Message from the editor
A reminder that history repeats itself as technologies change, from Luddites to Uber.
In the days of eighteen and one
Peggin’ shoes was all I done
They invented a new machine
Prettiest thing I ever seen
Pegs a hundred pair to my one
Peggin’ shoes it ain’t no fun
Throw away my peg, my peg and awl
—Traditional folk song
In the marketing world, “disruptive” has quickly become a buzzword, still carrying some of its game changer meaning but starting to get watered down as a synonym for “incrementally better” (much like how things described as innovative rarely are anymore).
But by its very definition, “disruption” is more of a negative than a positive. Various dictionaries will define it by words like “disturbance,” “problem,” “interruption,” “commotion” and “disorder.”
As this issue of Sway goes to press, the news is filled with stories of how ride-sharing technologies—Uber in particular—are truly “disrupting” the taxi industry as we know it.
So, who benefits from these disruptions? While consumers are enjoying the convenience of faster pickups, cashless payments and carpooling options, insurance companies are scrambling to offer coverage for ride-sharing platforms. City councils are rushing to figure out the legalities. And cab drivers have been protesting, sometimes violently, against the real threat to their livelihood, citing a lack of inspections, security checks, insurance, licences—all factors that help drive up the costs of “real” cab rides.
Commonly used to refer to a person who is (usually proudly) behind the times where technology is concerned, the word is actually more apt than you may think. “Luddite” originally referred to English textile workers who took part in (among other things) violent attacks on industrial equipment from the late 1700s to the early 1800s. How violent? Considering that there were death threats, military intervention and at least one assassination, it’s clear that these folks saw the attack of Industrial Revolution technology on their livelihood as a matter of life and death.
Today, we’re once again living in a time when new technologies have come along with a speed that has outpaced an industry’s ability to adapt to and absorb the advances—with similar results.
As marketers, we understand that disruptive technologies are part of what’s so thrilling about living in today’s Digital Revolution—they are true game changers, with a lot of money at stake.
According to “The Sharing Economy” report by PwC, the sharing economy earned $15 billion in revenue in the US in 2015 (in only five sectors: travel, car sharing, finance, staffing, and music and video streaming); by 2025, that number will rise to an estimated $335 billion per year.
The report highlights industries such as hospitality, saying that to “grasp the scale of disruption posed by the sharing economy, consider that Airbnb averages 425,000 guests per night … nearly 22% more than Hilton Worldwide.”
Uber, for its part, is valued at more than American Airlines. And it’s only about five years old.
The sharing economy is a tremendous way of shifting money from the hands of big businesses and into the hands of smaller entrepreneurs—or at least that’s the promise. Some advocates for Uber have even started referring to “Big Taxi” as a shorthand for the bloated licensing requirements, high fares and general stranglehold that the established cab companies have on the industry. But increasing uptake also means increasing horror stories, from uninsured Uber cars to homes trashed by Airbnb guests. Other market watchers are wary that companies like Uber and Airbnb aren’t really about “sharing” at all; these are for-profit brokers of services and collectors of data—who are able to make money without assuming all of the risks of doing the business themselves.
Most consumers, seeing convenience and savings, are ignoring the potential downsides. According to the PwC report, “for all the buzz in the press about exploitation of workers, this was barely on the radar of those we surveyed—only 11% of consumers we surveyed felt this was happening.”
Smart companies will figure out a way to survive amid the disruption. Mercedes has already come out as a front-runner in the ride-sharing economy with car2go, which uses the company’s Smart cars exclusively. Enterprise, the car rental agency, has also branched out with its CarShare service in major urban centres.
But will smaller entrepreneurs, like taxi drivers, be able to survive? Lacking the resources and sophisticated marketing know-how of big companies, it’s likely that their protests won’t amount to much. As we watch history repeat itself, it’s a sad reminder that when a technology is truly disruptive, not everyone is able to come along for the ride.