Thursday, June 07, 2007

Trouble in TaxiLand

So Avis is now offering a nifty new service. In a test program in 10 major cities, you can book—are you ready for this?—a chauffer with your rental car. In fact, as long as you give Avis 24 hours notice, you can actually have a chauffer pick you up at the airport in the car that you’ve rented. Avis is teaming up with WeDriveU, a San Mateo, California-based company which has been supplying chauffers for companies for two decades. The price? An additional $30 an hour, with a three hour minimum. Pretty cool. Innovative. Groundbreaking. Very nice feature for customers who choose to partake. What tickles me the most is that after the minimum three hours, you can dump the driver and continue driving the rental car yourself! Of course, the entrenched players in the taxi and limousine industries have gone ballistic on Avis, screaming “foul”, “unfair”, “illegal”, take your pick. That’s not surprising. I’ve often told my clients that they’ll know when they’ve truly been innovative when customers are delighted and competitors are furious. But what intrigued me was how predictable the immediate response of the traditional livery transportation companies is. Instead of huddling managers together to figure out how to one-up Avis by improving the customer experiences provided by taxis and limos (better and newer eservices, more options, faster response-times, more flexible pricing, better use and availability of new technologies, etc. etc.), they’ve resorted to the tried and true loser of a strategy: run to the regulators and the lawyers. Anything to stop Avis and preserve the comfy status quo. It’s an all-too-common kneejerk response: In the face of innovations from an “outsider” (which is often the case), throw your weight with regulators and lobbyists-- like Big Steel has done. Or invest in attack lawyers--like Big Music has done. The result is inevitable decline. To be sure, companies must aggressively litigate when competitors do something blatantly illegal. And they are prudent to support professional associations that exercise political influence on their behalf. But when they rely on political and legal force for competitive advantage, they are doomed. Emphasizing legal and protectionist strategies drains a company of the vision, resources, and urgency to challenge and reinvent itself in the face of new competitive realities. In today’s global free-market environment, trying to build a legal and regulatory fortress to protect the status quo is a fool’s gambit. You can’t manage for steady state any more. Value migrates forward regardless of whether you’re in the new game or not. Ironically, Avis’s new initiative might help build everyone’s businesses, including taxis and limos, if more customers start getting comfortable with the idea of letting someone else do the driving. But either way, the first salvos against the old order have been fired. Big changes are coming. As for me, corporations that invite me to speak at their conferences often send a town car to pick me up at the airport. It’ll be interesting if one day a mid-sized Ford rental sedan with driver will come get me. And it’ll be doubly interesting to see how I fit my 6 foot 6 inch frame into the back seat. Hmm, maybe I’ll take that taxi after all…..


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