Uber: why cities must adapt faster to digital disruption

In 2012 Uber started operating in London with just 50 drivers.

A total 3.5 million app downloads later, on 22nd September this year, Transport for London stripped Uber and its tens of thousands of drivers of their licence to operate in London.

Uber’s story has been so often told and it’s easy to get caught up in the intrigues of Uber’s office politics and the drama of Uber’s street politics with the cabbies. But there is a bigger picture to consider.

Uber’s aggressive expansion is what forced the rest of the sector to embrace the digital age for their customers. Uber represents the disruptive force of digital technology overturning entrenched business models. In the process, companies like Uber and Airbnb change their industries and life for millions.

The speed of that transformation has taken governments by surprise. City governments are still grappling with how they can wield technology to improve their services – a process that takes years. In the time it takes to create and implement a technology strategy for a city, a company like Uber can establish 3.5 million customers in that same city.

This poses an obvious challenge – how can cities prepare for and regulate companies and technologies that move at the accelerated pace that digital technologies allow? And how can they do so without jeopardising the opportunities that these technologies offer for better services, economic growth and better quality of life?

The quickest and easiest response to this challenge is to slow the pace of change, or stop it outright. And this looks to have been the case in cities and countries around the world. In most cases, as in London, the issue is safety, and there it is hard to argue that citizens should not be protected. But this could easily slip into protection of vested and monopolistic interests.

Perhaps a better approach to the challenge is to do the work ahead of time – if we can anticipate the issues that digital disruption will bring, then we can put in place strategies and regulatory frameworks appropriate for them.

This is one of the conclusions from our forthcoming Global Review of Smart City Strategies, and is echoed by Nesta’s Geoff Mulgan’s call for anticipatory regulation.

Smart city and digital strategies for cities need to go beyond the familiar story of service improvement and citizen engagement, and start to consider the difficult questions of how to govern the cities undergoing rapid disruption. Doing this would ensure that citizens interests are continually upheld. At the same time, it would give businesses more certainty that they will not get burned by harsh reactionary regulation down the road. That might go some way towards mitigating the uncertainty that tech companies face in London with Brexit on the horizon.