Monday, July 13, 2015

Who will win the Uber taxi war in South Africa?


The way that the taxi hailing app, Uber, has been received so far in South Africa by the taxi industry seems to be in line with the resistance experienced in France, the UK, the USA and many other countries. The meter taxi operators in the South African cities of Johannesburg and Cape Town are up in arms with Uber and are not having any of this “new-fangled nonsense” in their backyard. 

Just as the Luddite movement in early nineteenth century Britain reacted to the Industrial Revolution's ushering in of new machines in the factories (Violent protests and mass destruction of the new technology), we see similar patterns of response taking place today.

To a certain extent, it is understandable that when one’s livelihood is at stake, extreme measures are taken to defend it. There is need for a reality check, however. While the traditional taxi operators in Johannesburg, Cape Town and elsewhere in the world where Uber has entered have the support of government and the unions in their hostility towards Uber, the hard truth is that the growth of any technology that is efficient and cost effective to stakeholders, cannot be inhibited. The fact that this phone app has grown to a 41 billion dollar business empire is proof enough that it is here to stay and if current players want to stay relevant, they need to catch up with the times and see how they can align themselves with the evolving and technologically driven business world.

Uber itself has attacted competitors worldwide such as Lyft, Didi Kuaidi and Google who have come up with their own versions of ride sharing and e-transportation services. We need to kiss goodbye the romantic images of waving down a yellow cab on the sidewalks of New York or whistling for its black equivalent in the streets of London. Soon, the practice of having to unsuccessfully negotiate the hefty fares of cab operators at Johannesburg’s park station will be over. The frustration of phoning taxi companies and waiting for ages for a taxi to arrive will soon be history too.

Despite a few negative incidents, mobile apps such as Uber are generally offering faster, cheaper, safer and more reliable ways of securing a taxi ride. Features such as driver ratings by passengers mean that the old adage “The customer is king,” might just get a breath of fresh air. With time, we should see the Ubers of this world transforming not just the meter taxi industry of South Africa, but also it's notorious commuter minibus taxi (“Kombi”) counterpart.

We can easily predict what the reaction of the lot at the infamous Noord Street taxi rank will be; rowdy and violent.  Years ago, many traditional shop owners in the townships of South Africa when faced with competition from Asian immigrants who set up more competitive shops in the townships, chose to react by burning and looting the competitors’ shops and harming them physically. They however failed to reign in on the Asians who have now dominated the township retail industry. Had the local shop owners opted to find ways of becoming more competitive and emulating the methods of the new market players, many would still be in business today. 

Violence and intimidation are therefore not solutions when confronted by a business threat. Both the meter taxi and “Kombi” operators need to become proactive by studying the competitor’s business model and poising themselves to fit into the emerging scheme of things. Passengers will also have to come on board eventually as the momentum builds up towards techno-based transportation.

One hopes that as the “App Revolution” continues to unravel in many spheres of our lives, we will witness solutions that bring better services in clinics, hospitals, municipal offices, government departments and a host of other places where service delivery to the public is currently overpriced and totally lacking in quality.

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