Times flies, and things are changing fast. Old models are not working – the alternatives industry has been hammered with bad press and hit with a slowdown in capital raising. New models (machine-learning, automation, etc.) are coming in thick and fast.
Because of technology, there is disruption. And it will happen over and over again.
Disruption familiar to all
For the longest time, taxi companies have had little disruption. Now, private car-hire services compete with taxi companies in cities all over the world. Uber has become a synonym for “taxi”. Southeast Asia and China have seen their own versions of Uber in the form of Grab and Didi Chuxing respectively.
On the surface, Uber’s great because you can call for a car-hire anywhere you are, right on your smartphone. It’s supposed to be cheaper too.
But how does Uber really disrupt the industry? It makes uses of real-time, user-driven data. It grabs information from users (both passengers and drivers) to analyze travel patterns, and adjusts its pricing plans instantaneously to match supply and demand. If more people need a ride, and there are too few cars on the road, fares go up. If there are too many cars and too few people looking for one, fares go down. When fares go down, some drivers call it a night, and fares creep back up.
Everywhere that there is Uber, there is disruption. Some have not taken too kindly – London, Sydney, Jakarta, and Paris saw taxi drivers staging protests. These taxi drivers wanted to protect their existing way of doing business.
There are two ways to respond to disruptive change:
1. Close yourself off and prevent people from using new technology.
- Say NO to everything new and impose restrictions.
- Protect the “old ways” and force everyone to stick to them.
- “You must do things the way you have always done it”.
2. The other approach: Embrace change.
- Let it happen.
- You can’t stop it but you can adapt to it.
- Respect tradition but welcome disruption, because it enables you the chance to compete on a different front, rather than to be dragged along by the coattails of others.
The first option always seems appealing at first, because you stay within your comfort zone, and hold on to tactics that you’re most familiar with. But over time, these old models get even older, and you get left behind.
Always be on the lookout for disruption so that you’re ready to pivot.
Disruption will happen over and over again. For taxi companies and private car-hire services, a new wave of disruption is already about to arrive in the form of the world’s first driverless taxis.
No way, you say? The first driverless taxi has already hit the streets of Singapore.
By Alan Chu