Why Uber should and will win out over cabs

Uber isn’t killing the livelihoods of cabbies and taxi owners. They’re doing that to themselves by refusing to innovate and rise to the challenge presented by Uber.

I’m betting that a good portion of Uber’s income goes straight into the pockets of lawyers. For years now, Uber have been defending their service in countless nations, states, counties and cities in expensive and protracted lawsuits.

For those who have been living under a rock for the past 5 years, Uber is a service that connects people who need a ride with people with a car. It’s similar to the very familiar concept of taxis, except that one must privately order a ride from an Uber driver rather than hailing an Uber on the street.

Uber has been immensely successful and taxi drivers and owners rightly see this as a threat to their livelihood. Someone came up with a better way for connecting drivers and riders than the centuries old method that most cabs continue to employ. Now anyone with a smartphone can quickly and easily say where they are and where they want to go and an Uber will typically be able to pick them up within a few minutes.

Investing in cabs

My Dad owns a good number of cabs. He was a policeman for 30 years and after he finished his service he did several jobs just because he liked them and it was something to do. In the past few years though, he’s purchased a small fleet of cabs which he has drivers for. He put a good chunk of money into investing in these cabs (which are more expensive than you might think!) and his business is dependent on paying off that investment and making a profit at the same time.

My Dad is emotionally and financially invested in his cabs succeeding whereas I don’t have that attachment. Naturally he is against Uber but I’ve tried reasoning with him from an unbiased point of view. Here’s the way I see it:

Innovation breeds competition

Competition is a crucial component to free markets / capitalism which keeps the economic machine spinning. By having competition in a market, competitors are forced to fight for business which drives down cost and destroys monopolies – all good things for consumers.

It should also be seen as good for business. By continuously innovating and changing, businesses meet the needs of their customers and customer satisfaction is high. However, in a business where there isn’t much room for innovation (think electricity suppliers, or taxi cabs) it can be easy to get into a rut of just plodding along with a business-as-usual mentality. As such, when a technology comes along that provides the potential to disrupt a market (like the Internet and smartphones) these businesses can be caught off guard by some bright spark who connects the dots and creates something new that makes the service better.

Uber saw an opportunity to use technology now in the hands of many to provide those with a need with those who can meet it and it’s a more attractive option to many than hailing a cab.

Taxis do a world of good and I have a lot of respect and sympathy for those who today find themselves in the taxi business, including my Dad. However, innovation should not be stifled because we have a lot invested in the ways of old. Yes, Uber has revolutionised an industry which was stagnant for decades. Yes, it’s going to mean that taxi cabs no longer have the sizeable monopoly that they’ve enjoyed for a long time which in turn is going to mean reduced incomes and having to fight more for business. But, the greater good is to allow innovation to continue to make our lives easier and better, which is exactly what Uber does.

Uber employs people too

Let’s not forget that Uber is now allowing people who have a few extra hours and a car to make some money to pay for a night out or for their kids’ tuition. Uber is empowering people who previously had no means of working by connecting them with someone who needs what they have.

Humanity strives to make things better and easier, and any attempt to legislate against these efforts will ultimately prove futile. In market economies, the people have power and they vote with their wallets. People want Uber because it improves their lives and taxi drivers fighting against it are seen as desperately clinging on to something that is good for them but no one else which only makes the case for Uber stronger.

If they were smart, they’d accept that times are changing, but critically, that this presents them with an opportunity, not a challenge. They’d realise that they have something that Uber doesn’t – a license to pick customers up on the street – and they’d use that advantage to innovate and provide a service which will rival Uber rather than fighting a losing battle.

Sorry cabbies, there’s little sympathy from me. Innovate or die.

Author: Dave

Dave is many things. Most importantly, he’s a husband and a father to Ellie and Jack. Almost as important, he’s British (though he lives in Florida). Following on from there, he’s a WordPress developer and civil engineer, has an unhealthy love of hummus, is vegan, likes cider, wants to travel to Iceland and Japan, loves solving puzzles and is a realist.

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