By attacking the Paris transport market with their UberPop service, Uber’s leaders made – in addition to any criminal offences they may be charged with – two mistakes: one tactical, if not strategic; the other methodological. As if digital geniuses forget the basics…
UberPop: perhaps illegal, and in any case a mistake
The UberPop service starts, a priori, from a good idea: complementing the existing offer (taxis and private hire vehicles, known in France as VTC) with a low-cost service that you or I could provide or benefit from (subject to the law, of course). With this offer, any driver could, for a fee, take any passenger to their destination. The service was even presented as occasional, short-distance “car-sharing”, whereas BlaBlaCar, for example, offers medium- and long-distance journeys, and ID-Vroom focuses on regular home-to-work commuting.
This new offer provoked unacceptable violence in Paris, and strong political reactions, quite apart from the criminal proceedings against the company’s managers, which will show – or not – the incompetence of the legal advisers who were presumably consulted on such a “bold” offer.
To their credit, let us immediately dismiss the accusations of tax fraud. With payments fully centralised on the company’s servers, the traceability of transactions bears no comparison with the cash demanded by “professionals” who refuse any other means of payment.
But UberPop can be criticised on other grounds.
Greed does not pay
The arrival of “classic” Uber had been difficult in Paris and the big cities. And the wounds had barely healed when the company’s leaders apparently wanted to go further in conquering the capital’s market. Their “tactics” – or perhaps even their “strategy” – are hard to understand.
In terms of the “allies strategy”, Uber began by alienating its own relays of opinion and action: the VTC drivers who had managed to establish themselves and who no doubt saw this new offer as a real betrayal. Because while they did not have to pay for a taxi licence, they did have to obtain a passenger transport authorisation and buy or lease a recent vehicle. Which is not the case for UberPop “drivers”.
And above all, by attacking the Paris market – probably chosen because it was potentially the most profitable – Uber’s leaders underestimated the power of the symbols and the players they were confronting.
United against digital transformation
France is both State-dominated and centralised. Which means that the vast majority of its public (or quasi-public) decision-makers are terribly and sometimes exclusively attuned to privileged – when not anachronistic – habits of travelling around the city centre by taxi, even though the density of public transport within the city is the envy of many of our neighbours.
And above all, these “public decision-makers” are intimately close to the holders of these “privileges” – or, to be less polemical, these “quasi-monopolies”.
Let us quickly dismiss suspicions about the historical or even personal closeness between the heads of taxi companies and their public or quasi-public “customers”. What binds them is, above all, ontological.
Indeed, digital transformation directly weakens all those who draw their “power” from redistributed resources and from control of centralised information.
With the globalisation of trade and economic difficulties, the services of the centralised State and of local authorities, and their elected leaders, see their primary raison d’être disappearing day by day. Without going as far as clientelist abuses, even the best-intentioned elected officials are increasingly confronted with their own “uselessness” when, after promises of better days, the bill comes due and the coffers are empty – or full of debt…
But above all, with the disintermediation offered by the tools and practices of the digital world, many public services are showing either their uselessness or their inability to add value in managing information useful to the public. Who will remember the millions the French State invested in trying to compete with Google Maps? And day to day, many services struggle to justify their existence when a growing share of our fellow citizens can, with digital tools, obtain the information they need – including outside public servers – and carry out the necessary formalities themselves, faster, free of charge and at any hour, while the availability of public officials is limited by their status and the resources available.
So, faced with the threat of “digital disruption”, the supporters and beneficiaries of the bureaucratic order join forces in a naturally violent reaction, since it is quite simply a matter of survival. To the taxis, lobbying and baseball bats; to the politicians, moralising statements (paying for a service is bad…) and legal action. At best, one can sympathise…
Rural and peri-urban areas, forgotten by all
Unlike a Paris launch, UberPop could have provided a real service to areas forgotten both by the Californian company’s leaders and their no doubt very urban French relays, and by Parisian public decision-makers.
Indeed, many of our fellow citizens live far from the big cities: either historically, or because property prices push them beyond the “inner” and “outer” suburbs, to where there are few public transport services. And because their resources are limited, a car is often an unattainable luxury – even though it is inseparable from employment and social life.
For these people, taxis are not an option. And while some local authorities offer very worthwhile “on-demand transport” services in addition to regular public transport, sound management of public resources does not allow them to be generalised.
In these areas, an UberPop-type solution would be both useful and virtuous. Mutual aid between individuals exists, fortunately. But it is certainly not enough, when modern life puts pressure on everyone’s availability or, quite simply, because modesty still exists, preventing some from asking those around them for more than seems acceptable.
In these areas more than in Paris, such matching solutions would make low-cost mobility easier for people without means of transport, or who simply want to be environmentally sparing.
And they would allow others to offset the running costs of their vehicle, as their availability allows – because for them every euro counts – without competing with taxis, which are not present in these markets unless subsidised or paid by the local authority, for example for “para-medical” transport.
Beyond the services provided to residents, the difficulty of easy, affordable access also hampers the economic and social development – if not the very survival – of many areas.
Have you often considered travelling in a non-urban area without using your car – after a train or plane journey, for example? For these “last mile” journeys, the cost of a professional taxi, or a conventional car rental, can quickly equal that of the long-distance trip. A deterrent, then. Alternative peer-to-peer rental systems are emerging. But here again, for occasional trips, an UberPop-type system could help maintain activity in rural and peri-urban areas and reduce solo car use, while contributing – even modestly – to increasing residents’ incomes.
Some will suggest that local authorities should take charge of these solutions, because the public sector is always virtuous while private initiatives are mercantile and therefore reprehensible? Beyond this ideologically debatable argument, why try to reinvent technically cutting-edge solutions already paid for by more lucrative markets?
Of course, the volume of business would probably not be huge. But once the app is developed, the cost of maintenance and upgrades is marginal and, above all, shared.
Digital means the multitude and emergence
Digital transformation means, above all, the multitude and emergence.
And that is the second mistake of Uber’s leaders. By choosing the “big market” of Parisian transport to launch UberPop, they sinned through ignorance and/or greed, forgetting these methodological fundamentals.
The potential of “big data” is not the value of your individual data, but the aggregation of all your data with that of millions of other users. Profitability in digital does not come from attacking mature markets head-on. It comes from exponentially multiplying services that are not very profitable individually but also not very costly, so that, multiplied, cents become millions. And so that the multitude, by adapting, fills or overwhelms the inevitable gaps of monolithic structures that are slow to react and even less creative.
Uber, though a pioneer of digital disruption, apparently ended up adopting the frontal tactics of the monopolistic dinosaurs.
For the survival – even the revitalisation – of our territorial fabric, let us hope that players faithful to the principles and strengths of digital transformation will illustrate the second principle of this new world: the emergence, now made possible, of new services as close as possible to everyone’s needs.
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