23/04/2015 - 13:25

Uber simply does it better

23/04/2015 - 13:25

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I’ve been taken for a ride twice in the past month. And while that personal experience might be of little interest to anyone else, it does throw some light on Perth’s Uber versus taxi debate.

Uber simply does it better

I’ve been taken for a ride twice in the past month. And while that personal experience might be of little interest to anyone else, it does throw some light on Perth’s Uber versus taxi debate.

The first ride was in a conventional taxi, and to describe it as appalling probably understates the frustration of dealing with a driver who either didn’t know Perth roads or who deliberately took the long way to boost his fare.

The second ride was in an UberBlack car, which delivered an experience that was infinitely better in every way.

Before explaining in detail want went wrong with the taxi and what went right with Uber, there is an easy, one-word way, to describe the difference – service.

The challenge for the state government, which is under pressure to regulate the Uber business to placate an angry taxi industry, is to find a way that satisfies two very different business models.

The taxi industry as we know it is totally the creation of government regulation, a point best illustrated by the fact that taxi plates, which are the licence to operate a taxi, sell for hundreds of thousands of dollars.

There is absolutely no reason for such a high value being put on a piece of government paper, except for the way government has created a monopoly that only benefits a handful of people.

Plate owners have traditionally been the big winners. Government collects a fee for overseeing the industry and, allegedly, maintaining standards. Drivers get little, which is always the way for people in the front line.

Most customers also get little from the taxi regulation system, which, ironically, is almost identical to the way people are penalised by other forms government control over business – the most recent hot potato (forgive the pun) being the Potato Marketing Corporation.

Here lies the first, but not the biggest, challenge for government. How can it contemplate abolishing control over a food product while planning to introduce controls over a transport service?

The central argument against Uber by the taxi industry is that it is bad because it is not government regulated. That was the centrepiece of this week’s protest outside Parliament House.

But if the service being delivered today by the taxi industry is a result of government regulation, then the sooner it is abolished the better.

My taxi ride started at 8.30am in Victoria Park on my way to Cottesloe. Having driven around Perth for more than 40 years I know the way, so the first thing I told the driver was to not go through central Perth but instead head to South Perth and over the Narrows Bridge.

The driver thought he knew better, and before I could argue he was taking us over the Causeway, along Riverside Drive and around Betty’s Jetty (Elizabeth Quay), a process which at peak hour added at least 20 minutes to the trip and cost an extra $20.

Uber was the opposite of that fiasco. After placing an order online I got a reply that gave me the arrival time of the car, its number plate, the name of the driver and her rating by previous customers. I could track its trip to me on my iPhone and follow the trip to my destination via her GPS system.

I will remain an occasional taxi customer because sometimes it is easier to hail a cab in the street.

But I will also be a future Uber customer because the service is infinitely superior and totally customer focused.

There is only one way the taxi industry can resist the rise of Uber as a service and that’s to become more like Uber.

Continuing with an archaic, owner-focused business model that places little emphasis on customer service is a hopeless approach.

It would be equally hopeless for the government to think that it can regulate one form of industry while it deregulates another.

If I were a taxi driver watching my business shrink because of competition from Uber, I wouldn’t be protesting about competition.

I would be looking for a way to join the competition, because it has a winning business model that delivers what people want, not what government orders them to have.

 

Business News is hosting Uber's top Australian executive Simon Rossi on May 19 ... come and hear about Uber for yourself: http://www.businessnews.com.au/Success

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