If the taxi industry had innovated when it had the chance, it wouldn’t be shaking in its boots over Uber.
If you haven’t heard of Uber yet, you soon will. This technology-based ride-sharing company enables people who need transportation to open an app on their smartphones, input their location and destination, and then wait just a few minutes for a private car to pick them up and take them straight where they’re going. At the end of the ride, the cost of the service is automatically charged to their credit card, which is stored in Uber’s system.
Uber and other similar ride-sharing companies such as Lyft and Sidecar have become popular among young urbanites and are darlings of the press and venture capitalists. The 4-year-old Uber made a huge splash earlier this year when it was valued by new investors at more than $18 billion.
I rode with an Uber customer while traveling in Philadelphia earlier this year, and I loved it. I loved it so much, in fact, that I downloaded the app to my own phone. In the future, I will use Uber over a traditional taxi service whenever I have the chance.
This, of course, is why the taxi industry is so terrified of Uber and its ilk. Since most Uber drivers are private contractors working outside the heavily regulated taxi system, a growth of Uber customers will mean a loss of revenue for cab companies. I don’t think it’s an exaggeration to say that ride-sharing services represent an existential threat to the taxi industry as we know it.
The irony of this situation is that both Uber and taxis offer the same basic product: a ride across town. The small conveniences that Uber adds to the experience — on-demand service, smartphone car-calling and automatic payment — could easily have been integrated into the existing taxi fleet years ago. If cab companies had recognized the potential that new technology held, and embraced it early on, there would have been no demand for companies like Uber.
The problem is that in many industries, incumbent leaders are more interested in preserving the status quo than trying new things, and they aren’t interested in investing in new ideas when old ones are still paying well.
And perhaps more importantly, innovation is really, really hard.
Nick Calderazzo, president of Twin Travel Concepts, illustrated this idea perfectly when we spoke recently. Calderazzo is a member of Travel Alliance Partners (TAP) and is the chair of the organization’s SpecTAPular committee, which organizes exciting, inventive and high-profile special events for tour customers (see the story “Grand Affair” on page 50).
“I’ve been working on two different events myself, but I don’t know if they’re going to come through,” he said. “It’s tough to get commitments and prices so far in advance, and tough when you really want to make it special. Getting everyone on board is a lot of work. When I started working on it and asking people to think about things, I could tell that the momentum got lost real quick.”
Calderazzo and his TAP partners have signed themselves up for a lot of work by committing to producing high-impact events with new ideas and experiences every year. But in the end, the innovators always win.
So here’s my question for the entire tourism industry: Are we innovating quickly enough? Or, will we still be driving taxis when our customers are using Uber?