should, “as a minimum, offer passengers gloves, a jacket and trousers.”

And it also requires motorbike taxi drivers to have advanced driving certificates.

As most Uber Eats scooter drivers still have L plates, that five-year minimum motorbiking experience and advanced driving certificates rules out most of them.

There are a number of firms that offer motorbike taxis. But these are high-end services aimed at executives and celebrities.

But it does beg the question, where are the scooter taxi services for ordinary people? It seems like it could be a huge business opportunity for someone like Uber. But as of now, it doesn’t exist.

Perhaps, the demand isn’t there. Perhaps the UK is too rainy. But surely as our major cities get busier and busier, people will want taxis designed to navigate these environments.

The way our transport system will evolve is something Nick O’Connor covered in detail in his tech investment book, The Exponentialist. If you haven’t got your copy yet, you can claim one here.

One of the big ideas Nick covers in the book is that of self-driving cars, and how that will change the way we think of vehicle ownership.

And this ties in with Elon Musk’s recent announcement about being able to rent out your Tesla as a self-driving taxi. This will change your car from a depreciating asset into an income-producing one.

In fact, going on Musk’s numbers, it could make you as much as £23,251 per year.

Until next time,

Harry Hamburg
Editor, Exponential Investor

PS would you ever take a trip on a scooter taxi? Let me know: harry@southbankresearch.com.

Category: Technology

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