THE STORY OF UBER
“ Industries operating under their current models will have to either adapt to these new technologies or perish.” the way traditional taxis work.
If you want some examples of other industries that have seen similar shakeups, here are a few of the most glaring:
• The music industry blatantly ignoring and dismissing digital music options, leading to file sharing sites like Napster, BitTorrent systems, and companies like Apple( with iTunes) taking over their market share.
• Kodak, one of the oldest names in photography, filed for bankruptcy in 2012, having completely missed the boat on digital photography and ignoring encroachment by phones into their market. Mobile phone photography has shaken up the entire industry.
• Netflix, and subsequently Hulu and Amazon, began to innovate streaming online video. By providing high quality, on-demand service to the people who wanted it, they have changed the entire landscape of television. This has even led to a long-term mainstay, HBO, having to release its streaming platform, HBO Go, to people not subscribed to cable merely to keep up the pace.
WHAT IS THE COMMON THREAD HERE? A new technology came along, disrupted the current state of affairs within an industry, and then knocked the current players off of their pedestal. Evolve or perish, as the old saying goes. Survival, in business especially, is sometimes a matter of how well a company is able to adapt their practices to the current landscape.
This is something which taxi companies are currently experiencing with Uber. For one thing, nobody has to talk on the phone. You don’ t have to call a dispatch and talk to someone to send out a taxi. The taxi is simply right there on your phone. You can get the closest driver available and be ready to go almost instantaneously, depending on how far away they are located.
SO WHAT MAKES THIS UNIQUE? WHAT ARE THE ISSUES?
• Every individual driver gets a rating. This works similarly to how Amazon or Yelp might collect reviews for individual products or companies. Unlike traditional companies, you basically know what you are going to get before the person shows up.
• Uber does not pay local taxes or licensing fees. They are, in truth, not a taxi company. Since their operations take place largely online, governments are unable to regulate them to the level that, perhaps, they need to. Traditional taxi companies hate this and have begun protesting.
• Uber does not require different contact information for different locales. The same app will get you a driver in Los Angeles, New York, or right around the corner from your house. This means one company will have you covered anywhere.
• Taxis have to adhere to regulations. They have to pay for permits. Uber, like it or not, removes bureaucracy from the equation. You click the app and you get a driver. For drivers, they sign up and go through a background check and are good to go.
Note the response that the traditional taxi companies have had to many of these problems. Is it to improve their own service? Develop a mobile app their own customers can use? No. It has been to declare that Uber is“ unfair” and that the old ways need to stay. This has, of course, never worked. Entire business courses are taught on this type of market disruption and, every single time, the solution has been to either adapt or shutter the doors. Complaining and turning to the government for help is not the right solution.
Any industry, in truth, could experience this. It is impossible to know which one might see it next, but it could happen anywhere and at any time. There is no shortage of industrious entrepreneurs out there with an Internet connection and all the new technology they could need to change the world. The really perplexing part is, industries often don’ t know they need shaking up. People don’ t know they want something different until they experience it. As Henry Ford once said,“ If I had asked people what they wanted, they would have said faster horses.”
Uber is doing what hundreds of other companies have done since the beginning of business.
THEY CREATED A PRODUCT AS A RESULT OF DEMAND USING NEW TECHNOLOGY THAT DISRUPTED THE OLD WAYS OF DOING THINGS.
Much like record companies having to accept digital music options, and camera companies having to deal with the existence of high quality camera-phones, taxi companies are now experiencing the same disruption. It would pay to think about new advances in the industry you are in as well. Is someone waiting in the wings to throw a wrench into the way you typically do business? If so, what are you planning to do in response? +
FALL 2016 | 27