SA taxis may be Uber’s next tar­get

The Star Late Edition - - BR - WES­LEY DIPHOKO 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

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.

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