Lee Ramps Up Battle Against Uber Acquiring Flyte Tyme
Addison Lee, a London-based private hire company have officially acquired US executive car firm Flyte Tyme for $25m (£20.5m). Although the deal isn’t one of the largest of recent years, it is highly significant, as it turns the private hire company into one of the world’s largest global chauffer company and intensifies their battle against Uber.
Addison Lee’s 10th Acquisition in 6 Years
Founded by ex-cabbie John Griffin in 1975, Addison Lee has grown from being a single car operation to running a fleet of 5,000 cars in central London alone, with the company carrying 10 million passengers across the capital each year.
The deal isn’t the first of its kind for Addison Lee, either. The deal is Addison Lee’s 10th acquisition in the last 6 years. These acquisitions are part of a wider growth strategy, intending to boost their international growth. In the face of incredibly stiff competition from rival firm Uber, they’re also looking to leverage their mobile app in cities outside London.
Addison Lee was acquired by US private equity firm Carlyle Group back in 2013 for £300m. It currently operates in the US, Europe and Asia. Since the takeover, Addison Lee has acquired the London-based Cyclone VIP Cars & Couriers, as well as Tristar, which operates in 80 countries. It is hoped that the acquisition of Flyte Tyme will help boost the group’s annual sales to almost £400m.
Is the Deal A Good One?
The move certainly expands the capacity of Addison Lee, giving them the fleet size to keep pace with Uber, who are still considered to be the main giant in the market.
However, it also gives Addison Lee the ability to combine the North American presence of Flyte Tyme with Tristar’s global operations and their own digital booking platforms. Overall, it is hoped that this will give the company the edge over Uber, as it will allow them to provide globally managed ground transportation services through a single platform, according to Addison Lee’s Chief Executive, Andy Boland.
Echoing this, and commenting on the acquisition, Timothy Rose, the current Chief Executive of Flye Tyme stated that “through this acquisition, we will be able to leverage our combined technology and client service capabilities”. As part of the acquisition, he will now head up Addison Lee’s North American division.
However, although there are a number of positives to the deal, there are also a number of negatives, too. For example, in the current post-Brexit landscape, the value of the pound has weakened considerably. A look at the recent exchange rates on foreignexchange.com reveals that the pound has fallen to around 1.26 against the dollar, which has been resurgent since Donald Trump officially took office. Going back to the start of 2016, the pound was much stronger against the dollar, at around 1.42.
Although this may only seem like a minor change in currency value, the equivalent for the $25m deal is actually several million pounds. So, although it still appears to represent a good deal for Addison Lee, if it had been agreed pre-Brexit, it could have been considerably cheaper.
To conclude, Addison Lee’s acquisition of Flyte Tyme appears as though it could position them as major challengers to Uber’s dominance in the sector, particularly in North America. It will be interesting to see whether the company’s acquisition strategy continues at the same pace in the coming years in order to continually challenge Uber’s dominance.