Tagged: Cab

Here’s why Uber is eating your lunch

THE RISE of the smartphone alongside the Internet, has lead to a plethora of disruptive innovation. A paradigm shift has occurred, so profound and fundamental in its effects, that analysts refer to the fourth industrial revolution and the Internet of Things. The rapid pace of change has caught metered taxi operators sleeping.  Though more than two years has passed since the upstart Uber company appeared on our shores,  metered taxi operators have not found the means to get their proverbial shit together.

Instead of innovating, by producing smartphone apps and websites that would allow consumers to book taxis online, pay with bank cards and utilize the electronic transactions which litter our modern lifestyles — instead of producing efficiency and allowing clients to enjoy the benefits of GPS and other innovations — the metered taxi industry has instead resorted to a bit of disruption of their own. And it is not all good.

Following the equally myopic truckers blockade, the rise of taxi turf wars and a new form of strike action, all may be seen as the gross failure of operators to come to grips with the accomplishments of the new technology. Now one may sympathise with those critics who point out that Uber has merely shifted the cost of operating a taxi from the operator to the taxi driver, the company distributed as it is, allows own-vehicle drivers to enter an otherwise regulated marketplace, and has thus disrupted the cab industry in every city which has adopted mobile telephony. The thing is, Uber’s success is not simply a case of cutting costs.

For years, the cab market has relied upon a form of cartel behaviour, regulated monopolies and guaranteed markets.  The regulations that inform the industry have themselves been the very reason why cab operators have failed to innovate. The reliance on legislation instead of innovation, has resulted in the lack of motive force needed to deliver product and services efficiently, in a marketplace where the type of person who uses a cab is usually not able to afford a vehicle. Uber on the other hand has liberated consumers who would otherwise shirk at the cost of a metered taxi, and who risk being treated as tourists, from the up-market cab operators who seem only to cater to people on holiday.

Software has thus brought greater efficiency in routes, has allowed drivers to gain control over their lives, to save petrol by redirecting around traffic, to know who it is they are letting inside their vehicles, and it is these innovations which are driving the new market, concerned as it is, with safety and affordability, and which has sprung up like fresh daisies around the smartphone. Unless the entire cab industry adapts, then those laggards currently holding Jozi to ransom, must necessarily be allowed to whither away and die, the same way that Hansom cabs and cab drivers with horse-drawn buggies, died out when the automobile brought along a more efficient means of transport.

The current strike action in Gauteng is thus nothing less than the equivalent of a group of irate Hansom Cab drivers demanding protection from the new Anti-Horse technology. One can only feel a sense of pathos, for the inevitable.

SEE: Africa: Two Very Different Responses to Uber – Kenya and South Africa