1st Aug 2014 09:26
LONDON (Alliance News) - Eco City Vehicles PLC, the developer and supplier of the London licensed Mercedes Vito taxi, Friday blamed taxi booking app Uber and London Mayor Boris Johnson for causing its market to remain challenging in the first half of the year.
Eco City Vehicles said its revenue in the six months to June 30 declined by 33% to GBP11.14 million, down from GBP17.0 million a year earlier, as new Vito taxi sales declined to only 139 vehicles, compared with 299 in the first-half of last year. It said the Vito's share of the new London licensed taxi market fell to 24%, from 44% a year earlier.
"Trading has remained challenging mainly due to uncertainty caused in the London licensed taxi trade by the emergence of Uber as well as the Mayor of London's proposed introduction of zero emissions standards from 2018," the company said.
The spread of Uber from the US to cities across the world has caused a wave of protests from local cab drivers who say the US firm is undercutting them and allowing potentially unlicensed cab drivers to take trade. However, supporters say the app is both convenient for consumers and leads to lower taxi fares, and resident cab firms need to modernise and adapt rather than trying to block Uber's use.
In London, drivers of the city's iconic "black cabs" last month staged protests, blocking the centre of the city with their cars. The black cab drivers have also gone to court in a dispute over whether Uber operates a type of taxi meter, which only black cab drivers are entitled to use in London presently.
Despite this, the app has seen a big early increase in downloads in London after its launch.
The industry is also facing uncertainty after London Mayor Boris Johnson in January announced that all new taxis in London should be capable of emitting zero emissions from 2018.
In a positive note, Eco City Vehicles said demand for its rental fleet has continued to grow, with its rental fleet expanding by 30 vehicles to 75 vehicles.
The company said net debt fell in the period, after it repaid a pension scheme loan earlier in the year. However, it reiterated that it expects to need additional funding this year as trading so far in 2014 has been slow.
"The board is also in the process of reviewing its strategic options for the group, although such review does not include the consideration or solicitation of bids for the listed group," it said.
The company's stock was untraded Friday morning at 0.650 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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