The Paces Of Change
The times are a-changing, but at various speeds
by Michael Ganley
Have you ever had to stand in the cold, waiting for a cab? Ever call one and wait forever for it to arrive (or call one and never see a sign of it)? Ever wonder why there are none to be found on the busiest nights of the year: during office-party season, or after a big game or, heaven forbid, when you need one on New Year’s Eve?
Well, we have the story for you (“Fare Trade”). Unfortunately, it doesn’t have a happy ending – at least not yet. It has become a modern axiom that technology disrupts businesses and industries, that it has allowed new, fleet-footed players to gain a toehold in existing markets and unseat some of the older, slower veterans. In many cases, it has proven to be the case.
But technology, meet the taxi industry. A bevy of mangled interests and botched incentives have prevented this antiquated oligopoly from embracing the potential for improvement that technology offers. Brokerages make money from drivers paying stand rent, not from helping them get more customers; drivers avoid the busiest places (say Calgary’s Stampede Grounds) because they’ll make just as much from a fare elsewhere without having to fight the Stampede crush; regulators are “captured” by the industry; and the all-powerful taxi plates that underpin the system go for $150,000 apiece. These factors have combined to prevent technology – in this case some fairly simple apps using GPS – from disrupting the Calgary market. The good news is that the disruptors haven’t given up, and, really, that the change is inevitable. The only questions are how long do we have to wait, and who wins and who loses?
Another of this month’s feature stories also looks at change, this time in the form of social impact bonds, a relatively new form of agreement between governments, investors and social service providers that are designed to fund program that tackle specific societal goals, measure the outcomes of those programs and, if they perform appropriately (and save money), pay a return back to the investors. Some SIBs have been implemented in the U.K. and the U.S., but like the public-private partnerships used to fund infrastructure, there is a great deal of debate about the efficacy of SIBs. We take a thorough look at the issues in “A Good Investment”.