If one were looking for a case study in “creative destruction” – the economist Joseph Schumpeter’s term for the messy way in which capitalism renews itself – then the current row over Uber, the internet-powered taxi-hailing service, would be hard to beat.Launched in 2010 in San Francisco…….
….On the other hand, taxi services are regulated for good reasons, chief among them passenger safety. A world in which just anyone with a car in an urban area could pick up passengers from the street or their homes is not one that most of us would countenance.
The best strategy for taxi firms and regulators, therefore, would be to learn from the mistakes of other industries (think record companies and print newspapers) that could have harnessed the internet for their own purposes, but chose not to do so until it was too late.
Uber – or similar services – is here to stay. It offers some ways of improving an important public service. Given that the taxi industry can’t beat it, the smart thing to do would be to join forces with it – and keep some of the additional revenues.