Uber is disrupting – some might say destroying – the “traditional” taxi cab industry. I’m pretty sure everyone except the traditional taxi cab industry thinks that is a good thing. This particular case of disruption is an incredible example of how a new way of doing something using technology can be just as valuable as a new “revolutionary” product. The short version of this article is immediately directed at the taxi drivers and taxi dispatchers: “Technology WILL replace you.”
Uber doesn’t make a product that consumers buy. They provide the exact same service that a traditional taxi cab service provides. But Uber does it differently and, most would argue, better. Uber doesn’t drive taxis. Instead, Uber has replaced hundreds of taxi dispatch offices with a cloud-based software system. You still have to request a car, just like calling a cab. You still have to pay for the ride. You still have to wait at least a couple of minutes. A person driving a car still comes to your location to pick you up and deliver you to your destination. All that is the same.
What’s different is how you request the car, how the driver finds you, how you pay for the service, how much the service costs, and the massive data exhaust that Uber is creating by measuring every aspect of what I just wrote. And that you can’t just “hail” and Uber car, though many people would call that an improvement as well because you can “hail” an Uber car before you leave and there’s a good chance it’ll be outside when you reach the curb, assuming you live in a place where you can regularly hail a cab.
So what’s all this got to do with technology replacing you? Like I said above, Uber has created a cloud-based software system (aka “a technology”) that completely replaces and is replacing hundreds of local taxi dispatch services. So the office jobs of taxi services are absolutely being replaced by technology. Uber’s computer can do what a human taxi dispatcher can do and do it much, much better for far less money. But what about the drivers? Read this article, in which Uber’s CEO and cofounder Travis Kalanick says that they are creating 50,000 jobs per month.
Uber CEO says company is creating 50k jobs a month and is not interested in acquiring Lyft – http://t.co/iKFFXxrH2s
— Everett Steele (@everett_steele) September 9, 2014
FIFTY THOUSAND JOBS PER MONTH! Does that mean that 50,000 people are losing their jobs each month? If you answered yes to that question, you didn’t study economics, or at least didn’t pay attention during class. First, it’s not a zero-sum game, meaning new jobs created do not mean an equal amount of jobs lost. There are still plenty of taxi drivers out there making the same money they made last year and the year before. Second, how many people work at Uber? More than 1,000 people since it’s inception less than 5 years ago.
So who is technology replacing? Right now, the dispatchers, because, as I mentioned above, Uber’s software system can do that job better, faster, cheaper, and – most importantly – measured. Do you think your local cab company knows the average wait time for all their customers? Do they know the average distance a cabbie has to drive to get to their pickup? Do they know the average distance of a cab ride? Do they know how much each cabbie makes in tips? And here’s the kicker: does the average cab company know the name, address, phone number, email address, and credit card company of every single one of their customers? So, you see what Uber did here, right?
Uber replaces the taxi cab dispatch offices. All of them.
Here’s where Economics 102 kicks in. Know anyone who drives for Uber? They use their own car. Uber sends them an iPhone. Yes, that’s 50,000 iPhones a month sent out to Uber drivers. Those drivers are now putting far more mileage on their cars than they used to. Each one of these things creates more jobs, in addition to the incredible demand for Uber drivers.
So taxi dispatch workers are being systematically replaced by technology because it’s more efficient. Those individuals will have to adjust their vocational skills very soon. The next adjustment will need to be by the cab drivers themselves. Maybe they’ll consider becoming an Uber driver during their time off?
Or maybe they’ll be a Lyft driver. Lyft is only operating in 70 cities, as compared to Uber in 90 cities.