This article orginally appeared in the Daily Telegraph.
We’ve all heard the saying: if you’re not part of the solution, you’re part of the problem. The idea is that, at one time or another in life, everyone has to make a choice: either stand up for positive change, or – through apathy or by opposition – be a part of holding it back. Rarely have I seen such a stark illustration of the wrong choice being taken than the response of Transport for London to the rise of Uber.
London is a city of hardworking, brilliant people and of thriving businesses, a place of which we should all be inordinately proud. But it comes with a big problem: years of worsening overcrowding and delays, and price rises, which mean that just getting around the place has become a nightmare for the people who live and work in the capital.
And yet one business is offering customers an innovative solution to part of that problem: a simpler, cheaper and more convenient way to get around. No one is forced to take Uber (or Hailo, or Gett for that matter); it merely empowers customers who make a rational choice between this service and the other available options. In the best case scenario, it also forces those responsible for the alternatives to get better, fast. The response of Londoners – like that of the people of New York, Amsterdam, Berlin and a host of other cities around the world – has been a resounding yes.
It is therefore extremely disappointing that TfL (no doubt working hard on many other elements of the transport system) has chosen resoundingly in this case to make itself part of the problem. It’s even worse that TfL claims it is acting on behalf of Londoners, not against them, as it lines up a whole slew of regulatory changes that could ban some of Uber’s key features.
How could it be in anyone’s interest to wait an extra five minutes for a cab? If every Londoner was five minutes late for work tomorrow, it would cost the economy close on £10m. More people stranded for longer on deserted streets late at night is not a recipe for lowering crime. TfL is not protecting us. Like all incumbent organisations instinctively try to do so, it is protecting the status quo, at the expense of competition and the benefits it delivers for customers.
It’s technology, of course, which has made this possible, and it’s done so in direct response to something consumers want or need. The answer is not to take that choice away from them, then tell them it’s for their own good.
Sadly, this story of standing in the way of innovation is not a new one by any means. Time and time again throughout history, it’s been a fight between the positive disruption of challengers and the old guard, digging in their heels to protect vested interests. The brilliant book Why Nations Fail (by Daron Acemoglu and James A Robinson) contains a multitude of examples, the most striking of which, perhaps, is the Ottoman Empire’s banning of the printing press for 300 years.
By the time the Ottoman Empire changed its mind, literacy rates in western Europe were 40pc to 60pc, compared with 3pc to 5pc for the Ottomans. While people in western Europe were reaping the rewards in growth, productivity and wealth, the Ottomans were only just beginning to learn to read. History is littered with similar stories: Elizabeth I banned sewing machines, fearing revolt from hand knitters; while German boatmen went one step further, sinking the first version of a steam engine in case it threatened their livelihoods.
In cases like this, the response to new technology has been to see it as a threat to be stamped out, rather than an innovation to be embraced. And in each case, the effect has been that prosperity and living standards have suffered as a result. The efforts of the old guard did not succeed in preventing the growth of those technologies, they simply ensured that growth happened somewhere else.
The same nonsensical scenario is being played out today between the hotel industry and the likes of Airbnb, much as it is between conventional taxi drivers and Uber. The truth is that if we repeat the mistake of the Ottomans, banning innovation to defend the status quo, we are turning our backs on the jobs, growth and prosperity of tomorrow’s economy. We are making life that bit harder and less joyful for consumers.
In contrast to the incumbents, challenger business are built to be nimble and to adapt quickly to today’s rapidly changing, globally connected digital world. They have to be smarter and more efficient. Perhaps part of the reason dominant incumbents are so threatened by challengers is that frequently inherent in the challenger business model is a principle of taking power away from big corporates, and giving it back to customers. This could be in the form of more choice, more information or new products. While some businesses might see this as an existential threat, history suggests that those which seek to hold back the rising tide of consumer empowerment lose out in the end.
And so: Uber, as well as Airbnb, easyJet, Transferwise, and all the other challengers – we are with you. At the same time, all the people who use and value these services – and who recognise how much worse off the world would be without the innovation and competition they have driven – should be making their voices heard. It’s a tough gig standing up to the big guys, take it from me. Uber may not be perfect; companies rarely are. But the point is that customers should be treated like grown-ups and given a choice. What they decide to do is up to them.