Why Australia’s Taxi Oligopoly Deserves to Lose Market Share to Uber.

They had it coming.

By now we’ve all heard our fair share of the Aussie taxi industry’s ‘outrage’ at Uber launching and expanding nationwide. From the media outbursts, protests, strikes and alleged violence to last week’s failed launch of iHail, the taxi industry definitely made their message clear this year; they don’t want Uber in Australia. But they don’t seem to be making progress or gaining any public support (surprise surprise).

The underlying consensus among the general consumer is that “service quality” and “putting the customer first” have slid down the list of priorities in major taxi companies like 13 Cabs and Silver Top. The new ride sharing service is perceived as more efficient, cheaper, cleaner and friendlier than the average taxi. Uber avoided most regulatory procedures mandatory for their competition (which actually is a concern) and definitely has its flaws, but the mere consumer disdain that exists for the alternative has resulted in them maintaining preference, growth and popularity.

The public perception of the taxi industry? Inefficient, offers abysmal customer service and lacks accountability. In other words, an abomination that has been kept alive too long. It had transformed into an arrogant industry where they had the comfort of knowing you have little alternative. That comfort led to complacency.



During their years of comfortably sitting on the top of the mountain, didn’t the taxi companies have the wealth of time (and resources) to make their own app/ come up with a better service model? Couldn’t they have acknowledged the necessity for transparency and better pricing information? Knowing full well of the rising customer contempt for their business model, they did very little to change. Industries in such positions are inherently resistant to change and tend to be hit harder by disruptive digital age newcomers (think Bitcoin/Google WalletSpotifyBox and Solar City and their respective industries).

Last week’s attempt to introduce iHail (a joint-venture between Yellow Cabs, Silver Top Taxi Service, Black and White Cabs, Suburban Taxis and CabCharge) should have been considered as an option (among many, to improve their offering) years ago. Even so, the fact that these organizations felt the need to conglomerate (80% of the major metro taxi market) to introduce it highlights the fact that they are still not willing to allow healthy competition to exist.

From a legislative perspective, the taxi industry has a case (well, had). The Uber model did indeed exploit the loopholes in the old, over-regulated system that now allows their drivers to not require the expensive “taxi plates”, or pass knowledge tests. But the cries of “that’s unfair” may have been better received by legislators and the public alike if only the taxi companies had acted with a bit of foresight.

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