TECHNOLOGY SPECTATOR: The app assault on the taxi monopoly

The NSW cab industry’s latest move to keep disruptors at bay has hit a snag – is this a fight it can't win?

Technology Spectator

The New South Wales taxi industry’s latest attempt to keep upstart disruptors at bay has hit a slight snag with allegations of the NSW Taxi Council using unethical means to make life more difficult for the taxi app developer ingogo.
With traditional taxi booking channels being undercut by mobile apps, incumbent cab companies are launching their own apps to combat the threat. But can they survive this disruption cycle without resorting to strong arm tactics and is there a way for all parties to work together?

According to ingogo’s founder Hamish Petrie, the industry is fighting a battle it cannot win and the incumbents won’t survive the disruption.

Petrie’s fighting words come as he lodges a claim to the ACCC and other regulators about the recent allegations of unethical practice by the NSW Taxi Council to halt the uptake of emerging taxi applications.

As earlier revealed by Fairfax, the NSW Taxi Association used one of its employee’s links to Crime Stoppers NSW to orchestrate a marketing campaign that painted the use of non-incumbent taxi applications as being unsafe.

The move is symptomatic of the attitude prevalent in most industries in Australia. It highlights a process where the initial aversion to digital disruption is slowly replaced by adoption but not without ensuring that the incumbents get to keep the lion’s share of the profit.

We have seen a similar attitude come to fore in the Optus TV Now case, which has seen a new disruptive TV streaming technology frozen in time due to its undercutting the Telstra digital rights agreements with the various sporting codes.

However, swimming against the disruption tide is a difficult proposition in the long term and Petrie says changes to the existing taxi setup are long overdue and inevitable.

According to Petrie, the NSW taxi industry operates on "antiquated platforms” and the growing popularity of start-ups like Ingogo and GoCatch bears out the consumer appetite for new booking channels.

"They know they can’t outgun us on the technology, they know they are behind the times, so all they really have left is to try and use these misleading campaigns,” Petrie says.

Even if ingogo’s appeal to the ACCC fails, he says that customers will still "vote with their feet” and choose emerging applications over the taxi industry’s current systems.

Petrie’s indisputable passion for the cause is not entirely mirrored by ingogo’s peer Go Catch, which has opted to take a less antagonistic stance with the industry.

Go Catch’s co-founder Andrew Campbell told Technology Spectator that while his company shares Petrie’s sentiment it won’t be actively pursuing NSW Taxi Association over the Crime Stoppers campaign.

"We’re in the business of providing taxis and giving drivers a good experience driving taxis, we’re not in the business of taking people to court,” Campbell says.

However, Campbell wouldn’t rule out legal action to ensure a level playing field.

"If trying to improve the taxi situation means that legal action is required we’ll look at that when it happens,” he says.

"Hopefully the appropriate regulators around the country are keeping an eye on technological innovation and they see the opportunity to improve the situation in the taxi industry.”

Campbell’s statement hints at the major roadblock faced by the start-ups: they exist outside of the regulated taxi industry which is run by each state government’s transport departments.

According to a spokesman for the NSW Taxi Council, it’s the same reason why the incumbents will never be able to partner with any of these start-ups and harness their technology.

The situation will change if the state government ever introduces the likes of ingogo and GoCatch into the regulation for the sector.

But as the spokesman put it: "that’s a matter for the regulator”.