This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.
The Uber headquarters in Spain has plans for the country that has become a preference for mobility, regulations, taxis, and competition.
Never in my life have I taken a transport vehicle with driver (VTC), I confess. I like to drive my own car, which is already a part of my anatomy and, if anything, very occasionally, if there is no choice, I get into a taxi or use public transport. I am an endangered species, an urban anti-system that should spend a season in a re-education camp before disappearing definitively, or change as soon as possible and start moving to the rhythm of the times. Maybe that's why I have the feeling that I have changed my job and today I look more like a VTC driver than an interviewer. In my imposing and figurative black car, I go to the Uber headquarters in Spain and take the trip nowhere to know the plans of this business giant that has focused on our country and which, at the outset, I find it difficult to define: Transport company? Of services? Technological?
We start ... "I like to think of Uber more as a facilitator that brings together different people and companies to create opportunities in different sectors. The idea of Uber, a company with people who want to change the world, is the of being a multimodal platform that, although it started with cars, is now getting many other forms and methods of transport to integrate mobility alternatives in cities," explains Giovanna d'Esposito, a native of Sorrento, in southern Italy, which for the last two months has been the new general director of Uber for the European Southwest, with command in place in Italy, Portugal, Croatia and also in Spain, where she has the headquarters of this corporate region. Almost 100 people work in the offices of Madrid, which is a Babel mini tower where 12 different nationalities live together.
Mechanical engineer and MBA from Insead, Giovanna d'Esposito has just taken the witness of Carles Lloret, who has moved from Madrid to Amsterdam to lead the team of carrier operations at Uber Freight, one of the group's most ambitious business lines, which has created "a new platform that makes Uber technology available to carriers and customers, transforming a process that formerly required hours of work and dozens of calls, in a single click," he says on board the car he imagined, in the one I have plugged in the hands-free, Lloret himself from Holland, where the group is based in Europe.
The main objective of Uber today is to take full advantage of its technology platform and increase revenue while reducing its dependence on vehicles with drivers, its main source of income. Its freight transport division, for example, puts professionals in the road transport sector, truck drivers with delivery companies, whether logistics platforms or consumer companies.
Freight is one of Uber's new businesses that both captivate Wall Street financial analysts, especially after its IPO only two months ago, to which they trust much of their stock market appreciation in the coming years. Uber Eats, your home delivery company, is also in that stock market interest group; Uber Jump, the division of electric bicycles and scooters; Uber Elevate, its future flying taxi and, above all, the autonomous car, to which it is devoting great efforts and with which much of its future profitability is played. A project that still has no commercialization date.
We dedicate many resources to innovation and for years we are investing a lot of money in the autonomous car. We have just bought a company specialized in artificial intelligence that is dedicated to collecting the data of the sensors of the infrastructures to introduce them in the software of the car so that it can make the appropriate decisions. We are very proud to be able to say that a Spanish engineer, Raquel Urtasun, is one of those responsible, "says D'Esposito. This scientific expert in computer science leads the group's advanced technology research center, which also participates in another Uber's key project that does seem closer: the flying taxi. "In 2023, Uber Elevate, which is called the air taxi, will start operating in the North American cities of Los Angeles and Dallas," says D'Esposito, which has surprised "pleasantly the great predisposition in Spain to innovation and entrepreneurship."
Returning to the earth, but still looking sideways at the sky, this giant accustomed to uniting the worlds on and offline collaborates through Uber Eats with more than 220,000 restaurants in 500 cities in 36 countries around the world, and plans to 2021 that your home delivery service can be carried out with drones. "It is a division that grows at high speed and in all directions. We get the restaurants to generate new income thanks to us, and there are even those that thanks to our service can move to less expensive areas, save a lot with the rental of the premises and focus on the food delivery service," explains D'Esposito. The figures change from one day to another, as does Jump, which is spreading in large cities as a complement to cars. So far, 18 cities already have their electric bikes and 13 scooters. "It is a business in which Spain has been a pioneer in Europe, with cities like Malaga and Madrid among the first in the continent to launch this micro-mobility service together with Paris," says D'Esposito, expert in strategic consulting and digital transformation, which he sees a fundamental difference in Uber compared to other multinationals in which he has worked after 25 years of experience in different European capitals: "The good thing about working here is that Uber has invented a new business model, a new industry that did not exist before That makes this job exciting because, when you have to make a decision, there is never a clear path. Everything is new and talent flows from the bottom up."
