Uber and Cabify are just the messengers…

Enrique Dans
Apr 6, 2017 · 3 min read

The obsession of taxi drivers with companies like Uber or Cabify is something that increasingly draws my attention. Needless to say, what usually triggers most people’s reactions is what is going on in their immediate environment.

In this context, it is relatively easy to understand how taxi drivers are angry when the license they paid a fortune for because it was a way to exploit a resource, transporting people virtually exclusively, now faces a competitor that has come out of nowhere with none of the obligations they have spent a lifetime putting up with.

It’s hard for taxi drivers to see how a service previously considered a luxury becomes increasingly accesible to more and more people, and available to anyone with a smartphone and an app. Now, they see a number of Uber or Cabify cars every day legally waiting in what previously were “taxi sanctuaries” like train stations or airports.

But what taxi drivers have to understand is that companies like Uber or Cabify are not the enemy. Let’s just revise a few recent news: Mercedes has just announced that it will have completely autonomous taxis on the roads within three years, meeting the deadline some of us have been postulating for some time. This will presumably lead to companies like Ford and BMW, which expect to be able to do the same a year later, in 2021, as well as GM with Waymo, who are talking about the same year. Uber, meanwhile, has been driving passengers in cities such as Pittsburgh, San Francisco and Tempe in Fords and Volvos since last September, although they are not yet fully autonomous (in fact, they still need quite a few driver interventions), and has signed an agreement with Daimler for it to operate its vehicles through the Uber platform as soon as they are available. And a few other newcomers seem to be headed in the same direction.

The small town of Innisfil, in Ontario, has made an even more drastic decision: it has shut down its public transport system bus system and has hired Uber for a flat rate of about $75,000 annually, a cost significantly lower than that of operating buses, and will instead offer its 30,000 residents Uber Pool. And as soon as that service gets to be operated autonomously, its costs will diminish yet further. Could that become a trend for small cities?

So the problem facing taxi drivers is not Uber or Cabify. The problem is that within three years, we will begin to see self-driving taxis that are significantly cheaper because they will eliminate the cost of the driver and will also be perceived as safer because, although taxis are not involved in accidents often, such incidents will be reduced even further when those vehicles are bristling with sensors, cameras and radars, can see 360º, have perfect reflexes, are not distracted, do not suffer from road rage and have no mood swings.

Taxi drivers are not going to be put out of business by law, but because we will start to see autonomous vehicles more and more in environments where there is a profit to be made. Since the main benefit of these vehicles is obtained when they are in permanent operation, it is possible that this change over will take a little longer in very small towns where taxis are still parked up much of the time. But in the cities they have about three years. Anybody who still sees this as a science fiction scenario needs to wake up and smell the diesel. Uber and Cabify are not the problem. In fact, their drivers will soon be joining the ranks of the unemployed as well.
Think about it: three years. Time to act.

(En español, aquí)

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

Enrique Dans

Written by

Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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