Monthly Archives: February 2015

Google Self Driving Car Prototype. Photo: Google

What Happens to Taxis in the Future of Driverless Cars?

When it comes to innovation opportunity, there’s three ways a business can go:

  1. Not notice it till it’s too late
  2. Defend against it
  3. Seize the opportunity and exploit it

Taxis vs Uber is an example of an old school, slow moving industry at first not noticing an innovation opportunity. Protected by their monopoly protectionist government regulation the taxi industry has been slow to catch on to the needs and wants of the market place.

Taxi companies protected by their monopoly enforcing governments have long ignored the customer experience. Uber and Lyft saw an opportunity to provide a better customer experience and their success has has shown they’re providing what the customer wants.

But in 2015, Uber and Lyft are standing together with the taxi industry facing another innovation opportunity. The driverless car is not far away and no one is prepared for the societal changes it will bring.

Imagine: you want to go from work to your favourite pub. You pull out your phone, select your pickup location and time, then select your destination. An algorithm finds an electric driverless car that will be available nearby at your pickup time with enough charge to handle your trip. The vehicle arrives, you don’t have to make small talk(perfect for the introvert) and quickly takes you to where you’re going while you read a book on your Kindle. Simple.

Think this is science fiction?

Google Self Driving Car Prototype. Photo: Google
Google Self Driving Car Prototype. Photo: Google

Consider:

  • Google’s driverless cars can already handle the driving. It’d be pretty simple to connect the car driving computer to a cloud-based dispatch system.
  • Uber and Lyft using consumers wouldn’t have much of a problem with accepting driverless car technology.
  • Tesla already has electric vehicles that can do 300+ kilometres on a single charge and swappable battery packs already exist.
Tesla Electric Car. Photo: Steve Jurvetson
Tesla Electric Car. Photo: Steve Jurvetson

It’s pretty unlikely that people will be buying driverless cars in 5 years. However an innovative start up could team up with a driverless car manufacturer to get on the road pretty soon.

The taxi industry has already chosen innovation option 1 and has now moved on to option 2. Regardless of what government regulators do they will lose! They will lose because they were too comfortable in their monopoly regulations.

The question is will it be Uber or Lyft to first roll out driverless car services or will it be another new company still waiting to be started in someone’s old school garage?