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A Different Side of Disruption: What Uber Could Learn from Insurers

It seems that “disruption” has been the word of the day for four years or more.   Some questions come to mind.  Do progressive, strategic managers see being disruptive as the sine qua non for success?  Also, is confrontation integral to being disruptive?

I’d like to make a case for a collaboration as a balance and offer the insurance industry as an example.

 Uber – Disruptor extraordinaire

It’s an understatement to say that Uber, the car sharing service that competes head to head with taxi and limo services, is a major disruptor.  And, as the disruption sometimes involves challenging the livelihoods of a large population of small business operators, confrontations about disruption tend to occur in public, in front of media.

A recent article in the New York Times chronicled  a bad first week in July that Uber had in France.  Here’s the short list:

  • “Thousands of taxi drivers protested UberPop” – the equivalent of Uber X in North America – in the streets of Paris
  • “French Politicians denounced the company for defying the country’s transport laws”
  • “Two of Uber’s top executives in France were detained by the police and accused of operating an illegal taxi business”

Confrontation with taxi drivers and local politicians is not unusual for Uber.  However, unlike the early history of Uber where the service pressed on against all opposition, Uber ultimately suspended the UberPop service until there can be resolution of a case that is pending in front of the French courts.

And, according to US News and World Report this is becoming the pattern for jurisdictions including Spain, The Netherlands, China, and India.

In Canada, Uber cars have been impounded in Montreal, and the service banned entirely in Vancouver.  Even Toronto’s Mayor, the very Tory John Tory, has indicated that there will have to be regulations, in spite of a favourable ruling for Uber.

Is this part of the Plan?

A recent article in Bloomberg compares Uber now to Amazon of old.  The critical element is scale which is why there is a major emphasis on growth in large cities.  They needs lots of riders who use lots of cars.

Which begs the question:  Is confrontation the best strategy?  Here’s where a page from Insurance School of Political Reality comes in handy.

Why can’t we all get along?

Throughout my insurance career, there have been numerous opportunities for confrontation with regulators, politicians, competitors, and even partners. The successful insurance professionals I know have unanimously sought to find common ground instead of drawing lines in the sand.

The best example in my experience was the victory of the NDP  in the 1990 Ontario General election.  The New Democratic Party’s platform was clear:  Publicly Run Automobile Insurance Now.  For many insurers, this was an existential threat.  For the industry it was high level disruption.

The public response from industry leaders was clear:  Cooperate with the politicians and government officials, state the private sector value proposition, stay calm, and carry on.  Of course, there were massive amounts of quiet data collection and lobbying.  And, at the end of the day, a recession interrupted the plan’s financing.

However, had the insurers responded with the same vitriol that had been coming from some of the pro-public insurance supporters, we would likely still be fighting today.

What does all this mean?

I’m not dismissing the value of disruption and innovation.  Far from it.  But collaboration within the enterprise, and with select outsiders can be equally important.  At the 2015 Executive Forum, we will see both disruption and collaboration.  I hope you can join us and let us know how you think these approaches play separately and together.