Technology

Uber App Brings Disruptive Innovation

Posted on August 8, 2013 by Danny Bacher

Disruptive Innovation — The process of developing new products or services to replace existing technologies and gain a competitive advantage.  

Clayton Christensen coined the term Disruptive Innovation in his book, “The Innovator’s Dilemma,” published in 1997. Some of the key points are:

  1. A disruptive innovation initially offers a lower performance according to what the mainstream market historically has demanded.
  2. It provides some new performance attributes, which in turn makes it prosper in a different market.
  3. As it improves along the traditional performance parameters, it eventually displaces the former technology.

Uber is the most talked about topic in our industry. I have been in this industry for a while and haven’t seen anything “upset the masses” quite like Uber. I think some people are afraid of it while others just don’t understand it and how it will affect their business. Whether you approve of Uber or not, no one is arguing the fact that Uber is a great piece of technology, a game changer and is spreading like wildfire.

Uber has the branding down, as we have all seen how quickly the company has grown. I think Uber’s biggest mistake is how it went about setting up operations in each market. I understand that when you are a new business, with great initial traction, you need to facilitate those trips, otherwise you will be forgotten and your clients will go back to using taxis or car services as they did before. If Uber had gotten the proper licenses and insurance, and used licensed and permitted companies or operators, etc., it would have infiltrated our industry to a point that I don’t think we could even fathom.
 
Fortunately, for all of us, they didn’t and we now have the opportunity to fight and make them illegal. We as an industry made it harder on ourselves; we gave and continue to give them vehicles. Some of the larger companies in Atlanta provided multiple vehicles during their launch for months and some companies still do Uber work. I wouldn’t even return their calls. If the larger companies didn’t give them vehicles in the beginning, it would have made it much more difficult, if not impossible, for Uber to launch in Atlanta.

We must be careful in how we try to banish Uber. Associations nationwide are fighting to get rid of Uber. The main reason is that Uber is an on-demand service while we are legally not allowed to provide that. I cannot speak for all cities, but as far as I am aware, that is the case in most. On-demand service makes you a taxi. If we are successful in banning Uber on the premise that it supplies on-demand service, are we not digging our own grave in a way? We all agree that technology is pushing our industry forward and our clients are asking, some requiring, such technological advancements. Topper Worldwide, along with many of the other larger companies, already has apps for our clients. The next version of these apps will have the same technology as Uber, where the client can see the vehicle tracking in real time. Some software providers are already developing an on-demand module to offer to its clients as well. I believe some limousine companies are sitting on this on-demand technology and updated apps that show vehicle tracking in real time because they are waiting to see what specifications are illegal about Uber’s operation. If such technology is ruled illegal, then we as an industry just took one step forward and three steps back. Use of any similar technology will then mean you are operating illegally.
 
At the end of the day, there will be innovative technologies that come along for any industry. As a business owner, you need to pay attention to Uber and take some notes. How did they get so much brand recognition in such a short time? How have they been able to amass so many users? How are they able to cut out the office staff that all of us have and still provide a similar service?
 
You need to ensure that your company is nimble enough to “keep up with the Joneses” and are able to provide your clients with the technology they need. Technology is not only a tool to keep existing clients happy and attract new ones, but the right technology will increase the efficiency of your operation.

Danny Bacher is the CEO of Topper Worldwide Chauffeured Transportation in Atlanta, Ga., and a member of the LCT Fast 40 group of innovative leaders. He can be reached at [email protected]

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