What thousands of angry cabbies mean for your investments

London taxi strike © Getty images
London’s cabbies: fighting a losing battle?

When Amazon first hit the market, it was met with fury from traditional bookstore retailers. But Amazon CEO Jeff Bezos was robust: “Amazon is not happening to book selling; the future is happening to book selling.”

He went on to infuriate his critics by speaking the obvious truth: “Complaining is not a strategy.”

Last week’s chaos – in which thousands of angry cabbies clogged the streets of London – showed that people still haven’t really learnt this lesson.

If you’re not aware of the furore, it centres on a mobile phone application called Uber, which brings you a black cab-like service via your mobile phone. The problem? It’s stiff competition for black cabs, and they’re not happy.

The cabbies effectively went on strike, which only brought Uber out onto centre stage. Demonstrating that “there’s no such thing as bad publicity”, sign-ups to Uber’s service were up 850% on the strike day.

This Uber episode is proof that pushing back a tide of change is not easy. But vested interest groups constantly try to, by attacking start-ups and new technology innovators. Sometimes they even win.

Why? Let’s take a look.

A relic of the past?

Now, I can totally see why many black cabbies are angry. They’ve studied hard. They’ve done ‘the Knowledge’. They’ve shelled out on their cabs and licences. And after all that, some upstart with a sat-nav and a smartphone comes along and muscles in.

But let’s face it: the industry has been hopelessly slow to adapt. How many years have we had sat-navs? How long have these guys had to adapt to more efficient delivery mechanisms? So why haven’t they?

Black cabs, as they stand, simply don’t fit in with modern cities. They sit at ranks taking up valuable space, spewing filth into the air. Or else they’re ‘doing the rounds’ touting for trade. Again, needless miles and pollution.

And while we’re on the subject, why should these guys take VIP status in our bus and cycle lanes? I’ve cycled tens of thousands of miles on London’s streets and I’ve got to say, black cabs were the most aggressive drivers on the streets.

The cabbies complaining about Uber are on a hopeless errand. Rather than trying to block Uber, they should be adapting to it!

It all reminds me of another vested interest, trying to stymie an even more important development…


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Taking on the vested interests

Let’s look at the case of Tesla Motors, one of my favourite ‘creative destruction’ businesses. That’s the jargon for a new idea or concept that kills off what went before it. In this equation, Tesla is like Uber – the upstart with new ideas. CEO Elon Musk’s vision is that the world must move to sustainable energy and zero-emission vehicles.

And like Uber, this is a vision under constant threat from all sorts of incumbent parties. From the petro-industry to the car dealerships, Musk faces new battlegrounds every day. In several US states, lobby groups have even managed to thwart Tesla’s operations entirely.

But just like Uber will probably win the day, so will Musk. Here’s a guy who not only wants to make the world’s fleet of cars better and more efficient, he also wants to sell directly to the public, cutting out costly dealers. A veritable win-win for society at large, surely?

Well, Musk isn’t letting anything get in the way of realising that vision. He wants electric vehicles no matter what. That’s why he took the whole industry by surprise last week, announcing he’ll liberate much of Tesla’s patent library for anyone to use.

To hell with the vested interest groups! The future is the future and it’s coming with us.

An electric future

Well, far be it from me to stand in the way of progress. That’s why in recent Right Sides I’ve been arguing that the lithium-ion batteries needed for Tesla’s electric cars could be an excellent long-term investment.

Despite a near-constant stream of news about new battery technologies, these things change very slowly – and even new battery technologies tend to involve lithium as a key ingredient.

So I’m confident for the future of lithium-ion batteries. That’s why, on Friday, I’ll be providing an update on my favourite way to play the lithium story. There’s plenty of exciting things happening with this one, so stay with me.

As for the cabbies, my advice is this: think long and hard about the future. Mobile phone apps and satellite navigation are only getting better. Maybe soon we’ll have driverless electric cars and pooled cars – just like Boris bikes, they could be everywhere.

At the end of the day, the future is happening, whether we like or not. From my point of view, it can’t come soon enough – change is afoot, and here in the pages of The Right Side, we’re going to hunt down the best ways to profit from it.

Watch this space.

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2 Responses

  1. 19/06/2014, colinthecabby wrote

    Bengt,you really need to get your facts right–the taxi trade has always kept up with technology,we all have sat nav or an A-Z on an App it aides us but cant totally do the job-ask any driver,we have all had minicab drivers pull up asking us where somewhere is to be told where we think they should go.

    We have had competition for over 50 years and compete,or is it you want the job another minimum wage one-make the driver struggle to earn a living but don’t worry the tax payer can top his money up i will cream off the top & pay my tax elsewhere.

    Our problem is many fold but the demo was about Tfl not uber they where just the straw that broke the camels back,you just need to take the time to read what that company are all about–it may change your mind & with all the other issues associated with it.

    I like many of you want to make investments & have a return,i don’t believe in a dog eat dog world only a fairer one & hopefully one that investors can have fair returns on not one that screws others for a greed of profit.

    With all respect Bengt i think you really need to read the facts??

  2. 22/06/2014, Texas Pete wrote

    As someone who cycles in London most days I have to disagree on one point. I don’t usually have problems with the cabbies (no more than with most other users), it’s usually mini-cab drivers I have to watch out for!

    I don’t personally have a problem with new tech-based challengers with low emmission hybrids competing in the cab space but do feel higher driving standards should be enforced than rolling up straight from the airport with an international licence ready to inflict injury and chaos on other road users. From that perspective I can see where the cabbies are coming from.

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