Uber threat

June 14, 2014 - 1:32:11 am

Cabbies are feeling threatened by the new app, but they must learn to adapt and move on. 

The world has become accustomed to disruptive technologies. Silicon Valley churns them out with a mission, upending people’s lives in varying degrees. The latest is the controversial Uber app. Cabbies hate Uber, the California-based company that lets people become unlicensed taxi drivers using their own cars. The new technology threatens to hit the livelihood of tens of thousands of cabbies and sensing the danger to their jobs, taxi drivers in several European cities went on strike on Wednesday, causing traffic chaos from London to Berlin and Paris to Madrid.

The advantage of Uber is that people can save money using these services. They can also make some money by turning around and providing the taxi services themselves, using their cars. That’s a wonderful idea many car owners would welcome because not all car owners are rich. And taxi drivers have a reason to protest: theirs is a hard-earned job in which they have spent years. It’s not easy to learn about every street of the city and follow all the traffic rules.

But can their strikes stop the new technology? It’s highly unlikely. New technologies have always upset traditional and time-tested professions, and if this one threatens cabbies, it’s their bad luck. Governments all over the world have seldom acted to stop new technologies, as such measures are impractical and counter-productive because new technologies have a way of circumventing everything like water flowing around their obstacles. 

There is no doubt that the new app will be useful for people in cities where taxis are in short supply or when major events keep all of them busy. For example, Paris has one of the lowest cab-to-person ratios in major European cities and the lowest levels of consumer satisfaction, with the population of the city growing by 20-plus million. Taxi licences are difficult to get and there’s a reported 17-year wait-list for a licence, which go for as much as $271,000 to $338,600 on the secondary market. 

But one major problem Uber will have to surmount is that taxi service is a highly regulated business and the new app is sure to threaten this regulation. There are other issues to be addressed like insurance for passengers. The governments must be grappling with these issues and thinking of ways to protect thousands of jobs.

Uber has now pushed into 37 countries, and with big money and buzz behind it, it seems unlikely that the company won’t decisively break into the European market. Taxi drivers of developing countries too are likely to feel the heat of the new technology.

In short, technology breeds disruption, so we must learn to adapt and move on. But with the streets blocked, that won’t be easy.