Taxis vs. Uber: To Beat Them, Imitate Them

Flywheel

As I waited on a Berlin street corner this evening for a cab I wished UberX were available in Germany. It’s not. Black Car Uber is here but under legal attack.  I’m also told its pricing is not competitive with regular cabs and so it’s not widely used.

In several countries, including the US, cab companies are trying to block Uber (and similar companies) from operating. If not block they’re trying to contain or restrict their operations (i.e., not allowed at the airport). However that approach, at least in the US, is destined to fail.

The thing that will “save” the taxi industry is adopting Uber’s methods, including a mobile app and mobile payments. Not having to fumble with money or change — even a real-time credit card payment in the back of the cab — is the real benefit of Uber. You get in and get out and there’s no monetary exchange involved.

Notwithstanding the unethical competitive and recruitment practices of the company itself, Uber drivers are friendly and the cars are clean, unlike many cabs. But more than that, the convenience of the app and its payment system are the key variables that differentiate Uber from the less satisfactory traditional cab ride.

With Uber there’s also no need to deal with an abrupt or surly dispatcher or wonder if the cab will actually show up.

Similar apps for cab companies do already exist (e.g., Hailo, Flywheel). And the taxi industry either needs to get behind one or more of these or build apps itself to compete.

With sufficient inventory (cabs on the street) and a well-functioning app that incorporates payments cab companies could blunt or slow Uber’s rise. Too often however vested interests use the courts or lobby legislators to legally prevent a competitive challenge, which is almost always a bad approach.

You need to compete on the “disruptor’s” turf or be disrupted. In the case of Flywheel the company imitates the Uber value prop but implies that traditional cab drivers are more trustworthy than random citizens (Uber hasn’t quite established high levels of drive-trust yet). The following is a public transportation ad in San Francisco that I captured a week or so ago: “Hail a real taxi driver . . .”

Flywheel 2

This is one case where the response to a disruptor is very clear to me — cabs need to duplicate the user experience of Uber. There will be many who argue they cannot. But they must find a way to do so or their will find their businesses shrinking.

In most instances a “me too” experience won’t be sufficient. However in this specific case I think it would because cabs still “own the brand” and direct experience of Uber remains relatively low except in certain urban centers. That may not be true a year or two from now.

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