Uber’s Problem Is Not That It’s Too Disruptive – It’s That It’s Not Disruptive Enough

I used UberX for the first time last weekend.

The app itself made ordering a ride easier than calling the taxi company. Knowing how far away the car was and exactly when it would arrive was also a nice touch. For me, at least, calling for a taxi invariably entails scrambling to leave because the cab has arrived earlier than expected or an excruciating wait while the clock counts down on the window of time necessary to get to the airport.

The UberX car wasn’t as nice as a standard taxi here in Montreal (other cities are less fussy about the types of cars used as taxis – Dawson City, Yukon and Victoria Beach, Manitoba come to mind as excellent examples of that), but I didn’t mind.

If a ride in a slightly plainer car means saving money, all the better. I usually take the subway. I’m not picky.

The trip itself was fine. Quick, efficient. It was the driver’s first UberX trip too; we laughed about it a bit, but everything was seamless – especially payment.

That solves another of the big “pain points” for taxis. If you’ve ever tried to pay with debit for a taxi ride you can probably relate to the experience of watching the driver pull out a card reader, plug it in to the cigarette lighter, wait for it to boot and then wait for it to connect to the network.

And that’s if you’re lucky enough to find a cab that takes Interac – not easy in many Canadian cities.

While my first UberX trip was better than the average taxi ride, on the way back I hit technical difficulties. So I walked into the street, raised my hand, and within seconds I was on my way.

The experience was about the same as with UberX, with one key difference: it was legal.


SEE ALSO: Five of the Stupidest Things Uber Has Ever Done


You can call UberX “ride sharing” or whatever you want but at its core, it’s a service where people pay money for a metered ride in someone else’s car and that is, literally, the definition of the word “taxi.” Uber isn’t disrupting the taxi business; it’s just innovating in the taxi space.

That’s a big part of the reason it’s been so hard for Uber to deal with authorities and regulations. It hasn’t found some loophole – it’s just running an unlicensed taxi service and cities worldwide have created systems to eliminate unlicensed taxis.

Taxi codes set standardized prices and are intended to create artificial scarcity, by limiting the number of cars on the road. Here in Montreal, the taxi code even goes so far as to dictate which months of the year drivers are allowed to “wear Bermuda shorts or polo shirts” instead of long pants and sleeves.

It is a system designed to stifle competition and Uber, instead of doing an end run around it, has plunged right into the middle.

Taxis aren’t the only place where tech startups are innovating in a highly regulated environment, though.

Airbnb has managed to make strong inroads into the short-term accommodation industry without the bans and the backlash from regulators. While some might say this has something to do with the company’s friendlier image – it certainly seems as though Uber’s leadership and drivers can’t go a day without creating more problems for themselves – the truth is that lodging is a far more competitive marketplace.

Airbnb has also managed to tap into something that already exists : guest houses, hostels and traditional bed and breakfasts have long provided alternative, legal, hospitality services. Even for AirBnB hosts who rent out short-term accommodations as a full-time business, it’s often much easier to become fully compliant with existing regulations than it is for the semi-pro taxi drivers of UberX.

Uber has asked to be regulated in several markets where it operates. But even though Uber as taxi dispatch service seems likely to be acceptable to governments, UberX has far less chance of success. A taxi by another name is still a taxi.

While there may be some movement on the part of governments, the federal Competition Bureau has voiced its support of liberalizing taxi regulations, it remains to be seen while cities, particularly those with powerful taxi lobbies – like Montreal – will make any changes.

And while the taxi industry – known for its inefficiencies and poor customer service – seems ripe for disruption, small innovations wrapped in hubris aren’t a disruptive technology.