AN EXPRESS GIANT
Uber has turned 10 years old and billed 11.3 billion dollars in 2018, 43% more than the previous year, although the losses are still very high: 3 billion dollars in 2018, 1 billion less than the previous year. Behind these results are the rapid expansion of the company in the world, the strong investment in technology and the purchases it continues to make, such as the acquisition in March of its competitor Careem for 3,100 million dollars. A company based in Dubai, which operates in 120 cities in the Middle East, the Maghreb and Southeast Asia and has 30 million users.
To recharge his financial batteries, the mobility giant went public on the New York Stock Exchange last May with a capitalization of 82,000 million dollars. Uber already has more than 20,000 employees and operates in more than 700 cities in 63 countries on six continents. In Spain, he landed in 2014, in Barcelona, but only a few months later he had to close before the first taxi driver mobilizations, the administrative fines he began to receive and the judicial decisions against him. He returned two years later, partly thanks to the favorable reports of the CNMC, and it is clear that he is here to stay, despite the new situation of the blockade in Barcelona.
Spain is one of the six priority countries for Uber worldwide at the moment, what we call a key market, "says Juan Galiardo, director of Uber in Spain, which together with Japan, Germany, and Italy, are the countries where the growth potential is greater for the group. "We have many cities with more than 300,000 inhabitants, we have two large cities, such as Madrid and Barcelona, a tremendous volume of tourists and an important mobility challenge ahead," said the executive, which considers that regulation remains the main obstacle for the business to explode, as it is doing in the rest of the world. "We are willing to invest strongly in Spain to develop all the potential that this market has if they leave us."
Driver transport vehicles are the great locomotive of the Uber business. Madrid already has 8,000 VTC licenses compared to the 15,000 taxis that circulate in its streets. "Unlike others, we do not have VTC licenses, they belong to private companies that have their fleets and in some cases to freelancers, exactly like the taxi. Uber is their sales channel and we give them our technological infrastructure so they can offer a better customer service The heart of our business is to provide service to the owners of VTC licenses We help them outsource many activities, because doing them individually is very expensive and, on the other hand, on a scale we can do it in a more efficient way. Some services for which we charge 25%," he explains while marking distances with Cabify, its great competitor in our country. "The main difference between the two is technological. In our favor is the volume of investment we make in our app and the things that it allows you to do. But I'm glad Cabify is here because I wonder how the regulation would have been if it didn't exist and it wasn't a Spanish company. I don't even want to think about it."
Galiardo believes that sometimes everything is simplified too much and that Uber is not just another mobile application. "The app is just the tip of the iceberg. Behind there is a lot of investment and research in artificial intelligence, machine learning, and algorithm development."
Uber has proposed to integrate all possible mobility possibilities into its application, including public transport. "We want to know if you are in a hurry or if you want to walk for a while, if you go to work or to a museum, and from there the application will build with all the possibilities that you have an optimal route for each moment," he says. In London, Denver or Boston, Uber users can now do it. There the integration between public and private transport is practically total. "In Europe, conversations with the administrations are very advanced, but in Spain, things are getting more complicated. I trust that with greater political stability we can talk, because we can contribute a lot to the Metro and the EMT, for example with the tourist user, improving the profitability of the deficit lines or in the mobile payment."
