Cape Town - Taxi service Uber, which this week secured its first operating licences in the city, is a “poster child for digital innovation” that can not be be ignored.
This is according to Valter Adao, digital and innovation leader for Deloitte Africa, who said Uber was gaining market share by offering a superior product.
“They (Uber) have gone from nothing to a company with a $42 billion (R520bn) valuation in five years.
“Even more remarkable is the fact that they have disrupted the taxi industry – an industry, that had an intense need for equipment and infrastructure.”
Adao said Uber had done this by offering a superior commuting service through its smartphone app, that links a consumer to a fleet of drivers.
This week the Provincial Regulatory Entity, which issues licences to taxis, granted 145 metered-taxis vehicle-operating permits to Uber partner-drivers, ending weeks of speculation about whether the service would receive a legal green light in the city.
Adao said the taxi service’s mix of convenience, predictability and better pricing had left many metered taxi companies in its wake.
“You never know if the taxi driver is charging you the right amount,” he said.
“In fact, in many cities worldwide the experience of taking a taxi is not very good.
“It is critical as a consumer that I know what I’m going to pay upfront and I get that with Uber.
“The taxi driver knows he has to get a good rating from me, so he treats me well.”
The last line of defence by traditional metered taxi operations against the growth of Uber would be an appeal to the government for more regulation, to stop Uber gaining market share.
He argued that rather than trying to keep Uber off the streets, governments should recognise that drivers providing a service enabled by the Uber app were “micro entrepreneurs”.
“You are encouraging entrepreneurship in your society, which is exactly what we need.”
He said attempts to frustrate Uber’s entrance into the taxi market were likely to end in failure.
“You can’t stop these things. Uber is symbolic of a wave of disruption.”
However, this view is not shared by Cape Town’s metered taxi owners who say Uber’s entrance into the market will reduce profits for everyone.
“I can see our taxis becoming obsolete if they (Uber) continue to operate,” said Intercab owner Faiek Abarder.
Trade Union federation Cosatu has also criticised the ride-sharing service, saying it would “undermine established business practices”.
But for Adao the “fuss” over Uber’s entrance into the local market would be largely forgotten in five years time.
People “would likely look back at this speedbump with curiosity”.
Weekend Argus