I have a friend who ran a car service up to a few years ago. It was nothing fancy. She invested in a Town Car, had business cards printed, put up flyers and took out a classified ad
in my paper. Strictly an independent thing. She ran people back and forth to the airport–a pretty lucrative business on Long Island, lot’s of people do it.

She undercut the bigger companies and some of the independents and did OK. In the end, like many ventures, it turned out to be unsustainable. I look back on it now and wonder how things would have turned out for her if Uber or a similar business had come along just a little bit sooner.

Locally, there’s been a huge controversy in both Southampton and East Hampton towns between Uber and the traditional hometown taxi companies, which it seems are fighting hard for the business they’ve been losing to the independents working for Uber. East Hampton officials last year outright banned Uber drivers in favor of the local companies and in Southampton this year, officials decided to require any driver for hire to purchase a $1,000 annual license.

Obviously, the local companies have used their influence with the town officials to legislate the matter. But I wonder if they’re missing the bigger picture. Rather than adapt to the technology making the Uber drivers successful–and a threat, the companies continue to charge exorbitant rates (some say as much as $100 for a ride home form the bar on a Saturday night in the summer), keep people waiting for as long as an hour after calling for a cab, and turning to the old boy’s network to try to legislate themselves out of a jam.

It seems like a classic Innovator’s Dilemma to me. Refuse to change until it’s too late, while a new technology (the mobile app that allows Uber to get a car to a client in minutes, prevent overcharging and eliminates the overhead of running a garage full of cabs) comes in and lets someone take over an industry.

Uber and Southampton Town reached a compromise  yesterday–lowering the license cost to $250 for drivers, at least for the summer. Uber moves forward, and the taxi companies will, eventually, eat their dust.