The ongoing strike in Mumbai by taxi drivers and auto rickshaws, protesting against taxi and rickshaw booking apps like Ola and Uber, is only a part of the broader trend of a push-back from incumbent offline businesses against potential digital disruption. We're seeing this manifest itself in multiple industry segments, whether it is about online versus offline retail, telecom and ISPs versus Internet companies (read this and this), and now taxi and auto rickshaw services versus taxi booking apps like Ola and Uber. Many of the traditional businesses have been built with large barriers to entry, higher cost structures, and high regulatory compliance costs. Online businesses, which are disrupting these, benefit from: - Greater economies of scale, which allows them to operate with lower margins per transaction - Better and newer technology, which allows them to lower costs of transaction - Ease of use, which helps them attract consumers - The facilitation of competition (and lowering of prices) through greater participation of smaller players. It's fairly evident that consumers are increasingly becoming comfortable with online alternatives, even through many of these are imperfect substitutes for their offline counterparts, or merely aggregators of fragmented offline businesses. With time, we'll see the following types of complaints or moves from traditional businesses: 1. Seeking regulation of online businesses: we've seen this from telecom operators, when asking for "same service same rules" from Internet companies, even though online messaging and calling aren't exact substitutes for their telecom counterparts. Regulation is sought on the following grounds: a. Impact on employment: The submission…
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