There's simply no reason for this, other than to protect the legacy taxi providers. If consumers want those app-based services, why are they being blocked? And, of course, because so few cars will be available, those services become a lot less desirable (less likely to have a car available nearby, etc.). The end result is that it sucks for everyone. People wanting to get places will have fewer options. People who might want to earn money as a driver cannot. These new innovative companies are held back. The only "winners" are the current taxi owners who have less competition.
Friday, March 21, 2014
Make the rules or your rival's will: Seattle bans ride-sharing to protect taxis
Seattle is trying to slow down innovation to protect incumbent firms
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What I like best about this article was the quote from Tim Burgess, “Someone told me that trying to limit TNCs would be like prohibiting Netflix because we wanted to protect Blockbuster.” That is just the truth! Blockbuster should have done more to compete with Netflix but they didn’t and were sent backing. Again as mentioned in the article, the demand is there so why suppress these new ride sharing apps. To me, it also seems like the taxis are trying to monopolize transportation choices in the city. Either way, the app based transportation companies are exhibited a resource-based view to their strategy. These companies are able to sustain a temporary competitive advantage because they operate at lower costs. (Froeb, 2014) The main source resources/capabilities that gives them these advantages are the app based technology they use. Ultimately, I agree that it is crazy that the town of Seattle is not listening to their people. I know it is not possible for all people, but they could try to not use taxis at all, when everyone is limited and/or losing money maybe there will be some change. The taxis could so try to reduce the fare they charge or increase the amount of available taxis so they can compete more with the app based transportation companies.
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Froeb, e. (2014). Managerial Economics; A problem solving approach (3rd edition). Mason, OH: South-Western Cengage Learning.
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