The taxi industry needs a new direction

Ridesharing is no safer than hitch-hiking

“Ridesharing. It’s no safer than hitch-hiking.” These are the words splashed across a massive billboard at Sydney’s Kingsford Smith Airport, paid for by the NSW Taxi Council.

According to the NSW Taxi Council’s website, “the new campaign is highlighting the risks of illegal taxi services, including ridesharing”. While this particular ad didn’t single out any particular company, it’s blatantly obvious who the message is aimed at — Uber, its users and everyone else in the sharing economy.

Poorly planned PR campaigns can actually turn existing customers away. Uber reports it has delivered a million rides locally which, if accurate, suggest that the cashed-up company is having more than a small impact on the taxi industry. At least a million people would instantly dismiss the NSW Taxi Council’s fear mongering because they have personal experience of ridesharing and can see no basis for the inaccurate comparison with hitch-hiking.

Yet if Uber wanted to resonate with disaffected taxi customers, they really couldn’t have asked for a better outcome. Earlier in April, strikes by cabbies in Perth, resulted in a 500 per cent increase in Uber requests. You would have expected the taxi industry to use that as proof that going on strike is not the solution. Instead, we saw more strikes from cabbies in Sydney and Melbourne just last week.

Complaining about your competitors is rarely an effective way of beating them – this is PR and Business 101. The NSW Taxi Council has failed to understand that safety of passengers in the 21st century does not require heavy-handed government legislation.

In 2012, a Taxi Industry Inquiry report led by former ACCC chair Allan Fels, recommended that the taxi industry must concentrate on improving driver quality, safety, fare structure, booking services and taxi availability. Yet the taxi industry has continued to tell people who call a cab that ‘first available’ is good enough.

When start-ups like GoCatch, Ingogo, Uber and other ridesharing services can provide driver details, pick up time and show it all on a map in the palm of your hand, you have to wonder if the taxi industry understands what customer service really means.

The list of disruptive companies that have gone on to dominate the industries they usurp is endless, but the number of companies that have been successful by rejecting change and ignoring consumer sentiment is almost zero. Does anyone remember Kodak?

Some paint this conflict as a fight between the taxi monopoly and disruptive startups, but the truth is that there’s a lot more at stake. Australia’s reputation for encouraging innovation is at risk if the NSW Taxi Council is able to bully the government to implement legislation that blocks the innovation and change that ridesharing represents.

Toronto is looking to update its by-laws to recognise new technologies like Uber by creating a new category for Uber and other ridesharing services, a system already used in more than 60 jurisdictions in the US. Taxi customers certainly won’t feel loyal to an industry that has failed to provide a strong argument in favour of its existence. Instead, consumers will vote with their wallets and opt for the one that provides a better product and service.

The taxi industry here would prefer that ridesharing services be legislated out of business entirely, the reality is that these services are making the best of constantly evolving and improving technology.

While Uber has some work to do to avoid regulatory hurdles in Australia and no company should be encouraged to deliberately break the law, we need the Taxi Council to join forces with innovators to make transportation more efficient, more accessible and less expensive than ever before.

 

This article originally appeared in the Australian Business Review:
http://www.businessspectator.com.au/article/2015/9/28/technology/taxi-industry-needs-new-direction

 

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