Is The Taxi Industry Really Being Disrupted?

Eugene Suslo
May 26, 2015

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I walked out of the Las Vegas airport on a warm March afternoon to stand in line for my Taxi. I had been bombarded by every limo service driver on the way to the horrid Taxi line, which I began my 20 minute wait for a Taxi. Las Vegas is an interesting place when it comes to needing to get a Taxi, which certain hotels only work with certain Taxi companies, the Taxi lobby runs the city and the state of Nevada, and a Taxi Driver waits in line at the airport for over an hour to pick up passengers. I made it up to get in my Taxi and the driver, having waited over an hour, was the lucky winner of the shortest possible ride in Vegas. This was not the jackpot at the craps table, but the Hard Rock Hotel. This is the closest hotel to the airport and the driver explained his frustration, and I understood. The Las Vegas Taxis are over regulated, and as behind the times as any city I have hailed a cab in. I was requested to pay with cash, which I rarely carry, and when I asked if I could pay with a credit card, the signs of dissatisfaction were apparent. This made my experience not so pleasant, which I would have much rather paid with a mobile to mobile payment that emailed a receipt. This would have been easy, fast, and we could both get on with our lives.

I find this experience interesting in that when most cities are trying to embrace Taxi Technology and compete, a popular place like Las Vegas is ignoring it. I would think that this is a prime place to show consumers, who are undoubtedly forced to take a Taxi at some point during their stay, that Taxis would embrace technology and try to move the industry forward. But maybe Las Vegas knows something the rest of us don’t. As Taxis are looking to compete in a disruptive industry maybe Las Vegas is looking at the longer term future. I don’t think this is actually the case, but lets give them the benefit of the doubt and for the sake of this article, lets say they are.

Lets pretend that the Las Vegas Taxis have a crystal ball into the future and don’t believe that the current state of the Taxi industry is the real disruption worth fighting for. The real disruption may be a few years down the road and the current situation is just the preparation for that to happen. Customers are being trained to expect Taxis to operate with technology, mobile payment, and calling based on GPS location. This all puts in place a very nice infrastructure for self driving cars, which may be the real disruption.

Is The Taxi Industry Really Being Disrupted?

The Taxi industry is in full upheaval, and lets face it, it is a Taxi war. But I don’t think this is actually the biggest disruption the industry is going to face and wouldn’t really consider this the end game. The current “disruption” is really one company identifying a market niche, which is causing an evolution in the way the industry operates. It is bringing technology to the game. This isn’t really the end of the story though. A disruption is more than adding technology to an already existing way of doing business. A disruption is the complete replacement of one technology for another. Lets take a look at a real disruption, which can be seen in the advent of the train.

Prior to the train, transport was done with horse and carriage. This is how people moved and how goods were moved. Societies were extremely isolated, seeing as any long trips risked disease and death. Then came the train, which allowed efficient movement of people and goods, as well as made the world a smaller place. Globalisation began with the train. Goods and people began to move cross country borders with relative ease. What happened to transport? For the most part horse and buggy went away and was no longer used for the practical transport of goods. This is not what is happening to Taxis. Taxis are not being replaced. The only thing that is occurring is that a new company is taking market share with an upgraded product. This is why the Taxi industry isn’t truly in a disruption. At least not yet.

What Is Real Disruption?

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The real disruption is going to be when self-driving cars are normal every day modes of transportation. This is going to not only change taxis, but the transport system as a whole. If we think futuristically, there will be self-driving cars for the transport of goods and humans. This will be the real disruption, because there will no longer be Taxi drivers, truck drivers, limo drivers, and the like. There will be operators who manage fleets of cars, and that will be a disruption. This will be a far reaching disruption with the Taxi industry not being the only ones effected. The car industry will be affected as well, seeing as less consumers will own cars, which having less cars on the road is a benefit. This situation is good for consumers and the environment, but those are both for a deeper discussion.

In looking at the current environment, we know that there is going to more market potential and changes in the near future, which is going to be great for business and entrepreneurs. We are only in the beginning stages of the changing landscape of transportation. This isn’t doom and gloom though, but really a very exciting time. Exciting to be in the transport industry, as well as put your current company on track to operate in the changing environment.

Immediate Taxi Technology

We can theorise about the future and talk about what it is going to be like, but there are actions that need to be taken today to make that possible. The only way to ensure that the future looks promising is to take care of items today which we have control over. This is making Taxi companies technologically up to date, connect to consumers through mobile devices, and get the regulatory environment ready for the future. Uber has done a great job in alerting the industry that this is what needs to be done, and even laid a blue print for doing so.  Mobile payment is on the rise, and the ability to incorporate Taxi Apps to your company is becoming easier than ever with a myriad of options.

Moving forward, establishing your market share in your local market and getting your company up date technologically is the first steps. At this point there is only one question. Are you going to take the steps necessary today to make tomorrow a reality?