What is common between the growth of Uber and the development of the era of cars?

Years pass, innovation continues.

Recently, Uber won another small victory. More than a month ago, the Ontario Provincial Court refused the request of the Toronto authorities to ban this road service. At the moment, Uber is alive and well and thriving in this place. Not that in my hometown, Vancouver, where the service remains banned. And this is despite the fact that Vancouver has the worst ratio in the country of the ratio of taxis to the number of inhabitants (at least according to the results of one study) and the highest cost of taxi services in Canada.
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For Uber, this whole controversy is nothing new. With the spread of service around the world, cities, provinces and whole countries responded with a continuous stream of orders to stop illegal actions of the service, threats and fines. Their experiences are mainly related to the standards for issuing permissions to Uber for taxation, customer security and the impact of the service on the traditional taxi industry.

Of course, for the passenger transportation market, it is not the first time to experience drastic changes due to the advent of a new technology. More than a hundred years ago, the dominant vehicle standard was opposed to innovation, which also undermined traditional industry and provoked violent resistance. Skimming the history textbooks, we will see that rethinking the chaotic arrival of cars gives us the opportunity to see in an interesting perspective not only the saber of the Uber service, but also the life cycle of innovation.

The need for change

At the end of the nineteenth century horses were the main mode of transport. The average New Yorker made 297 horse rides during the year, and the total number of horses attracted to transport people and goods in the city around the clock was approximately 200,000.

But anyone who has had a ride in a carriage through Central Park knows that a horse is far from an ideal means of transportation. The average horse produces from 9 to 14 kg of manure and up to 4 liters of urine on a daily basis. Some areas in the literal sense were ankle-deep in animal excrement, which attracted a huge number of insects that spread the infection.

Avoiding depressing details, I would say that several important parallels can be drawn between the situation described above and the modern passenger transportation industry. Taxis are incredibly important for movement in many cities, and yet, it is necessary to recognize that the system has its drawbacks. We can observe an insufficient number of cars, especially during peak hours and in certain areas. Prices are too high, and sometimes customer service leaves much to be desired.

At the same time, competition is suppressed by a system of medallions for taxi drivers, according to which local authorities issue a limited number of prohibitively expensive medallions needed to drive a vehicle (for example, in New York at auction you can see how the price of this element goes up to a million dollars). And life for drivers who pay about $ 100 a day (or more) just for the privilege of driving a taxi is not easy: extremely long working days, unpredictable customers and low net income are commonplace. Here you can not argue: this situation also requires a change.

Rift and resistance

If we talk about the problem with horses, the new technologies offered a promising solution. The first gasoline-powered cars appeared in Germany in the early 80s of the 19th century, and the Ford Model T was put on the conveyor in 1908.

The cars had many obvious advantages: they provided a cleaner (at least in the short term), more reliable and more civilized way of moving around the cities than horses. But this did not mean that they were met with joy - quite the opposite. At the very beginning, the city authorities quickly reacted to the appearance of cars, declaring them unacceptable because of their insecurity and unnaturalness. In Quebec, the first drivers were arrested for their "insane antics". In Cincinnati, residents demanded the "revision" of cars in order for their maximum speed not to exceed 40 km / h.



But the creators of the new technology, along with a growing army of drivers and dealers, have been hurt. Just like today's "high-tech destroyers," they set about developing marketing and public relations to prove the need for innovation. The popular magazine about horseless Age (Horseless Age) - TechCrunch of that time - emphasized that with the departure of horses in cities, the noise level will decrease, the sanitary condition will improve, and these factors will even contribute to cost savings.

For all who have watched the development of Uber, all of this may look a little familiar. From the very beginning, this service offered a number of distinct advantages over traditional taxis. Uber machines are often cheaper to use and later roll off the assembly lines. Convenient mobile application makes it easy and fast to call a taxi and pay for trips. For drivers it is also beneficial, since they get 90% of the money received.

But, of course, not everyone was happy about it. The many advantages offered by Uber became possible only because the service “skirted” a limiting licensing system for taxi drivers. Since the company has developed its own standards for drivers, local authorities (often supported by powerful organizations lobbying for the taxi business) did not interfere in making decisions that the service was illegal and unsafe. Even in San Francisco (the first city in which the service began to provide its services), a decree was issued from the very beginning to terminate actions contrary to the law of the company. Around the world - from the USA and Germany to India and the Philippines - the initial reaction was similar.

Growth and normalization difficulties

But good ideas — especially those that make life easier and generate income — find ways to pave the way for themselves and resist convictions. By 1912, 356,000 cars were sold in the United States. Compared with 4192 copies sold in 1900, this is an increase of 8000%.

With the proliferation of cars and the gradual replacement of old-fashioned horse-drawn vehicles in cities, the problems associated with this development became apparent. They were hard to ignore. Technology has stepped forward, but the attitude and rules did not keep pace with them. Cars filled the narrow streets created for horse-drawn carts, often creating congestion. Untrained drivers and the lack of rules turned the streets into a chaotic dangerous place.

But over time, improvements have come. Local authorities have introduced official driver licensing programs. The pavement was laid, the streets became wider, and people learned the rules of the road. Thanks to public awareness campaigns, people learned how to safely cross the road and learned about the dangers of crossing the street in the wrong place. After the rapid growth, which turned the economy upside down, became a threat to people and livelihood, and opened up many new problems, it turned out that innovations (at least some of them) began to work for the benefit of mankind.

We can observe a similar trajectory of Uber development. Despite all the confrontations, the service has grown significantly over some five years: it is currently available in more than 50 countries and 300 cities around the world. After a recent round of investment, the company's value was more than $ 50 billion, with the result that Uber could become the most expensive private technology company of all time. Only in China alone, 100 thousand trips are made every day through the service, and the company accepts hundreds of thousands of new drivers every month.



Not surprisingly, with the growth come new difficulties and complaints - not only from the legislators, but also from the drivers of the service itself. The decision to increase commission rates caused protests from disgruntled drivers in Los Angeles, Santa Monica, New York and other cities. A recent court decision in California raised a wave of questions about whether a service driver should receive remuneration as a full-fledged employee, and not as a contract worker.

Some municipalities still continue to confront Uber. (In France, the executive directors of the local unit of Uber were arrested for "allowing taxi drivers to drive nonprofessional drivers"). In the meantime, others are raising topical questions about the best development path. “Our bylaws, written many years ago before the advent of those advanced technologies that we see today, simply cannot adequately reflect the activities of companies like Uber,” said Toronto Mayor John Tory recently, summarizing the current situation. . “We cannot arrange the Wild West here ... But we cannot live in a city that somehow ignores the development of technology and the march of time.”

Progress always brings confusion. And while Uber is exposed as a source of heightened danger, the cycle of innovations presented to them is by no means unique, just as the service itself is nowhere near as chaotic and horrendous as its critics describe. Joint trips make life easier, they offer a more efficient way to get from point “A” to point “B”, and the service can only improve. Considering the fact that at a recent referendum, the population of Vancouver voted against the proposal of local authorities to increase the tax for the development of the city’s transport infrastructure, Uber was in a very advantageous position to further fight the current system.

In this question, time will fix everything. Today, Uber and similar companies may look like high-tech thieves. But, if we draw parallels with the past, the arrival of such services may seem the same natural and inevitable process as the displacement of horse-drawn vehicles by cars.