So why is innovation slow and difficult in taxis in Australia?

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So why is innovation slow and difficult in taxis in Australia?

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Industry structures in Melbourne are focused on top down models of command and control.  The forces to create innovation and change do not flourish in this type of environment.

A single vertically integrated major player, Cab charge, has dominated the Taxi Industry. At best the industry can be described as an oligopoly.

Unfortunately for the Taxi industry and the general public, history has shown that our State Regulators have embraced Cab charge technology as innovation, which further enhanced Cab charge’s market dominance.

These innovations improved Cab charge’s profitability whilst passenger safety and security were accorded lower priorities.

Tightly Regulated Fares adds a further barrier to innovation in Taxis.  Capped revenues coupled with Regulator imposed high fixed costs restrict technological innovation in taxis.

Uber, a new entrant with deep pockets, sporting new technology and blatant disregard for Regulators has created chaos and confusion. However, passenger’s desire for a truly at demand transport was met with transport that did respond “at demand” and not “first available taxi”.  The miracle was that the passengers’ need was accorded Number one priority.

Given these characteristics, can technology emerge that meets Taxi Regulator objectives to ensure a safer and more secure ride for Taxi passengers?

To create the conditions for investment, the Taxi industry must own the problem and agree that the safety and security for passengers is a key deliverable in order to see off challenges from popular booking and ride sharing apps.

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