(Bloomberg) -- New entrants to the London ride-hailing market could potentially pose a risk to one of Uber Technologies (NYSE:UBER) Inc.’s most profitable markets, according to analysts at Morgan Stanley.
Every 400 basis point change in U.K. rideshare adjusted net revenue would result in a $100 million hit to Uber’s 2020 profit, analysts led by Brian Nowak wrote in a note on Thursday. The country accounted for 4-8% of Uber’s 2018 rideshare bookings, they estimated.
The warning came after Daimler AG-backed Bolt, formerly known as Taxify, relaunched in the British capital this week, with India’s Ola set to enter the U.K. market by the end of the year.
The analysts noted that the “headlines may be worse than the reality,” as it’s still unclear exactly how much funding the new entrants will have, and how quickly users will adopt the rival applications. Uber has had some success in fighting off competition in countries like Brazil, they said.
“But if a market-share battle ensues, it’s a risk.”