INDUSTRY AS SEEN BY MIKE GALVIN


Markets Authority (CMA)) would stop it happening………er, I don’t think so. Were the CMA not the people who came out quite astonishingly in favour of Uber (Competition Chief Attacks TfL’s Plans to Curb Uber)? Don’t expect much help there. Also isn’t iCabbi an Irish (soon to be ‘offshore’) company and aren’t we leaving/left the EU (remember Brexit)? So the CMA has little impact there – if you are in any doubt look at the multi nationals and where they are domiciled and see what the CMA impact on any of them is. In fairness to the CMA they see their role as protecting the consumer – a free system doesn’t really sound like a misuse of a monopoly, does it? Neither do quick cabs! Neither do cheap/free cabs! In any event if you want to build your own system you can; this is not a utility com- pany in a monopoly situation threatening to cut you off, it is technology and there is lots of it and there is nothing stopping you from going elsewhere or doing it yourself or with others.


‘increase commissions to a point where operators can survive but only just’


I would then tell them to gradually dominate individual cities and towns. I would advise them to cut fares to free if neces- sary to either get operators to change to them or send them bust. I would advise them to engineer fares to give drivers on their system bigger earnings, a bigger share of the fare and once they had the supply side in their hands (i.e. connected to their system), jack up prices, carefully and slowly but inevitably increase commissions to a point where operators can survive… but only just. I would also advise them to identify other areas of the value chain that they could take over and remove from operators and drivers – e.g. vehicle insurance, free/cheap cars, credit card handling, accounts, driver benefit packages, and offer them free to take the market. The out- come, if they followed my advice and were really successful and as economists say ‘all things being equal’, they would take 100 per cent of your customers and sell them to you for a hefty commission. Your role would be the mucky end of the business recruiting drivers and placating local licensing authorities. Your exit (if you planned one and if you didn’t you should have some kind of plan e.g. pass it onto the kids or sim- ilar) is smashed to bits as you have no customers, and probably before long even drivers are a mere formulaic man- agement function as they have to work for you.


‘…ever heard of deregulation’


But, you might say, all things are never equal and new com- petitors will spring up offering despatch software but without Uber’s might but…. You might say that to unshackle myself I might decide to pay for software. Perhaps - but what if Google, Apple and others decide………we can do that? What if the big players (they will come) enter the market offering free systems and put untold pressure on Government to get rid of archaic rules (aka public safety) and enable direct to driver despatch – bye bye operators? Can’t happen? Have you ever heard of deregulation? Speak to operators in Holland, Sweden, Ireland and anywhere else that has deregulated – it didn’t sound much fun to me. Don’t rely on legislation to keep you in business – politicians are fickle and London is a prime example of that; even without legislation the London market was roast- ed through political influence/interference – it started like most mistakes with good intentions (we want London to be


SEPTEMBER 2020


They often work very hard their whole lives without realising their worth and the worth of their businesses. In the process they are often engaged in huge personal and financial risk. Gut feel decision making and getting through another day is seen as an achievement and a mark of success. Now if you have eighty or a hundred drivers and you and your wife or husband run the business with a few staff, you are not going to spend days every week developing a formal strategic plan, but maybe now and again you should take time out and look at where you are, where you want to get to and how you are going to get there - aka strategy. Likewise while you are doing that, just list down the top three/five/ten things that stop you doing it and then fix/mitigate them. That’s how small busi- nesses get bigger. Bigger businesses should be doing this formally already. The successful ones will certainly be doing it.


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the start-up capital of Europe) and ended with cab companies struggling for survival.


Now you don’t need to be a Doctor of Business Administration to dream the above up. It’s all fairly obvious BUT it does rely on everyone in the industry rolling over, running around like headless chickens whilst strategic big business eats their lunch, dinner and tea, and the industry continues to have no credible plan to enable self-determination. In fairness I don’t advise Uber and they may take advice elsewhere that won’t give them the above outcomes.


SYSTEMIC WEAKNESSES CAN BE ADDRESSED


So what are the systemic weaknesses in this industry that cause its participants to scrabble around for solutions to what are everyday business challenges and problems?


‘the industry is fiercely independent enabling agility, it is fragmented which makes it a harder target’


Before I answer that question could I spend a little time on our industry’s systemic strengths? This industry has been hit with a maelstrom of challenges over the years and has not only sur- vived but thrived. The recent hit, Covid 19, has probably been the worst, but even so look at the innovation, entrepreneur- ship and grit that has seen most companies come through. Some are even doing better now than before Covid. The struc- ture of the industry is fiercely independent enabling agility; it is fragmented which makes it a harder target (or had until now); and it is low margin, low cost and requires significant skills to manage a self-employed and very mobile workforce. Outside of London the disparate and often idiosyncratic nature of licensing is an effective barrier to entry as Uber and others have seen – it doesn’t scale easily. These are real strengths within the environment that we frequently operate.


So what are the systemic weaknesses? To answer this I think I need to talk at two levels here – the micro and the macro. Tak- ing the micro first: individual businesses in the industry often do not see their value. Without being patronising, it’s a lifestyle, it’s a dream come true, it pays a decent income and it’s mine! That’s fine, but the people running these businesses have immense and broad skills but don’t often realise that.


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