In lecture 2 we discussed companies’ ability to implement new technologies and what is needed to successfully do so. Kane, G. Et al. (2015) brought forward some very interesting insights, pointing out that shifts in corporate mind-sets in order to successfully compete in the future. However, what if a company is able to successfully implement a ground breaking technology, but the environment is not?
Yes, I am talking about companies such as Uber and Airbnb
The billion dollar ideas, building on the concept of a sharing economy. Both are among the most fastest growing start-ups in the world (Stone, B. 2017).
Their advance so quick and effective, it almost seemed as if many governments had no proper reaction up and till the point that both companies were grounded and widely used all around the world. Only now, the enormous impact of this new era of technology is becoming truly visible, especially in the big cities. The highly successful business models are disrupting industries at a very high pace. However, their impact on society goes beyond the impact they are having on specific industries. Amsterdam is slowly being swallowed up by Airbnb. Investors buying up properties to rent out on Airbnb, with permanent residents being driven away from the city centre by the over heated real-estate market (O’sullivan, F. 2016).
In London, citizens are becoming more and more dependent on Uber when it comes to transportation, with Uber having over 40.000 drivers and 3.5 million users in London alone. However, this immense increase in the use of Uber seemed to go hand in hand with increased criminal offenses and fraud in certificates (Butler, S. 2017).
Governments seem to react once the damage is done. However, since these companies have been able to operate under very loose regulations the past few years, it has become considerably difficult for government to get the situation under control. New regulations in Amsterdam haven even led to Airbnb calling for protest against the Amsterdam municipality (nos.nl, 2017). London has been left in chaos since TFL has decided not to extend Uber’s licence to operate in London last week (Butler, S. 2017).
Information technology is most probably going to give birth to many more disruptive business models. Governments should pay more attention to anticipating these business models, and accompany society with proper regulation. This is easier said than done obviously, 5 years ago who would have thought that a platform for renting out your home to complete strangers would grow to this extend.
‘Airbnb roept op tot prostest tegen gemeente Amsterdam’, NOS, 23th of May 2017,
https://nos.nl/artikel/2174631-airbnb-roept-op-tot-protest-tegen-gemeente-amsterdam.html
Butler, S., Topham, G. (2017) ‘Uber stripped of London licence due to laack of corporate responsibility’ , The Guardian, 23rd of September 2017,
https://www.theguardian.com/technology/2017/sep/22/uber-licence-transport-for-london-tfl
Kane, G. C., Palmer, D., Phillips, A. N., and Kiron, D. (2015). Is Your Business Ready for a Digital Future? MIT Sloan Management Review, 56(4), 37.
O’sullivan, F. (2016) ‘now London and Amsterdam Are Capping Airbnb Apartment Rentals’, Citylab, 2nd of December 2016,
https://www.citylab.com/equity/2016/12/airbnb-london-amsterdam-vacation-apartment-rental-regulations/509396/
Stone, B. (2017) ‘ The 99 Billion Idea’ , Bloomberg Businessweek, 26th of January 2017,
https://www.bloomberg.com/features/2017-uber-airbnb-99-billion-idea/
Nice post!
I agree with you that governments should pay more attention to anticipating disruptive businesses like Uber and Airbnb. However, in the case of Uber, it seems Uber deliberately did not comply to the laws and regulations to gain market share. TfL did not ban Uber to get rid of these innovative ideas, but because they violated the law (Sundararajan, 2017). Lyft, which is a similar company as Uber, is not banned and will gain market share if the ban follows through. I’ve expanded on the subject of the Uber ban in London in my own blog post (https://digitalstrategy.rsm.nl//2017/09/25/uberexit/).
All in all, I think that you are right that the government should anticipate these business models and provide society with proper regulation. However, these regulations should be complied with by the companies themselves. What do you think?
Rik Helsloot
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Source:
Sundararajan, A. (2017, September 23). London’s Uber ban is a message to a reckless tech ethos. Retrieved September 25, 2017, from https://www.theguardian.com/commentisfree/2017/sep/23/london-uber-ban-message-to-reckless-tech-ethos
Reactie op Donnas post
Great point Donna about the fact that governments seem to react once the damage is done. After the start of the Silicon Valley Company Uber in London in 2012, the service has helped numerous people get to the places they want. Only now, the government set sail to help the black cabs in London. (Aleem 2017) As the government has refused to renew Ubers license, Uber started a petition calling for Transport for London to reverse its decision to strip Uber of its licence. The petition now counts more than 600,000 people, who signed it. (Doward 2017) In the governments defence, they reacted on numerous claims made by the Uber drivers un UK. Some started court cases in order to sue Uber for not having holiday pay, pensions or other workers’ rights. (Goodley 2017)
In an interview with Vox, the London Mayor Sadiq Khan stresses the fact that London ought to, as a city, be more on the forefront of innovation and new technology. Uber is one of these companies, and getting back at your point Donna, if the government would have told Uber earlier they were not playing by the rules, they could have changed their business on time. (Aleem 2017) This shows more than ever that having a disrupting business is a challenge, as those companies will always keep facing challenges.
Refrences
Aleem, Z. (2017). Why London is banning Uber from its streets. online. Vox. Available at:
https://www.vox.com/world/2017/9/24/16350064/why-london-banned-uber-explained, Accessed 25 Sep. 2017.
Doward, J. (2017). More than 600,000 Londoners sign petition to save Uber. Online. the Guardian.
Available at: https://www.theguardian.com/technology/2017/sep/23/more-than-600000- londoners-sign-petition-to-save-uber, Accessed 25 Sep. 2017
Goodley, S. (2017). Uber faces double battle against London ban and scrutiny of hiring practices.
Online. the Guardian. Available at: https://www.theguardian.com/technology/2017/sep/24/uber-faces-double-battle-against-ban- and-scrutiny-of-hiring-practices, Accessed 25 Sep. 2017