Uber may be coming for SA Taxis
A well known venture capitalist and technologist once said “ Software is eating the world”. What he simply meant is that more and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense.
Now software is getting ready to eat the major SA public transport industry, minibus taxis, in the form of Uber Bus. This week Uber, the worlds leading tech transport company, chose to launch a minibus taxi service within the African continent in Egypt. This is the first for Uber in the world. It’s a move that should serve as a concern the local taxi industry, here’s why.
Future of Minibus Taxis
Firstly,Uber has studied how the minibus industry operates and they have realised that there’s money to be made within the industry. Secondly,the transport technology company has a clear view of what the future of public transport looks like. Thirdly, Uber has done it before (to cabs) and they’ve got the confidence to tackle the next mode of transport. Uber claimed in its announcement of the service that the service will enable the user to request a ride through the app and they will find other passengers traveling in the same direction so that the user can get to the destination with fewer stops. Unending stops are a major frustration for current traditional minibus taxi users.
Uber also claims that because you will be sharing your ride with other Uber passengers, the price will be affordable enough for everyday use. Whilst minibus taxi prices are affordable for many of its users they are constantly going up as minibus taxi owners are trying to cover their operational costs. Uber as a global company has an advantage of economies of scale which can enable it to charge more affordable prices in comparison with traditional minibus taxis.The entry of Uber in this industry will be a gamer changer.
Local transport tech, the only defence
Uber has not said anything about launching the service in the South African market yet, however the potential is huge.Whilst many would welcome another player in the South African minibus taxi industry the local industry may not be happy about such move. Uber has not been welcomed by the SA taxi cab industry and the same may occur with the minibus taxi industry. What should be the reaction of the local minibus taxi industry?
There’s little that the local taxi industry can do to stop the entry of Uber Bus into South Africa. No amount of threats will stop Uber from pursuing their dream of controlling and shaping the worlds public transport. There’s only one option for the local taxi industry and that is innovation. The local taxi industry should embrace technology. The local technology eco-system should support the local minibus taxi industry in this regard to avoid losing this lucrative market to a foreign based technology entity. The South African transport technology should be built locally in order to contribute to the growth of the local economy. The South African government in the form of the National Transport department should be pro-active about the potential of such development. It should create an environment that welcomes competition whilst enablling the existence of local solutions. In the end, this will lead to a better transport service for local transport users.
In 2011 Marc Andresseen warned that software is eating the world, so far it has eaten a number of industries. The SA taxi industry may be next if nothing is done to save it.
The South African taxi industry needs to up its game fast if it wants to remain competitive in a fast-changing competitive world.