13/09/2019 - 15:07

State services not safe from disruption

13/09/2019 - 15:07

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Digital disruption seems set to affect the government’s provision of transport services, and other offerings are also ripe for the picking.

Transperth services could face pressure from offerings such as UberPool.

Digital disruption seems set to affect the government’s provision of transport services, and other offerings are also ripe for the picking.

Most businesses have in some way been touched by the internet revolution, be it retailers whacked by innovators such as Amazon or hotels hit by Airbnb. 

Until now, government trading agencies have largely dodged the technology revolution, but that could be changing as disrupters broaden their attack on traditional sources of revenue for government.

One of the most interesting among these is UberPool, which could become a problem for bus and train services.

UberPool has flown beneath the radar since its mid-year launch in Perth, partly because it is officially in a six-month trial period, but also because its backers are keen to avoid becoming a target for critics such as advocates of government-controlled transport services and unionised labour.

But some commuters are discovering that this latest extension of the offerings from US-based Uber is a viable alternative to catching a government-owned bus or train, just as a conventional Uber can be better than a traditional taxi.

UberPool’s point of difference in the rideshare market is that it aggregates travellers heading in the same direction, with the fare split several ways.

Trips can take longer than a conventional Uber, but UberPool does have a significant advantage over buses and trains in that the drop-off point is generally quite close to where the traveller wants to go, or even directly outside the requested address.

Cost can be equally interesting with an UberPool car delivering three travellers inside zone two of the fare calculating system of the state government’s transport service, Transperth, being remarkably competitive (zone two stretches north to Greenwood and south to Jandakot).

UberPool is not available throughout the metropolitan area yet, but if it succeeds, as most other Uber services have, then it’s possible the pooled version could spread to cover most of Perth’s bus and train routes.

While UberPool will be interesting to watch, it will be even more interesting to see what other services might face pressure from developing technologies that either directly threaten existing government trading agencies or force those agencies to adopt modern business practices.

Gambling, another business that was once a government monopoly, is in the process of passing to the private sector with the dominance of the Crown casino, the impending sale of the TAB, and the spread of international forms of lotto over the internet, not to mention online poker.

Other one-time government monopolies such as gas and electricity have already passed largely to the private sector, and water continues to be a topic of debate.

Defence of the water monopoly by civil servants is largely an emotional argument on the grounds it is an essential service that needs the control and guiding hand of government to ensure reliability, quality and delivery to everyone no matter what their income.

All of those issues can be managed to ensure that no-one ever has to beg for water but the government solution, so far, is to tighten supplies with restrictions as a means of managing demand, rather than looking for a supply solution that would involve increasing the amount of water available.

Another area ripe for a technology overhaul is the licensing and approvals processes at state and local government levels, where the lion’s share of assessment is via box ticking with an army of civil servants checking that every box is ticked before a licence for building or car registration is issued.

An alternative is to free-up the process with a quick issuing system followed by an enforcement process to ensure that rules are not bent or broken in the same way the stock exchange operates with its reporting system, with penalties for fibbers and crooks.

The lessons learned from opening up gas and electricity to free market competition and the latest attack on government services by UberPool should be ringing a warning bell in government that the technology revolution, which has forced wholesale changes in the private sector, is starting to blow up a storm in the way government works.

Bell to toll?

The infamous Bell Group litigation will next year mark its 25th anniversary, if it isn’t settled before then, which is what some well-sourced Perth professionals believe is close to happening.

A determined push to finalise the $1.7 billion dispute triggered in 1995 after the collapse of the Alan Bond-led Bell Group was launched last year by the state government, after its Insurance Commission of Western Australia spent an estimated $250 million on legal advice.

All sides now seem to be prepared for a deal, under which the state could collect an overdue windfall measured in the hundreds of millions of dollars – a welcome payment to offset a fall in iron ore royalties.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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