The Transportation Wars

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somewhere along the way, someone comes and changes everything we know about something

It happens with people, companies, brands, products or services. But the biggest impact is when it happens with business models. When something really disruptive comes along and questions everything, that’s when things start to get interesting. I don’t know if Uber thought about how they were going to change the way we commute, go to a friends house, go to a movie theater or some bar. I guess they had no clue. Or maybe they did. Who knows?

Of course, these impacts don’t ocurr everywhere, at the same time, with the same importance or relevance. It differs from place to place. I don’t know how Uber is changing transportation in India, or Iceland. What I know is that where I live, things got a little messy, to say the least.

What happens when someone wants to take your cheese?

I guess that this was the sentiment of the Portuguese taxi industry when Uber started to “steal” their customers. Let me offer you the big picture. The Portuguese taxi industry is runned by two associations: Antral and Federação Portuguesa do Táxi (FPT). But to be honest, I never heard about the second. These guys were feeling pretty confortable with themselves until the “evil” Americans showed up and started rattling with, what used to be, a “perfect” market environment. The monopoly was compromised.

Until july 2014, if you were in Lisbon, Portugal, and wanted to go from point A to point B, you had a couple of alternatives other than taxis (I got to say that I’m not an anti taxi radical) that worked… well. sort of. Buses that never run on time and the subway that works pretty well (I’m not being ironic). Buses and subway are transportation services that, at least in Lisbon, work well and aren’t expensive. The obvious alternative to these more “rabble” suited options were cabs. There was only two problems with cabs: people don’t trust cab drivers. It’s true. you can take my skin off if you are a cab driver and feeling a bit mistreated right now. And cabs were, and still are, expensive. There’s also the speculation around prices that affects mostly turists, but it’s embarassing anyway. I’m not gonna dive into that.

So a perfectly natural thing happened. What happens when you stir a lion? you get eaten. The taxi industry wasn’t prepared for this, more “transparent”, way to do business. No transactions inside the cars? idiots. What about the cars always clean and smelling good, and the drivers nicely dressed, showing a big smile and asking if you’d like them to turn off the radio? Silly people. But the fact was, customers wanted that kind of treatment and attention. Customers wanted to feel safe. Customers wanted to feel that they were paying the right price for the suited service. And if you think seriously about this, customers are what really matters. Not the industry. It all comes down to what the customer wants, and the cabs just weren’t delivering. Uber was.

For every action, there is an equal and opposite reaction

Newton said it, and I agree. Ok, he might have said on a different context but you get the point. Antral and FPT acused Uber of operating without the proper licenses, fleeing taxes and inspections. Uber, on the other hand, said that they were legitimately working and paying taxes, like any normal Portuguese company, and didn’t understand the fuss. Riots began to happen next to the airport departures area, creating a malaise that poisened the air and shattered, the already cranky, reputation of the cabbies. Stir a lion?

So, the real problem, and this is purely my vision of things, was Uber’s business model. The war wasn’t about taxes or licenses. The war was against the way Uber saw the market, identified the flaws and needs of customers and went for it. The taxi industry just wasn’t ready for this. Admiting that they had been blind for so long, was admiting that they didn’t give a damn about customers. Only the profit.

For a company to innovate, it must create products and services that let consumers perform a job faster, better, more conveniently, and/or less expensively than before — Anthony W. Ulwick

Uber gave this to the customers and the market. And for that, Uber was crucified. Of course.

At the present time Uber is still forbidden to operate in Portugal. If you go to their webpage Uber Lisbon you get this message «A página a que pretende aceder encontra-se bloqueada na sequência do cumprimento de ordem judicial ou administrativa», meaning «The page you want to access is blocked as a result of compliance with judicial or administrative order». If I know the Portuguese law system, Uber won’t work (officially) for a long time. But not all is bad.

I think Uber gave the Portuguese customers a lot more than a just a disruptive service. They gave us the possibility of changing the market for good. I’m not saying that cabbies are all polite now, or that the speculation will stop, or even that the cab industry will catch up twenty years of evolution in one. No. I’m saying that the mindset is changing. And each time a service, product, company or brand is allowed to mess with the mindset, a silent revolution ocurrs.

Let me just give you a curious fact. Nowadays, cab companies in Portugal have an app that allows customers to ask for a taxi and pay inside the app. I haven’t used yet, but it’s cool. A couple of friends of mine said that it works fine, and the service is quite different than a “normal cab”. But isn’t that what Uber was offering? Yes. And that’s what’s so great about it.

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