Disruptive technologies are scary. Uber is one of the scariest, in Australia anyway, because many people have invested 6-figure sums in taxi licences on the assumption that their value can only go up. Airbnb is another one. People have invested millions in hotels, meeting all the health, safety, traffic management and other government requirements, only to find that anyone with a spare room is a potential competitor.
My view is simple. In the long run the most efficient way of doing something will always displace the other ways. Vested interests will howl in pain and rage, and for a while they will hold back the incoming tide. But eventually, as King Canute found out, they will have to yield.
I remember attending a conference 20+ years ago at which the late James Strong, then CEO of Qantas, argued for a lifting of the ban on Qantas carrying passengers between Australian airports. The purpose of the ban was to protect the Ansett/TAA duopoly of domestic routes, and it meant that Qantas was flying half-empty ’planes around. It couldn’t go on forever and it didn’t. Economic and commercial rationality prevailed – as it must in the taxi and accommodation sectors.
Instead of emulating King Canute, governments should:
- Create sensible regulatory frameworks for the new technologies, to ensure public safety and payment of taxes.
- Review the rules and taxes that make it hard for established businesses to compete on equal terms with the disruptors.
- Ease the pain for the people whose lives and businesses are unexpectedly disrupted, eg by buying back taxi licences.