Tech

Uber is buying a taxi software company to expand its foothold in the UK

Key Points
  • The deal will allow Uber to use U.K.-based Autocab's marketplace tech to connect users with local taxi operators.
  • Uber only operates in 40 towns and cities but is hoping to expand to 170 regions with its acquisition of Autocab.
  • But it comes at an awkward time for Uber, which is battling to stop regulators from banning it in London.
In this photo illustration the Uber logo is displayed on a phone in front of Tower Bridge on November 25, 2019 in London, England.
Peter Summers | Getty Images

Uber said Thursday that it will buy British taxi software company Autocab in a bid to expand its presence in the country.

The deal will allow Uber to use Autocab's marketplace technology to connect users with local taxi operators. Called iGo, the software was originally developed by Autocab to help taxi operators compete with ride-hailing apps like Uber.

Though Uber has a big foothold in the U.K. — particularly in London — it still only operates in 40 towns and cities. With its acquisition of Autocab, the company is aiming to fill the gaps by expanding to 170 regions.

"Autocab has worked successfully with taxi and private hire operators around the world for more than thirty years and Uber has a lot to learn from their experience," said Jamie Heywood, Uber's regional general manager of Northern & Eastern Europe.

"We look forward to working with the Autocab team to help local operators grow and provide drivers with genuine earnings opportunities."

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Financial terms were not disclosed by Uber. It's also not clear whether it could require regulatory approval. Uber maintains that it doesn't compete with Autocab.

But the deal comes at an awkward time for Uber, which is currently battling to stop regulators from banning it in London. The city's transport watchdog, Transport for London, chose not to renew Uber's license to operate in the U.K. capital last year, claiming it put passengers' safety at risk.

Uber is currently in the process of appealing TfL's decision, which means it can still continue operating in London for now. Its appeal is set to be heard in court next month.

Another legal fight in the U.K. could jeopardize Uber's business model. Uber took its appeal against a ruling that its drivers should be classified as workers and not freelancers to the country's Supreme Court last month. If Uber loses, this could have significant ramifications for the company and the so-called gig economy.

Uber reports earnings after the bell Thursday.