There has been a number of news articles this week around disruptive startups that have changed industries. In particular there seems to be increasing evidence of a backlash against these new upstarts.
Über, a taxi hailing service in New York, has been forced to suspend its operations Because it did not comply with local regulations. In a scathing piece Paul Carr argues this is not a simple case of Goliath triumphing over David. rather Über’s founder, Travis Kalanick, pursued a strategy of brinkmanship with the state of New York by claiming that his disruptive model is justified in a digitally connected world.
Carr makes an interesting point in questioning whether these disrupted models are intrinsically good or better than the business they’ll they are trying to replace. In the case of taxi cabs there is a justified reason why they are licensed in the interest of public safety. Trying to get around such laws or to replace them wholesale may cause more harm then good.
The counter argument goes that regulations simply preserve the status quo or as New York-based venture investor Chris Dixon described it in a recent blog post, startups like Airbnb and Uber are “regulatory hacks,”
Lyft – a car pooling service – gets around the problem of regulation faced by Über. A driver effectively rents out their passenger seat to commuters and receives a cut. At the end of the journey the driver is rated. Lyft neither classes itself as a taxi service nor do the drivers collect fares, rather they receive donations.
Is this a case of a subtle distinction in how Lyft and Über have positioned their business? I think there’s something more to just disruption for the sake of it. Lyft filled a particular need when it was launched in San Francisco – because finding a taxi is relatively hard to do.
Über strategy was to go head to head with a number of taxi carriage services in New York. It is questionable whether it was actually fulfilling an obvious need. Since when has it proved hard to hail a cab in NYC. It sounds more likely that it was simply looking to disrupt for the sake of disruption.
Disruption to my mind works best when it fulfils a particular need or gap in the market. The likes of Kickstarter and AirBnB work because they came up with a solution to a particular problem. That is different to Über, which has devised a solution to a problem that doesn’t exist.