Going Rogue Is Mandatory to Disrupt an Industry


The current battle between taxicabs who pull a meter and upstarts who book fares via a smartphone app is evocative of an action-packed taxi drama that we are seeing unfold before our very eyes.

In my frequent trips to San Francisco, Chicago, Boston, and New York, I find getting around these cities to be generally quite predictable. Taxicabs are aplenty and are on every street and corner. Simply hail the cab, jump in the back, tell the driver where you want to go, and he whisks you off to your destination. Most of the time…anyway. It’s when you need a cab early in the morning, or at a time that intersects with the shift change that happens for taxicab drivers between 5:00 – 7:00 PM—all that predictability flies out the window. In fact, it is predictably unpredictable. The reality is that the number of taxicabs is fixed, tired cabbies want to get home after their long day of dealing with the public, and the new shift is not exactly enthused to get on the road immediately. And for sure, no cabbie wants to drive you out of the downtown area during these hours without some sort of, ahem, added financial incentive.

It may be that I need to dash off to a late business meeting, or drinks across town, or attempt to get to Logan Airport or JFK to catch a flight. Invariably at these times I find myself frustrated or stranded, trying to get from Point A to Point B. Also, since I’m not a native of the city, when I am in the back of that taxicab, I find myself focused on the meter—wondering if the cabbie is taking me on a circuitous route just to jack up the meter, or if the meter is somehow miscalculating the mileage. Call it “trust” issues or “control” issues, but I think well-founded. I will never forget paying a $224 fare to go less than 10 miles due to traffic on the highway. Few things are more frustrating than watching the fare rise $75 while sitting at a dead stop. Sigh. Of course, I tried to negotiate the fare down, but since the driver did not speak intelligible English, it was more of a staring contest than anything else. No tip for you! That he understood.

It is situations like this that remind me that even though I’d like to think that I am the captain of my own destiny, my ability to control things is many times a grand illusion. Don’t get me wrong, the traditional taxicab system has generally served me well historically, but for certain times or special circumstances, or when flexibility is limited—and things need to be perfect—or when transparency in the transaction matters, this is not where the traditional taxicab system shines. But, hey, they’ve really never had to worry about it. That is until just recently.

New “shared economy” companies and new digital platforms like Uber, Lyft, and others like them that facilitate consumer services in long-established industries have brought tension to the intersection of old “analog” regulated industries like taxicabs and new faster, safer, smarter “digital” technologies.

Uber ruffled the feathers of the taxicab industry when it entered the market in 2010. Its on-demand limo-style car service shook up the notion that black cars were only for special occasions or for the wealthy. Uber has expanded its business to include taxis and ride-sharing, which connects passengers to drivers who use their own vehicles for service. After a customer orders a ride via the Uber app, drivers use Uber to calculate fares based on the time and length of the trip, much like a taxi. Instead of a meter, though, drivers use a GPS-enabled smartphone to measure the length of the trip. Everything is totally transparent, and both parties in the transaction get exactly what they expected. Satisfaction. And you can even rate the driver, which gets published on their driver profile.

Online upstarts like Uber are rattling the playing field and are being labeled as rogue by the taxicab industry. And taxi companies are lobbying like mad to shut them down. The same is happening to Airbnb, which is disrupting the hotel industry.

History shows that upstarts often face opposition when the established order is threatened, and that is no different here. Of course, entrenched competitors are crying foul, and have filed lawsuits and promoted their interests by citing thinly-veiled regulatory violations. However, to be fair, existing regulations were designed for the analog world. Now we live in a digital world, and there are digital ways of providing these services that have created new forms and methods of consumption. The conflict is natural, but overwhelmingly protectionism—in any form—is a recipe for failure in the long-term

So what does all of this have to do with payments? In much the same way that Uber, Lyft, Airbnb, and even Apple’s iTunes have challenged the old-guard industries, massive and disruptive change is happening in the payments industry as well.

Payments have been the dominion of banks and financial institutions since the Medieval times, and truth be told, very little innovation has happened since, particularly in the area of B2B transactions. Yes, you can do online banking now, and can take a photo of a check with your phone and send it in, but the way money moves across the multi-corner banking model is the same as its ever been—slow, non-transparent, costly, and well, “analog”. It is all the things that are often associated with oligopolistic or monopolistic businesses, and much like the taxicab situation leaving me stranded and frustrated, companies doing B2B transactions feel the same way. One only has to take a cursory look at the consolidation of banks to know what the future holds here (http://bit.ly/1irf6Xa). However, all that is changing, and fast. Forbes magazine has a lot to say about changes happening in the banking industry (http://onforb.es/1etvwjY) and the impact to the old guard.

New types of financial service providers and “non-banks” have come to the rescue, and are bringing innovation and game-changing digital platforms to bear. And the sleepy traditional banking and financial sectors are struggling to keep pace with these new upstarts. While we’ve seen exciting new developments happening in the peer-to-peer and consumer payments spaces (with digital crypto currencies like Bitcoin and Ripple’s XRP, and companies like Square, Stripe, and others) sadly, B2B transactions and payments have been literally stuck in the dark ages. That is, until Traxpay.

Built from the ground-up exclusively for B2B transactions and payments, Traxpay is transforming the way that business pay and get paid on a global basis—bringing faster, safer, and smarter financial transactions. As we continue in our mission, yes, there will be drama, yes, there will be heavy lobbying, and most certainly it will be action-packed. Just like in the other upstarts disrupting old industries with new digital platforms, the old-guard and traditional analog players in the market won’t take it laying down. Traxpay is happy to be considered rogue. We wear it as a badge of honor. We know how this story ends—protectionism always fails—and we continue to be inspired by our customers and our investors as we continue to bring disruption and dynamic payments to the world of B2B transactions.

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