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What to do if Uber or Cabify are your Competitors

The crisis that the taxi sector is going through is not an isolated case in the business world. Hotels also suffer after the entry of Airbnb. Or the stores, with Amazon. Or the telcos, with WhatsApp.

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The crisis that the taxi sector is going through is not an isolated case in the business world. Hotels also suffer after the entry of Airbnb. Or the stores, with Amazon. Or the telcos, with WhatsApp.

The uberization of the economy is inevitable and the only way to fight against it is to adapt to be more competitive. Jordi Damiá, professor at EAE Business School, analyzes the taxi sector in particular and gives us some clues on how to react to this phenomenon.

WHAT IS REALLY HAPPENING

“The taxi sector is threatened, not by the emergence of competitors with collaborative economy models, but by the change in the way the customer consumes passenger transport services. This change in performance and needs of users is incontestable and causes the irruption of competitors such as Cabify or Uber in the traditional taxi sector is inevitable.”

“If the strategic problem they face is promoted by the environment” inevitable “and also appear new competitors and substitutes that offer the customer a more appropriate service to what the new consumer wants, what is clear is that the strategic approach they must carry out must be different from strikes and mobilizations, because, although they are fully entitled to do them, they are not very effective actions and can also damage their image.”

HOW TO STOP IT

“My proposal is a very different strategy from the one carried out by taxi drivers: using their strengths as a collective to eliminate weaknesses and better face threats to generate new opportunities.”

How is that plan carried out in concrete actions?

Purchasing power. “The sector should use its purchasing and contracting power to offer services that allow them to reduce costs in terms of vehicle purchases, maintenance costs and fuel costs. For example, “why not bet on electric vehicles through a large agreement with a manufacturer?”.

Logistics network. The taxi drivers “should enhance the great network they have to offer logistic services for the last mile transport”.

Digitization of the sector. Another key is “betting on new technologies to offer the same customer experience as the Uber and Cabify apps, and doing it globally for each city.

Premium services. “Taxi drivers should offer a Premium service, at least the same as that offered by their competitors: more information to the customer, quick booking and payment, wifi, tourist information, offer services such as drinks, etc.”, continues Jordi Damiá.

“In cities as touristy and technological and with as much history as Madrid and Barcelona, ​​taxis should become the transport of proximity par excellence, offering logistical services, tourist guide and even home support; and all that with the agility, speed and attention that technology offers.”

For this expert, remember that it is the consumer who makes the change. “Why have not the big sectoral organizations acted to help transform? Why municipal governments have not helped them to digitalize? If they want to continue working they must adapt to it and, fortunately for all of them, they still have time to do so in order to remain competitive and for the whole society to benefit from it.”

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