Taxi industry losing war to Uber because of customer service, not technology
The Scott Wallsten, in research presented at the annual meeting of the American Economic Association of the Technology Policy Institute, finds signs in New York that the amount of complaints per cab excursion there’s declined as Uber has expanded in the city. In Chicago, complaints about air conditioning, “broken” credit card machines and rude drivers have fallen as well with the recent rise of options to san jose taxi service.
As Uber developed popular in New York (a tendency Wallsten corroborates with Google Trends data), complaints fell, even controlling for factors like the weather that might affect taxi service.
The numbers reveal the change in criticisms vs. hundred thousand rides, so it’s not an issue that grievances have dropped just because people quit riding taxis in New York. People that are riding cabs are whining less frequently.
Emily Badger notes that Chicago’s amounts aren’t based on the total of taxi trips, so it’s not clear whether the change is associated to a fall in taxi use. In both cases taxi passengers seem to be seeing better service.
That is clearly a good sign, not just for passengers, but for the wellbeing of the taxi services themselves. When ride-sharing services began intruding into the cartel-managed taxi business, responses revealed how little the industry understood or cared that their success depended on how they handled their customers. It didn’t matter until passengers had simpler and more affordable options. They responded with ridiculous ideas like strikes, a notion that doesn’t work whatsoever when the whole point is that the customers are tired of dealing with your wretched behavior and are actually actively trying to avoid you.
As a result, all customers may wind up getting handled even individuals who continue riding cabs rather than switching to Lyft or Uber.
It reminds me of a time when I lived in a community that had no charter school existence. School board and the school district resisted any effort despite unhappiness expressed by parents over the status quo to be created within the school system, for charter systems. An established charter system managed to expand into the community, because it had a real history of performance to point to overcoming opposition.
Subsequently, about per year after the charter program established itself, and other charter programs began approaching the community, the school district’s high school declared a host of planned improvements to provide more choices for pupils and parents, even including online courses for credit. Because of competition and the challenge provided by the alternate charter system, pupils were choices that are better that are getter even if they stayed within their public schools. The schools had every incentive to up their games (if they weren’t capable to stop the charter schools), because otherwise they’d lose state per-pupil funds. Our Facebook Page.
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