How would you react if I told you that if I asked just one question the answer could potentially tell you if you are going to be highly successful or if your days in business could be numbered? Well, I think I have just cracked it.
Over the last month or so I have been undertaking a very detailed, precise scientific experiment and survey. Well to be quite honest, no science was involved and the survey was taken from different people who merely walked through my door. But the representative sample was good enough.
The question was very simple one. Are you for or against Uber, the highly controversial taxi company?
Being an entrepreneur, I love new business systems, or business models that totally transform an industry. Uber is doing just that and is disjointing a number of registered taxi drivers’ noses. Governments are being lobbied to stop Uber and that always is a concern because any attempt to stop the market usually ends in spending lots of money and being unsuccessful. Just look at Ford and Holden. Fat lot of good all our billions did there.
Here’s what my research showed.
1. Most of my business savvy, successful business owners thought Uber is a great business and the industry needs to change. Not all these people are rolling in money. A few are struggling to get their business off the ground, but they are looking to the future. These are people who may not have a great business yet, but are still testing the market with different products or services.
2. Most of my ordinary business owners who are mostly small businesses and mostly work for themselves and maybe have a few employees felt that what was happening to the taxi drivers was unfair. Generally, these businesses had not changed much in the last 5 years or so.
3. Those not in business mostly wanted everything to stay the same as the taxi driver had trained and paid for their licences.
But here’s the thing. Business is not fair. If fact, it is a ruthless and cutthroat. Successful business people understand that you cannot stop market change. You either embrace it and work with it or you have to accept that eventually you will be priced out of the market and have to shut up shop.
As a business, you have to change and adapt to the conditions of your business environment. The internet has totally transformed the way we do business. If you don’t change someone else will and before you know it half your business is gone. This is exactly what Uber has done.
Due to outdated practices and cost structure taxi fares in Australia are outrageously expensive. A couple of years ago I paid $160 for a 45 minute ride in Sydney. I flew into Sydney that morning from Brisbane for less! How can this be?
Now, I don’t really want to get into a discussion on why Uber is good or bad, but if you are interested it is below. My message is that if you are unwilling to adapt, accept that your days could be numbered because the internet has the ability to attack every business in every industry.
The problem was that the taxi industry had a monopoly. A new player has come in and they do not know what to do. Instead of changing and adapting they want to charge my business more money because their system is inefficient. As a business owner my job is to keep my costs low. If that means I get the same or better service elsewhere and the cost is lower, can someone please tell me why I should not do it?
So here is my justification on why I think Uber is a great business model.
Let’s go back to basics. The Taxi regulation was set up for safety reasons. If you were overcharged you could complain even though most never did. The cars were meant to be clean. The driver informative about his route and pleasant to be with.
The government charges the taxi firms a lot of money for regulating our safety– which is then charged to us, the punters.
The problem is in this day and age it’s all nonsense. In the UK a taxi driver still spends five years learning every route in London and how to get there the quickest. Can you image whilst being intimate with his wife, he is probably thinking about the fastest route from Kings Cross to Harrow. This could have catastrophic consequences. Why would he want to do that when Mr Sumsung can calculate this in 30 seconds.
I have forgotten the number of times I have been in a registered taxi where the driver could have been from Mars and had no idea where to go to the point that I had to show them. That’s not all. Some of the vehicles are old and once I was certain one the wheels was about to come off. And remember we are paying for this.
So how does Uber keep you safe? Well, due to the internet every vehicle is tracked so if anything goes wrong its get picked up. Uber will ensure that the driver does not take you round the block seven times (that happens in regulated taxis by the way). I have used it quite a bit in the last few months and I have never sat in a vehicle older than 5 years. It is always clean and I can have a pleasant discussion with the driver. There’s more. I grade the taxi driver and he grades me. So any hanky panky is a no no. Knowing this we will always be on our best behaviour otherwise he losses his licence with Uber and if I am graded poorly Uber cars can refuse to pick me up. And the best bit – it is much cheaper for me and my business. As a business if the service you get is what you want and the price is lower why on earth would you not accept it?
So why then I ask is everyone getting so upset. Yes is not fair that the regulated taxi driver has to change his ways and has paid lots of money. But that just means the system is wrong and we need to change the system. Let’s not stop progression for the sake of preserving old outdated practices.