The Digital Evolution - Stuck in the Middle

6 April 2018

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Yesterday on returning from an out of country engagement, I caught up with Mr Vijay a long standing cabbie who has been plying my family and I to and from the airport over the past many years. Before too long the conversation turned to the impact that Grab and Uber has had on him and I believe, on most of the taxi drivers within Kuala Lumpur.

The 5 take-aways I gleaned from our 55 minute journey were:

1) When Grab came to the table several years back they immediately disrupted the radio cab business by bypassing the need to have a radio controller to monitor and despatch pickup jobs to various cabbies who were in the vicinity. This meant that not only was there an opportunity for the cab company to make savings on the rental of the radio band that they were using, but importantly there was the opportunity to connect the driver directly to the passenger themselves and so reliving the cab company of yet another cost ie the cost of the radio controller and the associated radio equipment that came with such a service.

2) What then happened was as expected vis the evolution of the digitalization of the process of providing taxi services ie. connecting the passenger to an address and this then meant the linkage of the passenger to a digital map and to some sort of digital way finder eg Waze. The next evolution of the application led to the direct connect of the passenger to the driver by way of a phone connection. With this done, there was no longer the need for the intermediary cab company. Instead Grab and Uber were now able to offer its services directly to the passenger as alternatives to the traditional cab companies in Kuala Lumpur.

3) To a large extent and even Vijay agrees to this hypothesis, the cab companies within Kuala Lumpur were largely complacent and totally unresponsive to the demands and changing needs of the passengers. This left a huge gap in the market place for professional cabbies who saw his/her work as being important and fundamental to the very fabric of the society in the city. And as in any capitalist society, where there is a gap to be filled and money to be made, a business comes to do just that and voila, the story of a digital cabbie application.

4) From Vijay’s perspective, as an authorised, duly certified taxi driver he is obliged to follow the tariff rates that have been provided for by the local Authorities. He believes that these tariffs rates whilst being well intentioned by the Authorities, are higher than those being provided by the Grab drivers. And therein lies yet another issues of price competition. Alas he and others like him are in no position to amend the tariffs accordingly. 

5) Admittedly Grab and others of its kind have provided tremendous opportunities to many in the work force to supplement their monthly earnings. With this, cabbies like Vijay are now being pressured by an alternative taxi driver workforce which was almost unheard off only 3 years ago. 

SO WHAT DOES THIS MEAN TO US...

If this is not an example of the digital economy playing out at the most common level, I honestly don’t know what is. Whilst there is much talk and tremendous pontificating about the proverbial “7 Mega Trends”, the so called “5 Must Win Battles”, the “3 themes that will drive the Nation forward” and the impact of AI on our workforce and everything in between, including intensive tech training and big data analysis and the like, what truly concerns me is how does someone like Vijay and those like him whether they be cab drivers, book keepers, copy writers, those working in publishing houses or even bank tellers for that matter earn a living in the future that is fast unfolding before us.

The Social Media, the publications from noted consulting firms as well as this very platform of LinkedIn is a buzz on almost a daily basis with terms such as digital transformation, digital evolution, block chain crafting and the creation of high income jobs etc. But honestly, when push comes to shove, what does that mean to the majority of the common folks like Vijay the cabbie and to a proverbial Pusan Aishah and Madam Tan the mobile vegetable sellers who go on their rounds to the various housing estate selling fresh fruits and vegetables on a daily basis. Not everyone is able to play in the block chain space nor do they have the mental aptitude, the resilience nor the access to funds to enhance oneself through skill upliftment.

Almost 55 minutes after we started our drive from KLIA, we had arrived safely at my residence and Vijay parting words were ... “Sir, the life as we know it has changed, and for our families sake, we must make changes to keep ourselves alive... But I just don’t know what to do.”

AND that in my mind is the reality that exists for all of us who are being impacted by this ever increasing rising tide called the Digital Economy.

By Taranjeet Singh, CEO of Quantum Steppe Advisory. Taranjeet has returned to Malaysia after living and working in Central Asia for the past several years. He can be contacted at www.quantumsteppe-advisory.com