Black Cab Drivers Vs Uber

Uber’s rapid global expansion has been a product of their deliberate strategy of being a market disruptive innovator, where their use of technology and the sharing economy has enabled them to outperform regulators and competitors (Dudley, Banister, & Schwanen, 2017). The rise of this platform-based ride-hailing app has resulted in implications for not only the traditional role of taxi drivers, but it has also changed business models, and employment patterns globally (Dudley, Banister, & Schwanen, 2017). 

The traditional Black Cab drivers’ business model has come under threat since the launch of ride sharing services, such as Uber, who have capitalised from their investments in both the digital and gig economy (Cramer & Krueger, 2016). The emergence of digital technologies has given rise to an economic revolution, in which workers have been able to transform themselves into micro-entrepreneurs (Tucker, 2019). Uber’s innovation of internet-based ride sharing services has taken advantage of this fact and treats their drivers as self-employed micro-entrepreneurs, providing unprecedented competition for not only Black Cab drivers, but the taxi industry as a whole (Cramer & Krueger, 2016; Tucker, 2019). Consequently, the current job role held by highly knowledgeable Black Cab drivers and their present business model is at risk of becoming obsolete in the not so distant future.

Part of Uber’s success is their use of digital technology where the initial bookings, the route, the calculation of fares, and payments are all made through their mobile app, providing consumers with a streamlined, hassle-free service (Dudley, Banister, & Schwanen, 2017). Their use of self-employed drivers means that supply can more accurately match demand, resulting in a more efficient, cost effective business model (Dudley, Banister, & Schwanen, 2017). Thus, allowing Uber to undercut fares charged by the likes of the Black Cabs, resulting in multiple protests from Black Cab drivers. Although Uber has been successful in London, they have suffered from adverse media reports and investigations from TFL. These events, combined with the development of a Black Cab’s app in response to Uber’s entry into the London market has left Uber struggling to compete (Dudley, Banister, & Schwanen, 2017). 

Although Uber has now lost their license in London due to problems with insurance and safety (Topham, 2019), Uber still represents a significant threat to traditional taxi firms, and similar competitors have now flooded the market such as Ola and Lyft. This begs the questions of how will Uber and other operators respond to increased competition in the taxi industry? And, how could digital innovations be expanded further?

So, what could the future of the taxi industry look like? The past few years have seen the likes of Google and Uber investing significantly in the race to introduce self-driving cars to our roads (Tussyadiah, Zach, & Wang, 2017). Advances in artificial technology combined with robotic technology have allowed for the development of autonomous vehicles, representing another major disruptive technological change for the taxi industry (Pettigrew, Fritschi, & Norman, 2018). This combination of technology allows the vehicle to process information to avoid delays from traffic or road accidents without requiring human aid (Tussyadiah, Zach, & Wang, 2017). Therefore, autonomous vehicles will be able to provide an efficient and safe service to consumers. 

This Mckinsey report provides a reputable overview of the future of mobility, highlighting the projected impacts of autonomous vehicles. Not only does the introduction of the autonomous vehicle represents a large technological disruption for the taxi industry, but it also signals a diminishing demand for professional drivers globally (Pettigre, Fritschi, & Norman, 2018; Tussyadiah, Zach, & Wang, 2017). Therefore, many would consider this movement towards autonomous vehicles to be dehumanising. However, speculation over just how safe these self-driving cars can be arose in 2018 after a fatal incident involving an Uber self-driving car (Lee, 2019). Therefore, there may be no imminent threat to traditional taxi drivers’ jobs as public confidence in autonomous vehicles may be slow to build.  

Not only will self-driving vehicles cause wide spread job loss, but they will disrupt our future mobility behaviour, and mark the end of mass private-car ownership in many towns across the world (Heineke, Kampshoff, Kellner, & Kloss, 2019). Other potential disadvantages of self-driving vehicles includes increased traffic due to an increase in overall travel as costs decline, as well as concerns over privacy and security (Pettigrew, Fritschi, & Norman, 2018). 

Regardless of the downsides to autonomous vehicles, the taxi industry is inevitably moving towards adopting this technology. Black Cab drivers may have to further innovate their business models to take advantage of digital technologies in order to remain competitive as autonomous vehicles slowly enter the taxi market. Although the uptake of self-driving taxis may be slow, unless a balance can be struck between these vehicles and traditional taxi drivers, severe widespread job loss appears to be inevitable as drivers’ knowledge will eventually become redundant. 

REFERENCE LIST

Cramer, J., & Krueger, A. (2016). Disruptive Chnage in the Taxi Business: The Case of Uber. National Bureau of Economic Research.

Dudley, G., Banister, D., & Schwanen, T. (2017). The rise of Uber and regulating the disruptive innovator. The political quarterly, 88(3), 492-499.

Flickr. (n.d.). Flickr. Retrieved February 2020, from Flickr.com: https://www.flickr.com/photos/altugkarakoc/48851184996/in/photolist-2hqP6mh-dYVCue-81Aeiw-2h72N1J-QMcDub-2hHMEFw-9cXN1S-9jfiGf-3pBUf6-2hXQ1jc-SWR2B7-zido4-3cvf7C-Lk4Jyf-23k4Nwx-A8zxAA-2gsDvHW-4Sg58V-3R8z6-jF6Dq-ddM4Tq-qco7Q5-nqi6xT-zYB9x4-esjTQq-TZAvEU-dz

Heineke, K., Kampshoff, P., Kellner, M., & Kloss, B. (2019, June). Change vehicles: How robo-taxis and shuttles will reinvent mobility. Retrieved February 2020, from McKinsey: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/change-vehicles-how-robo-taxis-and-shuttles-will-reinvent-mobility

Lee, D. (2019, November 20). Uber self-driving crash ‘mostly caused by human error’. Retrieved February 2020, from BBC News: https://www.bbc.co.uk/news/technology-50484172

McKinsey & Company. (n.d.). Autonomous Driving. Retrieved February 2020, from McKinsey & Company: https://www.mckinsey.com/features/mckinsey-center-for-future-mobility/overview/autonomous-driving

Pettigrew, S., Fritschi, L., & Norman, R. (2018). The Potential Implications of Autonomous Vehicles in and around the Workplace. International journal of environmental research and public health, 15(9), 1876.

Topham, G. (2019, Novemeber 25). Uber loses London licence after TfL finds drivers faked identity. Retrieved January 2020, from The Guardian: https://www.theguardian.com/technology/2019/nov/25/uber-loses-licence-london-tfl

Tucker, E. (2019). Uber and the unmaking and remaking of taxi capitalisms: technology, law and resistance in historical perspective. SSRN Electronic Journal, 357-383.

Tussyadiah, I., Zach, F., & Wang, J. (2017). Attitudes toward autonomous on demand mobility system: The case of the self-driving taxi. Information and communication technologies in tourism, 755-766.