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Uber lessons in disruption

By Ken Phillips - posted Tuesday, 6 January 2015


During the Lindt cafe siege in Sydney in Dec­ember, much of the CBD was evacuated. Demand for Uber drivers skyrocketed, kicking in its automatic price surge. This infuriated many customers. The following day, Uber publicly apologised, contacted every customer, saying Uber was wrong, and refunded fares for anyone ­affected by the emergency.

The regulated taxi ­industry would be incapable of even admin­istering such refunds, let alone responding quickly.

Uber represents disruption at its most agile. It's existence scares the taxi cartels, developed under and because of taxi regulation. This is where uncomfortable politics is kicking in.

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Taxi regulation has been devel­oped to "protect" consumers and ensure service standards. But the regulations also protect Mr Big taxi cartels. Unsurprisingly, the cartels are fighting to protect their business models, pressing regulators to prosecute Uber drivers. Small taxi owners are the public fronts in their campaigning.

Politicians are being heavily lobbied. Allegedly, Uber is a big, bad business threatening small taxi owners. But Uber is truly smart.

It is spending a fortune in North America on lobbyists, putting Uber's position directly to politicians and regulators. Uber pays fines imposed on its drivers. But smartest of all is Uber's communication directly with its customers.

Where Uber is under regulator threat in a US state or Canadian province, it informs its local customer base of the threat, asking the customers to contact the regulator and politicians.

The result has been swarms of Uber customers pressing the Uber case with ­individual regulators as well as with politicians.

This is political disruption on a new scale. Uber is not just a new technology or service. It's a lobbying machine galvanising huge numbers of individuals. This disruptive power is not about "big business". It's the power of disruption that delivers benefits to individuals. If the Uber service did not satisfy the needs of its customers and drivers, it would have no ­influence and would die.

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For politicians this is massively confusing and difficult. Every poli­tician wants to be seen to be a lover of small business. Consequently, politicians want to be seen supporting small taxi cab owners. But Uber's activist support from customers and drivers counters this. If politicians aren't careful they look like "yesterday" people - political death!

This is disruption. Politicians who have built their power on the back of entrenched interests are vulnerable like never before. We, the disruption generation, have accommodated disruption in our personal lives and even welcome it. Adherence to expectations enforced by entrenched interests is not tolerated when something different delivers something better.

Disruption has become a new rule.

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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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