Disruptive technology and extinction of the yellow taxicab.

The yellow New York City taxi, an icon in NYC, is in a danger of extinction. I know it first hand – last week I was in New York and was tasked with getting a photo of yellow taxis in a row. Only a year ago, this shot would have been easy. Now, things have changed and yellow taxis are “pushed to the curb”.

Five years ago, Über came onto the scene, transforming the personal transportation industry. Über, by all measures, conducts business much better than cab companies do. Drivers and passengers have a superior experience: it’s cheaper, safer, newer, cleaner, and friendlier than most taxicabs.

How does Über work?

IT’S REALLY SIMPLE

Über operates through an app, allowing customers to see their fare estimate, the vehicle the driver is using, and their customer rating. Once you choose your ride you are greeted by a polite, friendly driver.

You can sit back and relax. You can play your music in the vehicle from the app, you are offered a bottle of water, and the vehicles are pristine. Drivers are rated after the trip, so they are much friendlier.

Once at your destination, you simply say “goodbye” to your new-best-friend and leave the vehicle. There are no credit card machines or looking for the change while other waiting cars honk at you.The fair is automatically charged through your app and you and the driver get to rate each other on the experience. No cash also means that the drivers are much safer in Über than in cab – so plexiglass dividers aren’t necessary.

How Über changed the game.

One measure that clearly demonstrates the impact of Über on the NYC cab industry, and other cities Über operates within, is the price of the operator license or “medallion”. In 2014, the NYC medallion went for $1,300,000! Today, they can be picked up for as low as $400,000. That is a difference of $900,000, or a 69% decrease. Why? Über drivers are not required to purchase a medallion.

Technology, such as Über, that is designed to change a specific industry is also referred to as “disruptive”. Disruptive technologies don’t play by the rules, but quite the opposite: their strength is in their ability to change the rules of the game. In the example of the cab industry, cab companies will need to adapt to the new way of doing things or they will slowly cease to exist. That is easier said than done. Cab companies have learned how to operate monopolies, protected by the municipal lawmakers, and now if they want to survive they will need to learn how to be an underdog.

Will you embrace disruptive technology?

Über is an example of disruptive technology that is revolutionizing, and even destroying the taxicab industry. Regardless of which side of the fence you are on, this issue is one we can learn from and decide for ourselves if we are going to be users or victims of disruptive technologies.

  1. James Rathwell 25/02/2016, 4:58:14 PM

    I recall when Netflix hit the scene to disrupt the movie rental business. Blockbuster scoffed at the concept, even going as far as saying “People won’t want to watch movies on their computers!” (Talk about not understanding your customers) Now their brick and mortar stores cease to exist. Not understanding shifts in business, can literally cost you billions.

    When we were in Orlando, earlier this year, we used Uber to get from our Disney Resort to Sea World and back. It was quick, clean, friendly, and slightly less expensive than taking a cab. What’s not to like?!? In fact, I’m heading to Toronto for a conference soon . I’ll be taking Uber to the hotel from the airport for sure.

    • Kathy Holliday 25/02/2016, 4:58:39 PM

      James,
      Uber just made their entrance into the Calgary market. Will be interesting to see what happens here at home.
      Stay tuned!

Tell us what you think.