The Impact of Ride Sharing Services on Melbourne, and Australian taxi industry

The Impact of Ride Sharing Services on Melbourne, and Australian taxi industry

Like in many other cities around the world where Uber and other ride-sharing companies have gained a foothold, the Australian taxi industry is completely shaken at its roots, and a serious threat of extinction is starting on the face of all those who enjoyed the government aided monopoly that the industry enjoyed.

The taxi industry in Melbourne and other parts of Australia can be compared to some of the well-known print publications of yesteryears that have either perished or are on the death-bed because they failed to align with the times and appreciate that changes would be inevitable. The changes when they arrived were too sophisticated, and the digital world provided solutions that the customers gave a huge thumbs up, to the huge detriment of the taxi industry that hitherto enjoyed a monopoly or near monopoly with the customers left in the lurch.

The print publications have an intrinsic physical value that can save it from extinction, but there appears to be nothing that can come to the aid of the taxi as well as its driver. The virtual disappearance of the traditional cab might still be a few years away in Australia and elsewhere. But, what is important is that the writing on the wall is pretty clear. The heydays for the industry are gone – gone forever.

From a consumer’s perspective, he has started enjoying not only better cabs, on-time reporting, and hassle-free trips, but also lower spending and this experience of spending less for a service that is significantly better have become life-changing.

Mr Ashish, the proud owner of Melbourne’s popular taxi company, Taxi Maxi, says “The lower prices presently offered by ride-sharing companies like Uber may not last for ages, and many see that as a marketing strategy which these companies can afford. The future may present a situation where these services virtually get into the driver’s seat and dictate their terms. But, for now, they are admired and patronised in a big way.“

The experience is what counts and traditional taxis can hardly ever match that. The taxi industry has itself to blame for the sharp shift in customer preferences. Customers have been treated unfairly for decades, and now the tables have turned. There are even instances of some cab companies charging as much as 10% under the guise of processing fee when credit cards are used for payment. Apparently, this was merely a ploy to get that extra pound of flesh from the customer. Pitted against this, the likes of Uber is offering convenience and seamlessness, and both these factors appeal in great measure for the customers.

With the ride-share services, the customer is more at ease because the cabs arrive on time, the cabs are clean, there is always an English speaking driver behind the wheels, and he is good at his job, driving people around. What more should we expect? Often, the customer also ends up paying less than what he would have paid a traditional taxi.

Traditional taxi services are up in arms against ride-sharing companies like Uber, in nearly every city that they are operating. But in spite of that, the service is growing in popularity, and in some cities, competition is giving market leaders like Uber plenty of sleepless nights in terms of market share.

Another potential problem that the Australian taxi industry could face in the short run is a shortage of qualified drivers. Many cities where Uber and similar services operate are already experiencing this trend. Uber drivers are also reported to be a happier lot with the working conditions as well as the money they make.

Tuning into customer expectations can possibly help

While it is true that the taxi industry is suddenly caught in the whirlwind of uncertainty, tuning into customer expectations can be the singular means of clawing back into the business. The Victorian government cannot wholly undo the impact of the ride-share companies for a variety of reasons. Some steps underway can bring a certain degree of relief to the taxi owners and license holders. However, at the end of the day, if customers stop patronising this service wholly or partly, the government cannot be faulted, and the government is unlikely to bring back status quo because such a measure can potentially invite public wrath.

Some measures are already under way

Ride-sharing services are already regulated in the ACT jurisdiction, perhaps making a beginning for the rest of the country. Admittedly, these measures may only be meeting the expectations of the Taxi Industry halfway. But, the Australian government is not alone in finding ways to stop the ride-sharing services altogether. In nearly every other country where these ride-sharing companies, traditional taxi industry has been up in arms against the service. That notwithstanding, the services have been growing in popularity at a rapid pace.

Only city where China exited the business in favour of a merger

China has possibly been the singular exception with Uber having merged its entity with Didi Chuxing, which is the Chinese equivalent of Uber. Interestingly, Beijing was also the 100th city where Uber had opened its services and was the fastest growing cities around the world in mid-2016. But then, that merger did not translate to a defeat for Uber and the contrary, and Uber is walking free with riches in its pocket.

Conclusion

Although it is pretty difficult, the Australian taxi industry must come to terms with hard realities. As in other cities around the world, ride-share companies will continue to grow and impact future prospects of the traditional taxi industry. The License plate regimen will gradually ease out of the system

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