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Ever since Uber launched five years ago, it has become synonymous with disruption—and, more recently, with controversy. Photo: Reuters
Ever since Uber launched five years ago, it has become synonymous with disruption—and, more recently, with controversy. Photo: Reuters

Choice versus control

Anil Padmanabhan on how the optimum use of services such as Uber will depend upon how we manage the tension between choice and control

Last week, pursuing my insatiable appetite for watching crime-related serials, I stumbled upon the third episode of CSI: Cyber. It was a take-off on Uber, the revolutionary, popular yet also increasingly controversial taxi-hailing service.

In this episode, just as the viewers settle down to the routine of busy office-goers in Boston seamlessly using the ZoGo (the Uber equivalent) app for hailing cabs and getting dropped off at their respective destinations, drama strikes. Business executive Cade Mathews boards a cab identified by the ZoGo app. Unfortunately, the driver happens to be a serial killer on the lookout for his second victim—Mathews.

Apart from the fact that the episode makes for compelling viewing, it also brings to mind a fundamental issue: choice versus control.

In this case, the taxi driver exploited the anonymity factor associated with the taxi-hailing app to target an innocent victim. This is because the matchmaking between a taxi driver and a passenger is done automatically—using an algorithm—unlike the conventional model, where the service is accessed through an intermediary. The app connects taxis and passengers using their GPS locations.

Ever since Uber launched five years ago, it has become synonymous with disruption—and, more recently, with controversy. Overnight, the American firm, through its app, enabled anyone to operate a taxi and linked them directly to passengers. It was a very revolutionary concept that took off, spreading to nearly 50 countries.

As The Economist put it in a piece published last year: “The network effects in the taxi-app business are strong: as a firm recruits more drivers, this reduces pickup times, which attracts more passengers; this in turn attracts more drivers, since they get more fares on each shift."

Copycats, employing the same model of disintermediation, flourished across the world and it was hailed as a massive victory for consumers. The same model has been employed by Airbnb in the hospitality business. Using their app, anyone can list their space and a customer can book accommodations anywhere in the world. (A colleague recently used this app to plan a 10-day family vacation in Turkey and swears by the service.)

This is till a Mathews-type episode hits the service. (We had a similar episode in India recently, when a Uber cab driver, Shiv Kumar Yadav, was accused of raping a 27-year-old Delhi-based woman executive; thereafter, the Delhi government banned Uber cab services.)

Overnight, questions about the onus of responsibility have arisen. Since anyone can operate a taxi and similarly any passenger can avail of it, ZoGo (the fictional cab company in CSI: Cyber) is merely a match maker.

That’s exactly what the company’s executives tell the team of investigators from the Federal Bureau of Investigation seeking to hone in on the errant driver.

The fact that the serial killer is also a very proficient cyber hack makes the task of locating the driver that much more complicated (and the drama that much more watchable).

Critics of the Uber model have argued that this is why the previous licensing model existed—they served to verify a driver’s credentials. But this is a rather disingenuous argument. For one, prior to Uber, there was no option to licensed cabs. Second, it is the arrival of the ubiquitous smartphone—itself a recent invention—together with the almost universal broadband availability that has created the enabling environment to launch a Uber-type service.

Addressing the company’s employees on the fifth anniversary in June this year, Uber chief executive officer Travis Kalanick said, “Five years later, those original 100 friends and 10 drivers have become tens of millions of people in 300 cities across six continents. Every single month, Uber is adding hundreds of thousands of drivers around the world. Already, there are over 26,000 drivers in New York, 15,000 drivers in London, 10,000 in Paris, 42,000 in Chengdu and 22,000, of course, here in San Francisco."

And this is for a reason. As a consumer, services such as Uber and Airbnb have empowered me in an incredible way. It is very similar to the sense of empowerment associated with an ATM. The disintermediation of the vital transaction of withdrawing money from my bank account from anywhere (roadside, supermarket, residential locality) and any place (India or abroad), has not only saved me enormous time, but has also spared me rungs of inefficient bank bureaucracy.

But there is an inevitable trade-off between choice and control. Too much control means limiting consumer gains and too little means being exposed to a potential Cade Mathews-like episode. At the same time, you can’t wish away disruptions such as Uber and Airbnb. Eventually, optimum use will depend upon how we manage the tension between choice and control.

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