Disruption is good but has its ugly side

Towards the tail end of June 2018 I took a Taxify cab to Jomo Kenyatta International Airport and the driver mentioned that he was working undercover as there was a prevailing strike, yet again, by drivers of both Uber and Taxify.

The strike had arisen due to alleged poor pricing policies between the ride hailing tech companies and the drivers who delivered the tech company product while carrying the financial and operational risks.

“So why are you striking again,” I asked the driver. He told me that the last strike had ended up with a memorandum of understanding (MoU) between government officials, the ride hailing companies and the union of the cab owners. The aim was that a framework would be designed that captured what the official per kilometre charge was, which would be used as a benchmark for pricing across the ride hailing companies.

This would then provide a transparent mechanism for determining how to share out the deep discounts that the ride hailing companies were giving to customers which were allegedly being borne by the drivers whose costs remained flat regardless of any discounts being given. The MoU had never made it to the light of day.

If you were tracking the news at that time in June 2018, you’d have read that Taxify and Uber non striking drivers were being stopped, passengers violently being pulled out and, in some extreme cases, oil was being thrown into the vehicle’s interiors to make further use impossible.

The irony of the violence was lost on the cab drivers who, in February 2016, were having their own vehicles burnt by the mainstream taxi drivers that had been disrupted by the active take-up of Uber by customers, relieved to be paying half the prices and getting a convenient service at the click of a button.

The disruptors had met ugly and violent resistance from the disrupted and were now turning that violence onto themselves.

Anyway, I boarded a flight to Johannesburg and went straight to my hotel. The next morning, I called an Uber cab to pick me up from my hotel in the Sandton area. The driver showed up, and promptly asked me to put my bags in the boot of the car and to sit in the front passenger seat. Why, I asked. “Uber and Taxify drivers are on strike. I am not supposed to be picking up any passengers.” Now my full Kenyan-ness checked in. What if we got stopped and I got pulled out? What would happen to my laptop? Had I backed up my data? We were headed to Maboneng Precinct in downtown Johannesburg’s central business district (CBD) and that, I can assure you, is not a visit to the Vatican City. Mr Owethu the driver watched all these questions play out in my mind and gently guided me into the car. “Madam, don’t worry, my car is a Kia Sorento. Uber cars are usually Toyotas. You will just look like my wife,” he chuckled and shut the door.

He then called a colleague to ask what the situation was in the CBD. It was safe for now. was the terse response, all that the striking drivers were doing was to lean into the cars of offending drivers and grab their phones with the ride hailing app. No passengers were being attacked. Mr Owethu removed the phone with the app from its dashboard holder and slipped it into his pocket while I slipped my passport and credit card wallet into my back pocket as each of us concealed our critical items.

We made it to our destination safely but it became manifestly clear that the problem I had left in Kenya was not an isolated problem. It appeared that the ride hailing companies had a different penetration strategy for Africa which did not prioritise partnering with their drivers. What was also manifestly clear is that technology now permitted the communication of mass action across borders.

The drivers in Nairobi and Johannesburg were striking simultaneously for the exact same reason: a better share of the proceeds from each trip and upfront engagement regarding discounts and incentives given to customers but whose impact was solely borne by the drivers.

The exploitative nature of the ride hailing product is the ugly side of the disruptive technology. As I heard someone mention recently, the aim of this technology was never to grow wealth for the drivers but was to lay the foundation for an eventual driverless ride hailing experience.

If this theory is true, then the African market requires some deeper strategic thinking. The disruptors are willing to fight for their rights. Sadly, the customer at the end of the day will become the victim of these wars either via higher prices or simply no ride hailing services at all.