TECHNOLOGY has changed the way most industries function, particularly retail and media, but there are examples of the old fighting back through something technology cannot deliver: service with a human face.
The best example of a business clawing its way back from a near-death experience can be found in London, where the city’s ubiquitous black cabs are giving their upstart US rival, Uber, a thrashing.
It was a very different story the last time I visited London two years ago, when cab drivers were moaning about the Uber invasion and the devastating effect on their income.
Some cabbies were even forced to double-up, driving their black cabs in the morning and then switching to an Uber in the afternoon.
Several developments have changed that picture, starting with the cab operating company acquiring an identical app (called Gett) to that offered by Uber, complete with credit card payment and precise pick-up and drop-off programming.
Gett has been around for a few years but it’s now working seamlessly.
Its major difference to Uber is that cab drivers know how to negotiate the streets of London without the need for a satellite navigation system, because they have studied and passed ‘The Knowledge’ (a requirement since 1865 to know all London’s streets by memory).
While there was resistance from inside the industry for a period, the adoption of Gett shows even an old trade can embrace modern technology and make it better.
Other old industries are learning in the same way as London cabs. Shopping malls, which feared devastation from the rise of internet shopping, are reinventing themselves as community centres, or what could best be described as marketplaces.
Most publishers have also stopped fighting the technology behind electronic publishing to recognise that their value proposition is not the delivery process (screen versus paper) but the accuracy and relevance of what they carry.
Meeting the demands of customers with old-fashioned service is the common thread saving old industries from the tech invasion, and it’s a difference tech companies will find hard to match because they all suffer from the drawback of being too impersonal.
At some point, the realisation that people prefer to deal with other people and not a computer or smartphone might even dawn on bankers, hopefully before the last suburban bank branch closes and all transactions and complaints initiated in Perth must be routed through Sydney or Melbourne.
Crypto run
IF you can be bothered, spare a thought for the fool who paid $US67,000 for a Bitcoin six months ago to discover today that investment is worth 56 per cent less thanks to the artificial currency dropping to $US29,000.
True believers in Bitcoin, Ether, Solana, Tipple, Terra and Tether will reject those comments about cryptocurrency, which they claim will one day replace government-issued currencies.
Unfortunately for the crypto gang, the end of the era of ultra-low interest rates and the repricing of all assets represents a severe challenge for their business model, which earlier this month experienced an existential scare when Tether ‘snapped’.
In theory, Tether should not fall below the value of the dollars and other government paper it owns, which is why it is marketed as ‘stable coin’.
But it’s in the detail that the devil lies, because as Robert Armstrong pointed out in the Financial Times newspaper, the managers of Terra (another stable coin) decline to reveal precisely what assets are behind their product.
It gets worse, because as Armstrong explained there’s a six-step process to Terra, which starts with the coin having a counterparty cryptocurrency called Luna.
Smart contracts allow traders to exchange $1 worth of Luna for a single Terra, and if either Terra or Luna gets overvalued, an exchange process to balance values kicks in.
“If this sounds like a house of cards, that’s because it is,” Armstrong wrote.
“The system relies on an active market, which, in turn requires traders to believe they won’t get stuck holding the bag. If everyone turns sour of Terra at once, the whole thing crumbles.”
In the good old days, such an event was called a bank run.
