SA taxis may be the next target for Uber |
A WELL-KNOWN venture capitalist and technologist once said, “Software is eating the world”.
What he simply meant was that more and more major businesses and industries were being run on software and delivered as online services – from movies to agriculture to national defence.
Now software is getting ready to eat the major South African public transport industry – minibus taxis – in the form of Uber Bus.
This week Uber, the world’s leading tech transport company, launched a minibus taxi service in Egypt.
It’s a move that should serve as a concern to the local taxi industry, and here’s why.
First, Uber has studied how the minibus industry operates and has realised that there’s money to be made within the industry.
Second, the transport technology company has a clear view of what the future of public transport looks like. Third, Uber has done it before (to cabs) and it has got the confidence to tackle the next mode of transport.
Uber claimed in its announcement that the service would enable the user to request a ride through the app and it would find other passengers travelling in the same direction so that the user can get to the destination with fewer stops.
Unending story is a major frustration for current traditional minibus taxi users.
Uber also claims that because you will be sharing your ride with other passengers, the fare will be affordable enough for everyday use.
While minibus taxi fares are affordable for many of their users they are constantly going up as owners try 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 fares in comparison with traditional minibus taxis.
The entry of Uber in this industry will be a gamer-changer.
Uber has not said anything about launching the service in the South African market yet, however, the potential is huge.
While many would welcome another player in the minibus taxi industry, the local industry would resist this.
Uber has not been welcomed by the South African taxi cab industry and the same might occur with the minibus taxi industry.
Uber is here to stay even if the local industry doesn’t like it and tries to resist.
The local taxi industry will need to innovate and embrace technology as quickly as possible.
The local technology eco-system should help support the local minibus taxi industry 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 Department of Transport should be pro-active about the potential of such a development.
It should create an environment that welcomes competition, while enabling local solutions.
In the end, this will lead to a better transport service for local transport users.
In 2011 Marc Andresseen warned that software was eating the world, so far it has eaten a number of industries. The local 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.
Wesley Diphoko is the Editor-In-Chief of The Infonomist. He previously worked with a local transport technology start-up. Follow him on Twitter via: @ WesleyDiphoko