ANALYSIS

New York Cabbies May Try Operating Uber-Style

Uber and Lyft are two new, rapidly growing competitors in the taxi and limousine space. They are upending the traditional taxi and limo model in city after city. Now the taxicab industry in New York City is fighting back. NYC cabs could be getting their own app.

This is something that should have happened years ago. If the traditional cab industry were innovative on its own, it would have come up with this idea years ago. However, it was happy to keep things just the way they were.

After all, why change if there is no competition to worry about? Why innovate if there’s nothing capable of taking away business? The cab industry was happy keeping things where they were — in the dark ages.

A Broken Industry

This is not just a taxi problem. This happens in every industry that does not have competition.

Decades ago, it happened with telephones when Ma Bell was the only provider. When competitors entered the phone space 25 years ago, Ma Bell grew up. Companies like AT&T and Verizon emerged to become some of the most innovative and customer-loved companies in the space.

Cable television is wrestling with its own problem area today. When consumers had no choice, cable TV could care less about whether we were happy or not. Today, that attitude is causing the industry to lose business to new competitors that advertise a softer, more customer-caring image. Customers don’t quite believe them yet, though.

Companies and industries can lead without caring about the customer only if they have no competition. If they do have competition, and if they still don’t care, then they lose. Period. Of course, they often try to improve once they recognize the competition, but it’s very tough.

So, Uber and Lyft are two innovative companies reinventing the taxi and limo space in city after city. They are rapidly growing, which says to me the traditional industry is broken and hasn’t innovated and taken care of its customers. It still does things the same way it has for decades.

An example of this broken industry is how riders are forced to stand outside trying to flag down a cab in the pouring rain, getting drenched in the process. If the traditional industry doesn’t care about improving the lives of riders, the competition will.

Companies like Uber and Lyft are winning market share, something that is starting to worry the traditional taxi and limo industry.

What’s Their Motivation?

Now the NYC taxicab industry wants to compete with Uber and Lyft in their territory — with an app. Will this app improve customer care and service in this tired old industry? Can it be successful?

Good question. This is an old industry, and just because political leadership has this new idea doesn’t mean the industry will go along.

A Manhattan lawmaker introduced new legislation a few days ago requiring the city to launch an e-hail app for yellow and green cabs in the city.

The most interesting question is a simple one: Is this an effort to improve service for customers, or is it more an effort to protect an old industry, putting newcomers like Uber and Lyft out of business?

This new app would let users call a cab in the city without having to stand on the curb on a rainy day and get drenched — just like Uber and Lyft users already can do.

The idea would require the Taxi and Limousine Commission, which is the regulatory body for this industry, to create the new app and compel taxicab drivers to use it.

When this sort of initiative comes from a government agency, it generally is not as good as when it springs from the free market — but at least it’s a start.

We’ll have to keep our eyes on this latest skirmish as the taxicab battle heats up.

E-Commerce Times columnist Jeff Kagan is a technologyindustry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at jeff@jeffKAGAN.com.

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