About Central Madrid, the director of Uber in Spain puts forward the global experience of the company: "We are lucky to see what is happening in the cities where we are in the world, and the truth is that many of them, not only European, they are restricting the traffic and access of the private car to the center in a very strong way due to the pollution and congestion of public spaces, clearly unsustainable. We share the objective of Central Madrid completely because there is no other, just like that But the important thing is to give alternatives because citizens have to move and more and more. You can build on what is already there and we can help improve it, "he drops. And he illustrates the experience in New Jersey and Nice, where it was decided not to build deterrent parking lots because "they realized that it was much cheaper for city councils to subsidize Uber trips from the periphery to the nearest metro or bus station."
The Uber director thinks that the worst of the taxi war has already passed: "I don't say the strikes are over, but I do believe that we will soon see a regulatory convergence between the taxi and the VTC. The rules of the game must be the same and to achieve this we will all have to make concessions. We are willing. Unfortunately, Barcelona is going in the opposite direction by granting the taxi a monopoly of immediacy. We would have liked that, instead of passing the powers to the autonomous communities, the Government would have been braver by regulating mobility in a more ambitious way at the national level, even if it is later expanded locally. "
Galiardo also emphasizes that "the VTC has been a very important source of job creation in these years. Few sectors have created so much employment in such a short time with salaries that are between 1,300 and 1,400 euros per month."
TAXI AND VTC TOGETHER IN THE 'APP'
This head of Uber believes that "the best way to collaborate with the taxi sector is by entering our platform, allowing them to use our services just like a VTC. We can help them improve their income. Based on the data we generate throughout the world, we think that the pre-contracted taxi would be much more efficient than the taxi in the street and, therefore, despite paying a commission, the net income would be higher. The taxi today spends a very high percentage of its time circulating in empty. The average taxi use is usually around 30% -35%, while ours is above 60%."
One of the key issues in taxi drivers' claims is the high cost they have had to assume to access a license against VTCs. "On the licenses many things have been said that are not true. Their value has not gone down nor will it go down with the current status quo, with the number of VTCs and taxis that exist and with the demand growing in double digits. Yes Madrid continues in this regulatory convergence, I believe that taxi revenues will continue to rise and those of VTCs will be exactly the same, and therefore, the license price will remain stable Another thing is that in the future the market will want to be opened even more, so that the city depends less and less on its own car. In Madrid, there are about four taxis and VTC per 1,000 inhabitants, in Paris there are six and in London, 12."
Galiardo believes that "if you eliminate the numerus clausus is when the license price disappears. That is when compensation with transition funds could be raised to help those who have invested in a taxi license and have not yet amortized it. For better or worse, we are still very far from this liberalization scenario. Today it would be misleading to talk about compensation funds when there is nothing to compensate for. The taxi license is still worth 100,000 euros in Madrid and the taxi revenues continue to rise."
But for Uber, the real adversary to beat is not the taxi, not even other platforms, but the private car. "The mobility model has so far been completely dominated by the car itself, which is our great competitor, not the taxi," says Galiardo, who thinks that "sometimes we don't realize the expense of having a car. Here is where the real transformation is taking place and where we all want to push to give citizens mobility alternatives. " D'Esposito estimates that the potential of this business is enormous: "Uber and its competitors do not add up to 1% of all trips that occur every day in the world."
A revolution in progress that has the main car manufacturers in suspense and adds to what is also causing the many environmental measures carried out by governments. "The business model of car manufacturers is changing and they recognize it themselves. One of the strategic decisions that Uber made in his day is that we were not going to go into car manufacturing and that is why we are destined to be a great partner of some of them and competitors of others who are developing their own Uber. I think the collaboration is going to be fundamental and we already see it in the autonomous car, where we are working side by side with some manufacturers."
Arriving at our destination, that is, at the end of this interview with several bands, I ask Juan Galiardo for an assessment of the political and economic situation at this time and his main certainties and fears: "Today there is tremendous polarization and tension in the world is not something exclusive to Spain. The confrontation is constant. What we saw in the taxi war is a symptom of a much bigger problem, in which sitting down to dialogue to reach points of agreement is increasingly difficult. It is, of course, a concern and I hope that in the months ahead we can overcome this polarization and this constant confrontation, and be able to have real content conversations, sit down with the technicians and get out of the political flags."
This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.
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