25 Nov 2019
Posted in Press Release
Revocation of Uber’s licence will have impacts on the insurtech sector
Following today’s news (Monday 25th November) that Transport for London (TFL) will not grant a new license to Uber to operate in London after repeated safety failures;
Yasha Kuruvilla, Associate Analyst at GlobalData, a leading data and analytics company, offers his views:
“TFL’s decision will not only have impacts on the thousands of drivers and millions of passengers that use the service, but also specialized insurtechs that have developed products to specifically cater to the ride sharing market.
“Companies like Inshur and Zego are built around providing quick and flexible insurance to the ride sharing and ride hailing economy. Inshur entered into a partnership with Uber in May of this year while Zego recently became the first UK insurtech to be granted its own insurance licence, allowing it greater flexibility when creating its products.
“However, following today’s news, these two companies, and others like them, will be worried that one of their core customer groups may soon be non-existent.
“The predicament Uber finds itself in also points to a wider trend. Regulation often lags behind the market, and TFL’s decision is just one example of this. Once new economies grow to a size where regulators can no longer ignore it, decisions will likely be made that will negatively affect businesses acting within them.
“Insurtechs will be disproportionally affected by new regulation in the short term because of their highly specialized nature compared to the larger incumbent players. While it may be Inshur and Zego that feel the brunt of it today, it is simply a matter of time before new regulation hamstrings another insurtech in the market.”