“Top Management”
No taxis on the streets. No stars on hotels.
No taxis on the streets
I’ve never liked riding a taxi. Not because I have anything against the drivers or because of occasional bad experiences. What causes me anxiety is the inconsistency, the uncertainty about what I will get. The emergence of Uber, Cabify, and other similar platforms offered me that consistency: a standard of service, a convenient payment solution, a rating system that ensured the natural selection of good drivers. In Portugal, as in the world, it was demonstrated that there were millions of consumers, like me, who were dissatisfied with the incumbent’s individual public transportation solution. In November 2018, the new law regulating these platforms finally came into effect. I was pleased to see the regulator finally catching up with progress, but I was disappointed with the approach. From my liberal perspective on society, I don’t think it’s the State’s role to define the products and services available in the market. It’s well demonstrated that the competitive relationship between companies, in the pursuit of market share and profit, is a much stronger catalyst for satisfying consumer needs.
I don’t know why taxis have to be black with a green roof and Ubers can’t be more than 7 years old. Or why taxis can use taxi stands and bus lanes while Ubers can’t even pick up passengers on the street. Why have two parallel realities if the underlying need is the same? And by the way, I also don’t understand why drivers need to have an employment contract when their motivation is often precisely to manage their time with flexibility. The gig economy is a trend, not a problem.
If the need is transportation and the goal is to attract more customers, operators, better than anyone, would know how to create and manage appropriate value propositions, innovating to gain an advantage over their competitors. The consumer would benefit, of course. It would be the State’s responsibility to ensure basic guarantees to the consumer, such as safety, transparency, and competition. As for public goods, like taxi stands and bus lanes, their use should be paid for by operators who want to derive economic benefit from them.
Looking at future realities based on past models reminds me of the first cars, which resembled horse-drawn carriages. Automotive companies like BMW, Mercedes, and PSA are also becoming car-sharing operators, and electronic platforms like Uber have started investing in scooters and bicycles to offer diversified mobility solutions through their applications. The mobility industry will undergo a revolution in the next decade, and once again, the regulator will be playing catch-up. It’s a pity.
No stars in hotels
In tourist accommodation, it’s somewhat the same. In a context of massive change, fueled by a more eclectic consumer with almost unlimited access to information, legislative evolution is based on past assumptions. Hotels on one side and short-term rentals (“Alojamento Local”) on the other, as if the need were not the same, and consumers confined themselves to perfectly compartmentalized consumption profiles. Closed typologies with predefined requirements, as if innovation and disruption were not a benefit for everyone. Categorization by stars, as if consumers needed some central authority to provide guidelines in the world of reviews, scores, and information at their fingertips.
It’s true that much has been done over the years. On the one hand, to reduce dependence on physical criteria ratings and introduce some flexibility through a weighting system. On the other hand, to bring new realities into the formal economy and thus integrate them into the tourism ecosystem in an organized way. But the logic is the same as mobility platforms – discreet improvements on a model that deserved to be rethought.
I believe in the ingenuity of entrepreneurs, the rationality of the consumer, and a State dedicated to ensuring context effectively without interfering in our day-to-day choices. For the benefit of all. Is it utopia?
A CONTRIBUTION FROM…
Bernardo Trindade | PortoBay group Board Director, former Secretary of State for Tourism
Do you agree that more disruptive responses are needed for structural changes in consumer behavior?
Thank you, Filipe, for the invitation. I must say that I don’t believe in profit alone as a measure of self-regulation. I immediately think of scooters abandoned at the doorstep… Disruptive responses are definitely needed, generating new needs with the consumer at the center.
Does the classification system in the hotel industry limit the creativity of the entrepreneur?
We have come a long way. I remember the revision of the law on tourist enterprises in 2008 where we separated infrastructure and service, creating space for creativity. Today, periodically, there are various projects with innovative concepts under the same classification. The Portuguese Tourism Board participates in the process, conducts classification audits, ensuring good dialogue between authorities and entrepreneurs. We have learned a lot. Everyone has.
What are the real benefits of classification for a consumer with almost unlimited access to information?
More information makes the service relationship more transparent. But not only that: the 9.4 classification given by the “Aojamento Local” consumer in my building does not represent the same as a 5-star rating on Avenida da Liberdade. From the consumer’s point of view, access to a universal standard of requirements is ensured, especially when information at the destination is not sufficient.
Written by Filipe Santiago
April, 2019
This article was published in Publituris Hotelaria as part of the “Top Management” series. You can access the printed version here and the online version here.
