Anyone following my Twitter feed or spending a moderate amount of time with me lately would have seen my rant about Uber. I was intrigued by the idea because of the potential for technology to disrupt a long-standing, stagnant industry: taxis. And, as someone who’s spent a little time over the years thinking about corporate strategy, I always have a morbid curiosity to see the next buggy whip industry begin to rage against the dying of the light.
Usually, when an industry is caught with their pants down and eventually admits to themselves that they see the end coming, you’ll see a variety of tactics by the incumbents. Some companies resign themselves and try to adapt, while others try to hold their ground, usually out of cultural stubbornness or an outright inability to make the change. In the latter case, companies will try to appeal to any existing sense of nostalgia for their products (see: Kodak). In other cases, they’ll fall back on regulation — either saying the threatening companies don’t comply, or trying to ensure they’re included in the regulation, knowing that burden placed on a small company with no industry lobby/alliance would crush them. Often the regulations are valid, but in the cases where the incumbents invoke arcane and irrelevant regulation, or make attempts at scaremongering, then you know they’re in trouble.
Hence, the taxi industry has begun railing at Uber in its various cities, saying it doesn’t met regs. Last week the Taxicab, Limousine & Paratransit Association sent a document to media outlets in Toronto making their case against “Rogue apps” like Uber. Speaking of scaremongering, note the title and subtitle of the report: words like “rogue” and “threat to public safety” are classic examples, meant to scare the townsfolk. Taxi associations in Washington, D.C. started pushing back earlier this year as well.
Really, though, the buggy whip is the wrong analogy. That was an example of an industry failing to adapt to the advent of replacement technology — the car — which quickly became the decided preference of most customers. But Uber isn’t that. The core product remains the same: a car takes your from point A to point B. There are two ways in which Uber differs from regular cabs: 1) the smart phone app used to summon Uber cars, and 2) the quality of the service itself. Let’s examine those:
Sure, it’s slick that smart phone users can summon a car from their iPhone, get an ETA, see the assigned car on a map as it approaches, easily call the driver if plans change, get an email receipt upon arrival, and rate their driver. But most of those things are nearly as simple with a traditional cab: you call a number, you give the dispatcher your address (I’ve not stumped one yet), and you can get a (paper) receipt on arrival if you need one. Seeing the car inching across a map is nice, as is getting an email receipt, but they’re not game-changers. To me, the two key features are being to rate your driver (and knowing those ratings inform future drivers, and knowing the reverse is true), and another one I didn’t mention: convenience of payment. With Uber you simply have a pre-loaded credit card that’s charged when you arrive. You don’t have to fumble for cash. You don’t have to linger in the cab while the cabbie rummages for correct change (which they often don’t have), while the irate drivers behind you honk incessantly. I like all the features of the technology, but the ease of payment is a killer feature. Still, it’s not enough to scare the taxi industry, and it doesn’t play much part in their complaints to regulators.
This, to me, is the key. This, not the technology, is what creates Uber devotees. When I hail a Toronto cab, the very best I can hope for is an experience that’s not terrible. That’s it. That’s the bar. If you’re lucky you’ll get a cab that isn’t a mess, doesn’t stink of cigarette smoke (like the one I was forced to take yesterday) or something worse, runs well, and is temperature-controlled (I’ve had cabbies refuse to turn on the AC on heat-warning days). Meanwhile, Uber cars are immaculate, spacious, and comfortable. Sometimes they provide free bottled water, though I suspect that’s something the drivers pay for themselves.
The TLPA warned against the inaccuracy of the GPS in Uber cars. Personally, I’ve never had (or heard of a problem), unlike Toronto taxis where I have on countless occasions been forced to give my driver directions after he has started driving in the wrong direction, even though I live at major downtown cross-streets. Moreover, I’ve caught two deliberately taking longer routes; when I challenged them they claimed it was faster, which was patently false. Upon arrival I asked them to adjust the meter. Both times they refused; one threatened to call the police. All I could do was refuse a tip; even then, one claimed he didn’t have change. I called the cab company to complain, but the driver wasn’t displaying his medallion or cab number. Conversely, with Uber I’ve had only one incident where a driver missed a turn, got confused and took a roundabout trip to our destination, for which he apologized. When I provided my post-trip rating to Uber along with the explanation for the low rating, Uber instantly took $5 off my fare and apologized again.
Never, in my dozens of Uber rides, have I witnessed unsafe behaviour on the part of their drivers. Meanwhile, since moving to Toronto I’ve been a passenger in a taxi which drove through a red light and ran into a dump truck (I wasn’t seriously injured, but the driver couldn’t have cared less anyway; he was only interested in the damage to his car, and didn’t so much as apologize). I was never contacted by the cab company for an apology. I’ve been stuck inside a taxi as he chased a car — at higher speeds than were prudent on city streets — which had cut him off earlier, and refused to pull over. I got out at a light as he got out to confront the driver; he told me to get back in the cab as I still had to pay. I’ve also been hit by a cab driver doing a rolling right turn at a red light. He was on his cell phone and didn’t notice me on the cross-walk. I wasn’t hurt, but I fell on the hood of his car. He simply kept driving and talking on his phone. I recently took a taxi driven by a man who clearly hadn’t bathed in days. I took a cab (with my parents, no less) driven by a guy who had just smoked a joint. I could go on and on and still not recount all the poor experiences I’ve forgotten over the years. I’ve had good cabs/drivers too, but they’re the distinct exception. Like I said, the best I can hope for when hailing a Toronto cab is a not-terrible experience. When an Uber cab shows up, I expect a superb experience. And I get it. For a 10-15% premium (not the laughable 40-60% premium the TLPA claims) I’ll take that option whenever I can.
Taxi companies have begun to copy the technology side of Uber’s offering. Interestingly, Uber now allows you call a regular cab from their app too, suggesting at least some cab drivers are willing to work for/with them. Perhaps replicating Uber’s service will be cost-prohibitive for traditional taxi companies under their current regulatory requirements, though that doesn’t seem to be the thrust of their complaints, and I’ve certainly not seen taxi companies make a move in the better-service direction. If the playing field is to be evened, then the regs should be applied fairly to Uber, not in a punitive manner resulting from their lack of safety-in-numbers the taxi industry enjoys.
Even if the TLPA and others do manage to temporarily impose limits or regs on Uber, it won’t kill the idea. Buggy whip manufacturers likely raised issues of public safety concerning the automobile. The ice delivery industry probably declared refrigerators safety hazards. The music industry wailed and gnashed their teeth at Napster ostensibly on behalf of poor starving artists, but really on behalf of their profits. Uber found a way to deliver a better product. That scares the people who’ve made a lot of money (I mean the taxi companies, not the drivers) delivering the bad product, and so they’ll rail against the progress.
But that never lasts long.
Photo by pgaif13, used under Creative Commons license. And I was by no means trying to single out Beck Taxi in relation to my story — I just liked the picture. Beck is actually one of the better companies in Toronto…though that’s not a high bar.