Poor Cabcharge Australia Limited (ASX: CAB) shareholders. They likely didn't see it coming, and the company itself is fighting fires on more than one front.
Yes, surcharges are being slashed from the usurious 10% to the only-slightly-less-usurious 5% when you pay for your taxi fare with a credit card. It's making life tough for the company.
But perhaps the bigger threat, the uber-threat, if you'll excuse the pun, comes from a company trying to disrupt the taxi industry the world over. That company, Uber, is completely rewriting the process of finding, hiring and paying for taxi services.
Cabcharge has gone from having an effective – and reasonably bullet-proof – monopoly with huge pricing power to being under fire not only to maintain its previous profit margins, but perhaps its very business, should Uber really take hold.
The only constant
It's something that keeps many investors up at night. Constant change. New innovations. The old world can no longer compete with the new world. It's been going for ever.
Survival of the fittest. First to market. Only the strongest win.
The tiny startup with a brilliant plan will be blown to smithereens once its giant competitors decide to take them seriously. Or it's the long-established company that will see its business disappear as a new disruptive product or service makes the old business as obsolete as a dinosaur.
Back to Uber for a second. The transportation network is now disrupting traditional taxi services in 53 countries and more than 200 cities worldwide. And it is evolving again – taking a page out of Google's playbook and wants to develop self-driving cars.
Amazon.com has single-handedly killed the bookshop and book printers already. It was the tiny startup once.
Seek Limited (ASX: SEK), Carsales.com Ltd (ASX: CRZ), REA Group Limited (ASX: REA) and a host of other new disruptors are eating away at the revenues and profits from traditional media companies. They too, were all tiny at one stage.
Smartphones and tablets are replacing traditional mobile phones, desktop computers and even laptops and notebooks.
US-based car manufacturer – and new kid on the block — Tesla, with its battery-powered cars and now solar power charging stations, is threatening to revolutionise not just the car industry, but the petroleum industry too. Who needs petrol stations anymore?
Tomorrow's disruptions?
Are solar powered homes and businesses a real threat to traditional electricity utilities?
Online retailers are crushing the traditional department and bricks and mortar stores. Will shopping malls be next?
Will peer-to-peer lending allow borrowers and lenders to bypass the banks? What's next – crowdsourced insurance?
Will mobile payment technologies also allow businesses and consumers to bypass the banks?
Will new incredibly small micro machines and superfast broadband change the way we visit doctors and other specialists? Will wearable technology become a virtual doctor?
What's an investor to do?
For an investor, these trends can be daunting. Ignore the threats at your peril, because many of them are very real. But also understand that at the same time, many existing businesses will still be around for many years to come.
Flight Centre Travel Group Ltd (ASX: FLT) was doomed by the online travel industry.
Only it wasn't. And Flight Centre has gone on to expand offshore, as people realise they still need a real live travel agent. That may change in future of course – but we don't appear to be there just yet.
Banks have been around for thousands of years. In fact, banking is considered by some to be the world's oldest or second oldest profession. If you consider the changes that have occurred in that time, banks have stood the test of time remarkably well.
Telstra Corporation Ltd (ASX: TLS) was a boring government business providing telephone services to households, businesses and government enterprises over copper wires. It still does that to a small extent, but now dominates Australia's internet and mobile phone markets.
Those are but three examples. Many industries have survived, changed, and adapted to the new 'times'.
