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Why Black Cabs Need To Innovate, Not Fight

London Taxi's fight with Uber is a fight that they cannot win

29Jan

When we look at some of the most successful companies and industries of the last decade, there is always one aspect that appears; creating or reacting to disruption.

We have seen how companies like Airbnb have totally changed the way that people book holiday accommodation, how Amazon have allowed people to buy almost anything they want without needing to search through shops and how Spotify have made the idea of going to a shop or even buying music online a thing of the past. There are other companies who have adapted to this model, with banks offering financial services on the fly through new applications, hotels who use data to target people with the best deals for them or even DVD rental companies becoming film streaming behemoths.

However, there are industries who are not keeping up with the times. Industries who are fighting back and trying to maintain the status quo, claiming that other companies having an unfair advantage or acting deceitfully is the key reason why they are losing market share.

Chief amongst these are black cabs in London.

Black cabs are undoubtedly one of London's most recognizable symbols, unique throughout the world and famous for their relatively bulbous shapes and large windows. However, they are also antiquated in their approach to business.

Since Uber was launched in London in mid 2012, the app has had unprecedented success, creating a new economy of flexibility for everybody from the drivers looking to earn some extra money and users, who want to pay less and have a far more convenient service. Because of this the black cabs in London have been declining, with the number of people taking 'The Knowledge' test (required for all new black cab drivers) falling from 3,326 before Uber to 2,159 in 2014. The Knowledge requires drivers to learn 320 routes, 25,000 streets and 20,000 landmarks around London, meaning that they can quickly and easily take people from one place to another.

To become an Uber driver on the other hand, requires a fairly decent car, a driving license, a phone and a sat nav. From there drivers can drive flexible hours, with many using it as a bit of extra money on top of a regular job, one driver I spoke to said that he worked with Uber because he spent most of the time caring for his sick brother and Uber gave him the flexibility to earn on the side.

From a customer perspective, using an Uber is also considerably easier than a black cab. For instance, until November 2015, you needed to either find a cab with a card reader (surprisingly rare in London) or make sure you had cash to pay for a black cab. With Uber, all you needed was your phone and a paypal account. The costs of an Uber are also considerably less than traditional black cabs, which is the primary reason why companies like Hailo (who tried to create an Uber-like app for black cabs)have fallen behind the market leaders.

All of these elements considered, it is no surprise that Uber has begun to dominate the London transport landscape, however, whereas a smart move would be to emulate and improve on the Uber model, the Licensed Taxi Drivers Association (LTDA) is alienating people agains their cause through lobbying to bring back the status quo. This has included potentially making Uber drivers wait for five minutes after picking up a passenger, protests to block streets and most recently trying to get them shut down for tax reasons.

The main problem with this is simply that people like using Uber, so even if the LTDA does succeed in stopping Uber operating in the English capital, going back to a more expensive, less practical option will annoy customers. Essentially, the only win that the LTDA could get from this situation is to learn from, and expand the Uber model, because fighting it is now not an option. It is a lesson that many companies should learn, don't fight change, embrace and improve it. 

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