Disruption Creates Larger Markets: Uber, Online Travel, and Transparency

Disruption creates larger markets. If we define disruption as “a change in the balance of market supply and demand,” then the new market created by disruption is much larger and better than the previous one; otherwise, that balance would not change. The beauty of disruption is that the opportunities far outweigh the threats. After Uber began disrupting ride-hailing, the market grew tenfold. In this ten-times-larger market, there is room for Uber, Lyft, Didi Chuxing in China, Grab in Southeast Asia, Cabify in Europe, and 99Taxi in Latin America. Today, the number of people using licensed taxis is three times what it was before Uber appeared. So although taxi companies around the world have tried to keep Uber out of their markets, the reality is that conventional taxis have gained more opportunity than threat. Online travel booking underwent a similar transformation, disrupting travel agencies. Previously, they could simply say, “Here is your ticket,” and that was that. There was no price comparison—how could there have been before the internet? Now there is. Transparency creates disruption more than anything else. Everyone can access information. Initially, people may worry that a company’s profitability will decline, but transparency often creates a market larger than before, with stronger demand. Some markets are simply crying out for disruption. These tend to lack information, suffer from information asymmetry, and be full of useless regulations. Think of markets where you do not know how much you have paid or what you are paying for. Healthcare services in the United States cost approximately fifty times as much as in Taiwan. This does not mean that U.S. healthcare is better; it is simply more expensive. Clearly, this is an industry that continues to cry out for disruption. TomTom CEO Harold Goddijn: “If your market can be disrupted, it will be disrupted.” The key question is whether you will be disrupted along with it or benefit from the newly expanded market. #做難而正確的事 [Do What Is Difficult and Right] ---- Robin: “Disruption—or rethinking and shaping a new industry narrative. Uber, Airbnb, and others repackage the narrative of a traditional industry and create a larger market and more value.”