Shake It Up, Baby: Consumer Benefits and Pitfalls of Market Disruption

by Chris Bjorklund
Alternative taxi services are one of the most popular market disrupters in recent years. Photo: American Ratings Corporation, 2015.

Alternative taxi services are one of the most popular market disrupters in recent years. Photo: American Ratings Corporation, 2015.

For years, I’ve lived in a San Francisco neighborhood where you can’t get a taxi without a long and frustrating wait. The taxi phone number is always busy, and when you finally get through, you’re on hold for 10 minutes…and it might take another 30 minutes for the driver to arrive! You’ll never find a taxi that’s just waiting for a pick-up.

Now, thanks to alternative taxi services, I can hail a ride with my smartphone and it arrives in less than 10 minutes. As a result of the new competition, I’ve noticed traditional taxi services have upped their game. Instead of busy signals on the phone, you get friendly dispatchers and freshly painted vehicles.

When a new competitor comes on the scene, consumers may benefit from more options, greater convenience, lower prices, faster service and better quality. But we’re learning about potential pitfalls, too. Recently, an alternative taxi service rejected my son’s credit card for a ride. When he attempted to clear up the matter, he couldn’t reach anyone in customer service by phone and no one responded to his emails. Finally, on my advice, he resorted to Tweeting about his problem, and only then did the company help him resolve the matter. It was a time-consuming and frustrating process. We’ve also read about the concerns with insurance, driver training and background checks at some of these companies.

Only time will tell how these market disrupters will fare as they become more established in the marketplace. Meanwhile, many consumers will take a chance and try alternative services, and in the end, the companies that serve our needs best will win our repeat business and loyalty.