THE STATE OF THE TAXI AND PHV
Dr Mike Galvin, of Mobility Services Limited, has critically analysed, in his own inimitable style, the sit- uation whereby Autocab has been acquired by Uber, and has gone further to consider just what the future may look like and, who the winners and losers will be.
RESPONDING TO THE LATEST DRAMA
When the history of the industry (personal transport – taxis and PH) is written, the events of early August (Autocab/Uber) will warrant a chapter of its own; not maybe for the reasons that are expressed in the various chat rooms, WhatsApp groups and growing number of webinars, but for the way it exposed some very core weaknesses in the industry, none of these is fatal if addressed, but if the industry continues to sit around like a boat with no engine bobbing about in a stormy sea then they could easily become so.
DEALING WITH THE ELEPHANT IN THE ROOM
I have set this section out in an interview style to deal with the questions I have been asked:
Is the purchase (or whatever the deal was) of Autocab by Uber fatal to the industry? In my view it is not. I say this confidently based on the evi- dence. There are many despatch companies in this industry; it is a healthy and functioning market and if you don’t like how your technology provider rolls then you have a choice: stay and enjoy, stay and moan or move. Alternatively if you like a provider personally, like a company’s tech, want to be part of their network (Igo, soft merger etc) or find someone cheaper and the price differential is sufficient you can choose to move. At the moment, a theme I will return to, there is choice and frankly lots of it. So if the despatch market persists – no, this deal is not fatal to the industry.
Was Autocab right to accept this deal? There seems to be a lot of words, energy and excitement expressed around this subject. All the old clichés are out there: ‘sold down the river, ‘Judas’, ‘took the silver’, ‘sleeping with the enemy’ etc etc. Well, let’s go back to basics: a CEO’s role is to create shareholder value – that is pretty much it. Now how that value is created opens up a whole world of options, ethics, strategies and approaches. I am not here as an apolo- gist for what Autocab and Uber have done but what I passionately believe is that everyone running their own busi- ness, however small, however big and with whatever potential, would do well to a) remember what their role actually is and b) to have their strategy in place to do so and not to be blown off course every week when the next crisis hits town.
‘every business is only one decision from disaster’ ‘forget charging for the system and give it away free’
Should I move, sue, or stay? Lawyers get rich dealing with angry people – forget suing! Don’t waste your money, any lawyer with a better house than yours will tell you that you have a good case – forget it. This is not a television programme, it is you running a cab company
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Next I would advise them to hoover up the rest of the despatch industry. I heard someone say that Uber could not buy their competitors (iCabbi, Cordic, Catalina, Cab Treasure et al) as the ‘monopolies’ people (I think they meant the Competition and
SEPTEMBER 2020
with a decision to make. Firstly never forget the maxim that every business is only one decision from disaster – a maxim that I frequently weigh against important business decisions. You need to think what is best for your business now, your business in the future and what your strategy is and how this helps/hinders it. Dodging the bullet? No! Different businesses with different strategies at different levels of development/maturity will have very different considerations. Competitors will play a role so you need to think carefully about what they will do. And ultimately what will Uber and the rest of the taxi/PH despatch system world do? Hopefully the rest of the article will assist your thinking and consideration of what you should do for your business, as that is what you are paid to do.
THE FUTURE REVEALED
Do I have all the answers or even all the questions? No! But dispassionately I have been thinking about what advice I would give to a number of organisations if asked:
If I advised Uber (I don’t) I’d advise them to make nice noises, calm everyone down and see what is left of the deal. If a significant chunk of customers started to leave I’d advise them to forget charging for the sys- tem and give it away free – after all this is rounding in the grand scheme of things. I might even advise them to give loy- alty bonuses – if you stay for two years it’s free plus you will get £xx’s. I’d advise that they do nothing very much until the dust settles, then I would try to tie operators in for the long term. Lock the doors and stop people leaving. None of this is very original and is frankly obvious. Uber like everyone else needs to work out what business they are in – if they have bought this business to do what they say and they are suc- cessful then they should be earning their income from millions of transactions and frankly not from puny despatch system charges from 400-600 companies.
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