The Swiss psychiatrist Elisabeth Kübler-Rosswas a pioneer in near-death studies and the author of the groundbreaking book On Death and Dying (1969), where she first discussed her theory of the five stages of grief.

These stages inspired Professor James Cooper (International Professor of Urban Transport Regulation at the University of Missouri) to apply them to the latest developments in the taxi industry, now in different stages of competition with ‘apps’, or rather Transportation Network Companies (TNC’s). This presentation was given on November 8, 2014 at the 6^th IRU Taxi Forum in Cologne and seemed to leave its audience if not bewildered, than at least somewhat depressed….

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Future Grief: the rise and rise of the Transportation Network Company

James M. Cooper – Taxi Research Partners Ltd.

It has long been of interest to me as to how the taxi market has changed and, until about 2 years ago, how modern and advanced a science it had become, and well equipped to serve. We understood the market, could define the impacts of changes to income from fares, predict demand and match supply, intelligently. If I was writing this five years ago the main theme might well have been how some cities appeared better at providing accessible vehicles than others, and how some were reviewing the market and making informed choices based on real data, rather than that other, made up kind.

But now I have to stand back and ask, can I say the same today, really? What has happened? The second question being rhetorical as we all really know that the market has fundamentally changed with the emergence of the Transportation Network Company, TNC; or Uber and Lyft if you want a name in the frame. Yet what really puzzles is the reaction of the traditional industry, which feels to be somewhere close to the willingness of a lemming to bury its head in the sand (or was it to jump off a cliff?) rather than work on a market-led response that might see the survival of the traditional industry. An industry, by the way, that I deeply care for and that has been the subject of my analysis for around the last 15 years. Here I am sure that many will disagree with me, whether it is because they have and continue to operate within the law offering great service or, for some, be it simply the fact that sand distorts sound.

So what am I really talking about? Well let me as plain as I can… The market has changed, continues to change and will present more challenges. To continue in this market we all need to change, to change fast, and to change now. Many of the certainties of the traditional market have gone for ever, as have the nice structures that supported them. This is as much a challenge to the regulator as it is to the taxi company, as both need to develop, to serve the public, after all that is all we were trying to do in the first place, right?!

I will often make reference to the Kübler-Ross model of the stages of grief, hence the nod in the title. An evolution in thinking in the treatment of grief associated with imminent and unavoidable death. Not that I think the traditional taxi industry is dead, but in need of a bit, okay, a lot, of moving. The Kübler-Ross model observes distinct behavior patterns in the process of coming to terms with grief, from Denial, through Anger, Acceptance, and Accommodation. How closely the traditional industry and its regulators fit is frighteningly close, and needs to be progressed at speed as the only genuine market solution lies at the conclusion of the process, and many lie stubbornly at the beginning. Here then the stages and some commentary.

Denial: The refusal to accept the new market, in the taxi industry associated with the turn of phrase, “Uber is not a competitor”, or, and slightly more concerning, “my city’s laws are better than those of other cities and will protect my interests.” Really?! You need to be really sure of this of this is as far as you take it, and the evidence is against this as city after city disprove the protections suggested. Regulators are, after all, charged with protecting the publics’ interest, not that of the taxi company, of which more later.

Anger: Probably the most understandable of the stages. The traditional industry has broken no rules, after all, and continues to offer correctly licensed, protected and insured services, in the face of a new entrant that appears not to. Yet, and ironically, the moves to take legal action against the extremes of the newcomer appear to be the most counter- productive. Rules designed to protect the customer and its suppliers against market failure, appear outdated and counter-intuitive. Moreover, as the public appear to line up in favour of more market choice rather than less, the political aspect of the taxi trade appears to be working against the traditional suppler. On a side note, a review of regulation should not result in a loss of controls, simply their review and tuning fit for purpose. A market which is rampantly uncontrolled, or controlled by the supplier alone, is as far from appropriate as any alternative that enforces a closed market.

Depression: This is the third stage in the model, and there is little positive I can say. I feel for the market, I genuinely wish to support and nurture this wonderful service that does so much for the public in any metropolitan area, town or village. So with humility, stay with the belief. The service you offer is worthwhile, is appropriate and will continue. Do not move out, move on.

Bargaining: If we can’t beat them join them? Well no! TNCs have a specific role in the taxi market, but they are not the taxi market, just part of it. Taxis have a unique and important role, and it is the realization of the differences that will sustain the future taxi. This needs change, yes. This needs new thinking, yes.

Accommodation: This is the final stage in the Kübler-Ross model. Where the market expands, as it has and will, the market reflects derived demand, the choice to use transport to facilitate other enterprise, but it is not a fixed demand that chooses either taxis or TNCs. It is a market made up of all transport modes, all activities and reflects the cost relationships in all. As the taxi market becomes easier to use through TNC and taxi company apps, and the fare adjusts to reflect the changes in cost structures, so too will it expand.

Anomalies of extreme medallion values, a market value created on the base of a limited supply, will adjust and will eventually reflect marginal value, and the actual values of the market will follow. So too will innovation, already seen in the increasingly complex offerings of smart TNCs and equally smart taxi companies, those who have made it to the conclusion of the Kübler-Ross model. Smart tools, increasing information passed up the chain to the taxi companies will reduce incidences of low supply, provide smart schedules and new service types.

So we almost conclude on a high note. Really? Well yes, potentially! Any warnings and worries? Yes, and too many to list. Regulation is a requirement, not an optional extra. Regulators need to continue to protect the public. Check the rules, test them, make them fit for purpose, and continue to ensure that services are reported, available and devoid of market abuse, by any.

But in conclusion, those who are able to move through the stages, fast, while market responses are possible, will survive and thrive. On a final note, this is not the first fundamental change, nor will it be the last. If the taxi market had not innovated or caught itself on in the past, we would still be asking for faster horses.

Prof. Dr. James Cooper