A Cheaper Rival To Uber Has Just Launched In London... And It Pays Its VAT

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A Cheaper Rival To Uber Has Just Launched In London... And It Pays Its VAT
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A new private-hire vehicle service has launched in London, calling out its rival, Uber, for avoiding paying local taxes.

Kapten claims it's about to make the biggest shake-up in London's travel network since Uber launched here seven years ago. The French company, founded in 2012, will take on London with 5,000-10,000 drivers, according to the FT, launching with a 50% discount on all rides.

After that, it claims its average fares will be 20% cheaper than the competition, with trips in the congestion charge zone at least £2 cheaper than Uber.

Another boon offered by the service: the rider knows the exact price of the journey before the trip is booked.

A billboard for Kapten in Leicester Square

What will particularly stick in the craw for Uber is Kapten's peppy campaign, hammering home the unpalatable truth that Uber uses loopholes to avoid paying VAT. (This is something that has not endeared Uber to TfL). Says a spokesperson for Kapten, "Each time a Londoner takes an Uber ride, 60p of VAT is lost that could finance the NHS, schools and other parts of the UK economy".

It's a strong moral stance to assume, but what chance does Kapten really stand in this competitive environment? Well, it does have TfL's approval — something that the mayfly-speed birth-and-demise of Taxify in 2017, couldn't claim. In its native France, Kapten has grown to become the second-largest car-booking app in France, with three million users. An aggressive campaign of growth has seen it clock up 80,000 users in Lisbon, and it wants to be in 15 cities by next year.

As we all know though, with rapid growth, comes great pressure — and often a tweaking of customer value (and company values).

In the immediate future, Uber can at least expect to shoulder the effects of Kapten's first broadside, as Londoners download the new app, to score a 50%-off ride.

Last Updated 16 May 2019