As part of our Badge Challenge earlier in the year, we gave a Community member the opportunity to submit a post and have it featured across the CHOICE network, including in the CHOICE magazine.
Challenge winner @phb submitted the below on Digital Disruption, read it below and be sure to leave a comment!
What is digital disruption?
While the term digital disruption is a reasonably newly coined word, to a consumer it has been around for at least 25 years, when the internet became more mainstream. In reality, it has been around a lot longer than that, and possibly since computer systems or new efficiency technologies were adopted by large institutions (such as government and the financial sector) for the management of data and its processing.
So what is digital disruption? Techtarget.com defines digital disruption as “ the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services ”. In simple terms it means there is an expectation that adoption of digital disruption will lower the price consumers pay for traditional goods and services.
Is it all good?
As a consumer, I initially thought…wow, digital disruption sounds wonderful and anything that delivers the same goods and services cheaper is a great thing to embrace.
Overtime I have realised that the initial media and marketing hype associated with digital disruption have have been overheated. With a background of thinking outside the status quo and challenging new concepts and ideas, I quickly discovered that there are many negatives, along with the positives, associated with digital disruption. These impacts are often overlooked on the technologies adoption or result from its adoption.
Internet and Voip
Take high speed internet and VOIP (voice over internet phone). While such technologies allow for very cheap (almost zero cost) phone calls, the same technologies can also be exploited by criminals to prey on the less fortunate with incredible ‘promises’, to encourage them to part with their hard earned cash. While I have embraced the internet age, one of the negatives which I find highly repugnant is the access scammers, con artists and spammers now have in my life. And how it disrupts my own amenity and enjoyment of the technology.
Pre-internet and pre-VOIP, one would receive unsolicited marketing material (e.g. Reader’s Digest) or chain letters in the post. Postage was relatively expensive and outside the affordability of most scammers/con artists. One only knew of scammer or con artists through direct face to face contact or reading the newspaper.
How times have changed and now they can easily enter our lives through cold calls or through scam/scam emails. Very cheap/free foreign VOIP calls which often appear to be an Australian caller, are the main tools used by scammers.
It appears the government/regulators and technology industry is lost in relation to how to deal with these new incursions into our lives. Focus seems to be more about awareness and reporting/recording rather than solving the problem. I do look forward to the day that there is new digital disruption technologies which correct the impacts of the existing digital disruption (internet and VOIP).
Private Taxi Industry
Another example is ride sharing industry or what I prefer to call the private taxi industry. It is incredible that is one takes a taxi to the city it costs in the order or $40, while a private taxi driver will do the same trip for almost half the price. While this terrific saving to consumers like me, do all those in the supply chain benefit from the $15 saving? Unfortunately no.
If we ignore the decimation of the highly regulated taxi industry, the private drivers also lose out. The price structuring for these private taxis are based on ride sharing, that being where one make a pre-planned trip (say to the airport), one matches up with someone else also wanting to go the same destination at the same time. One picks up this passenger who through the billing system contributes to the running costs of the vehicle travelling to the destination.
This was what was sold to differentiate ride sharing from a (private) taxi. Has this happened? No. Drivers tout for paying passengers through the digital platforms and make special trips to take the passengers to their requested destination (just like a traditional taxi). Hence why they are private taxis.
Most private taxi drivers work long hours with payment set not through regulation, but a multinational companies whose interest is to maximise patronage and profits without considering the needs or interests of the drivers. Do I take private taxis…no…and the reason I struggle to support an industry based on false pretenses and where drivers invariably will earn below the minimum Australian wage (or in many cases, nothing). If the private taxis became ride sharing, by its true meaning, then I would more likely to endorse this digital disruption. Until this occur, I am happy to stick to traditional forms of transport.
There are many of these short term accommodation platforms available in Australia and worldwide, from hotel type search engines, AirBnB/Stayz to those around house-sitting/house sway. Unfortunately, like every other form of digital disruption, these have created unintended consequences such as reduced the supply of affordable long term rental accommodation to locals.
Some of short term private accommodation platforms were originally developed to allow one to rent out a bedroom or ones own house for a short time say when on holidays, to make a little extra income. Today and due to their market creep, these same platforms market vacant houses for short and long term accommodation and compete directly with the traditional real estate rental market and hotel/motel/B&B type accommodation providers.
Do we use them…yes…we use one type of these platform regularly. These being the private listing accommodation ones like AirBnB and Stayz. We use these mainly because other options (such as the traditional real estate short term holiday lets) don’t really exist any more pushing one to use alternative methods. Also with a small family, it is often difficult to find adequate hotel/motel/B&B accommodation which suits our needs (larger apartment style which has kitchen, laundry etc).
We have used AirBnB in many countries and find it useful, efficient but not necessarily the cheapest form of accommodation available. We are also about to use it for the first time in Australia, where in the past we have only used Stayz. We have been happy with these platforms as we have been able to better find accommodation which meets our current needs. We also don’t solely used these platforms as we also compare their options with traditional motel/hotel style accommodation available in the same locality. When we travel, it is usually a fusion of platform and traditional direct contact style booking. We have also found that direct booking often we seem to have better rooms, have breakfast included in the room rates and/or cheaper room rates.
While I search using hotel type booking platforms, I don’t take notice of their marketing hype , namely being the cheapest price. In reality one can get far cheaper rates by directly contacting other unlisted accommodation providers, or the same listed accommodation. Often discounts or cheaper rates are given by direct contact as the provider does not have to pay the substantial advertising fees/booking commissions to these platform. It is also worth noting that many of the terms and conditions of these same platforms restrict the prices a accommodation provider can display on their website, it has to be consistent with the platform pricing so as as many bookings as possible occur through the platforms. I wonder if this is uncompetitive trading practices to the detriment of the consumer? On a side note, doesn’t this go against the ethos of digital disruption by providing the same product or service cheaper?
It is worth noting that these booking platforms don’t have links to the accommodation provider websites or their contact information (until after booking is confirmed)…this is so one doesn’t side step the booking platforms and deal directly with the accommodation providers. These however can readily be found through internet searches or though business listing type websites (local government, local tourist associations etc). It does pay to contact an accommodation provider directly.
Is it all bad?
My view on digital disruption is far more cautious than my first reaction over a decade ago. I am now not so sure it is necessarily a revolution in the best interests of a consumer like me as it has pitfalls which should be fully understood before adopting. The premise that products and services will be cheaper than traditional forms of supply hasn’t eventuated in all cases, and there are many intended consequences of this disruption to the consumer or those involved in the product or service being provided.
As a consumer that has the right to make my own choices, I will continue to investigate, or maybe better to say interrogate, new emerging forms of digital disruption and determine if it is in my interests for its adoption. I will weigh up what it means to me as well as those involved in the supply chain and process.
Like the examples above, I may have no choice in its adoption (like internet/VOIP), but where possible, chose to use when it is the better option for the supply of the product and service (like some of the accommodation platforms). Others I will avoid unless the technologies and business models change so that the disruptions does not disadvantage me or other involved (such as the private taxi industry).