Wednesday, May 06, 2015

Taxi industry will suffer if it refuses to embrace Uber

Sometimes the loudest opponents of innovation should simply be ignored.

Threatened by the growing popularity of ride-sharing app Uber, the Australia taxi industry has resorted to a campaign of misinformation to protect its market share.

In a response to state Opposition Leader Matthew Guy, who has called for the Government to embrace the service, the Victorian Taxi Association raised the prospect of safety concerns to attack its competitor.

Victorian Taxi Association CEO David Samuel remarked that he was "concerned that a senior member of Parliament would associate himself with a dangerous and illegal service".

Samuel's comments mirror the message from the Australian Taxi Industry Association, which last month claimed to be concerned with community safety, because of the dangers of this "imitation taxi service".

The problem with this party line is that it's just not credible.

As users of Uber can attest, the service — which is based in San Francisco, operates in 55 countries and more than 200 cities across the globe and which is predicted to generate more than $10 billion in revenue by the end of the year — provides a cheap and convenient method of transport, which is considerably safer than traditional taxis.  And it's only the first of a raft of similar services.

Taxi drivers have a dangerous and often difficult job.  They carry large amounts of cash and pick anonymous customers up off the street.

That can create risks for both drivers and passengers.  Passengers can be assaulted and drivers robbed, and there is no guarantee that the offender can be identified when a crime is committed.

Uber has significantly reduced those risks.  The ride-sharing app facilitates a cashless transaction and both the driver and passenger know the other's details before the ride begins.

If a crime does occur, then all of the perpetrator's personal information is available and can be sent directly to the police.  That means that anyone stupid enough to assault an Uber driver, or a driver stupid enough to assault a passenger, will effectively be leaving a copy of their driver's licence and credit card with the victim of the crime.

Uber's rating system provides an additional mechanism for quality assurance.

Both the driver and passenger are able to rate the experience after each ride occurs.  Drivers who fail to keep a high rating — a 4-star rating, according to one Uber driver — are kicked off the platform.  Customers with a poor rating are unlikely to be able to find a ride.

There are, of course, anecdotal examples of dangerous Uber experience, because no system is perfect.  But a simple Google search also turns up several news reports of taxi-related crimes this year alone.

Recently the Herald Sun reported that a bureaucratic mistake had allowed a Melbourne taxi driver to continue driving for two years, despite having being found guilty of groping a teenage girl.

According to Victoria Police, there were 51 assaults committed in taxis in 2013-14 and 60 assaults in the year before.

Those statistics highlight the hypocrisy of the taxi industry.  If the Victorian Taxi Association and the Australian Taxi Industry Association were truly concerned by public safety, and the safety of their drivers, then they would embrace the innovations that Uber has provided.

Unfortunately, they appear to be too afraid of the increased competition and instead are calling for the Government to shut Uber down.

Hopefully, the Andrews Government managed to resist what is an anti-competitive approach when it met with industry and community representatives recently.

Ultimately, however, Uber's success will be determined by the public.  If recent trends continue, then Uber will continue to grow and the taxi industry will be forced to adapt or die.

Uber is safer, cheaper, and more convenient than traditional taxi services.  But don't take my word for it, try it for yourself.


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