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Uber is helping shape the future of urban transportation, says IMD prof

IMD Professor Reacts: Cyril Bouquet on the arrival of Uber in Swiss cities

January 30, 2015

Uber recently launched its services in a number of Swiss cities. The company held its Lausanne launch event on IMD's campus. Cyril Bouquet, Professor of Innovation at IMD, gave his vision of Uber's role in shaping the future of urban transportation at the event.

Extracts:

I think in the future, in five to fifteen years, most of us will get around in cities in shared driver-less cars. Uber is playing a role in shaping that future by showing us that we might not need personal cars to navigate urban landscapes.

Today a private car sits parked for 23 hours a day on average and a Swiss car owner pays an average of 11,000 Swiss francs per year to own the vehicle. Cities are getting more and more congested with personal cars and are becoming more and more polluted because of it.

Uber and the rest of the sharing economy are challenging the way we think about how we use our resources.

With UberPop, the company's car sharing service which it just launched in Lausanne, Uber has created a digital interface that allows people who need to go from one place to another to get in contact with people who can drive them there. The non-professional drivers are carefully selected and fully insured. The service provides a unique customer experience that is based on trust and affinities rather than pure commercial links. Car owners can maximize the use of their cars while sharing them to cover the cost of ownership. The Uber model provides a means of transport that can be quicker and more convenient than public transportation and less expensive than a traditional taxi service.

By making urban transportation more convenient and less expensive, Uber is making it less attractive for people to buy individual cars and could eventually reduce the number of cars on the road in a city. Fewer personal cars would make for less congested, less polluted cities. In this sense, Uber is contributing to making urban transport more efficient and responsible.

Much of the controversy around Uber has focused on its "war" with traditional taxis. In my view, Uber will not replace traditional taxis but the competition between the two will ultimately benefit consumers. Here in Switzerland, which has the most expensive taxis in the world, Uber's arrival has already forced taxi companies to start investing in more modern services like credit card payment machines. Traditional taxi companies should seize the arrival of Uber as an opportunity to reinvent themselves.

Instead of fighting change, taxi companies should draw inspiration from Uber, from features like its digital interface, or its flexibility.

Together, taxi companies, Uber and the whole sharing economy have a role to play in making our future more efficient, intelligent and more responsible.

Cyril Bouquet is Professor of Strategy at IMD. His major interest is the interface between organizational psychology, strategy and leadership. He teaches in the Orchestrating Winning Performance (OWP) program.



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