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Uber lessons in disruption

By Ken Phillips - posted Tuesday, 6 January 2015

Taxi alternative Uber is throwing all the rules about hiring a car with driver out the (taxi) window.

In turning the taxi industry upside down, Uber is causing political storms across North America. The controversy in Australia has only just begun.

It's just one example of our "disruption addiction".


Once, keeping everything the same made people feel comfortable. Now we've become the ­disruption generation, accommo­da­ting disruption in deeply personal ways.

There's hardly an extended family where partner separation is not somewhere in the mix. Same-sex relationships are standard. Relationships that come and go are no longer frowned on.

This acceptance of disruption in our personal lives displays ­itself in more hardnosed attitudes when we operate as consumers. We're unforgiving of businesses that don't respond instantly to our personal wants. "Disrupt your business" or die is our unspoken message.

Uber's response is disrupting the viability of the regulated taxi industry cartels. Uber connects consumers directly with the service provider, the owner-driver.

The drivers are self-employed. Unlike taxi drivers, Uber small-business drivers choose their jobs and the price they charge. Uber drivers aren't forced to accept fares. Consumers pick the driver they want at the price they are prepared to pay, displayed on the Uber mobile app. In contrast, the price for taxi services is decided by a Big Brother regulator.

It's pure free market. Uber doesn't provide transport services. It's a free-market facilitator, like a stockmarket for personal transport services with an array of checks and balances.


We consumers provide ratings on drivers displayed on the Uber app for others to see. "Sleazy", ­unpleasant drivers driving dirty vehicles are identified. People stop choosing them.

Uber drivers have potentially higher income security and better safety from abusive and fare evasive passengers. To be an Uber customer, you must register with Uber, giving personal and credit card details. ­Payment happens automatically. If you're obnox­ious or violent ­towards a driver, you're easily traced.

Uber's surge-pricing system means that in peak demand prices go up, sometimes dramatically. But higher prices attract more drivers providing faster service to customers who are prepared to pay. Sometimes this backfires on Uber, but they are quick learners.

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This article was first published in The Australian.

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About the Author

Ken Phillips is executive director of Independent Contractors of Australia.

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