The principles of disruption, espoused in their purest form by Silicon Valley enterprises and the hopes of tech unicorns, have slowly percolated their way into the minds of those operating in the superyacht market, if only in theory at this point. It would be a brave person that argues that progress – disruption is undoubtedly progress – is something that should be avoided. But, in an industry that is, at times, plagued by conservatism and cumbersome advancement, we may yet find a few. However, might these doubters have a point or will disruption genuinely yield the positive results that those companies that are likely to benefit from it claim?
Disruption refers to the creation of products, services and processes that generate new markets and, in doing so, replace the need for the old ones or, at least, greatly diminish their market share. Some contemporary examples of successful disruptive enterprises include Uber, Airbnb and Amazon, and it was these companies that were referred to at Hill Dickinson’s ‘Tomorrow’s maritime world’ event for London International Shipping Week (LISW).
At the Hill Dickinson event, discussions of feasible, if not imminent, disruption of the shipping community, and by proxy the yachting community, centred on the emergence of automation as a means of reducing costs, bolstering safety and creating new business. While it is highly unlikely that superyachts, at least in the near future, will become as automated as commercial shipping vessels, the shipping example still serves as an adequate example to raise some concerns.
It sounds stupid, but what people frequently forget about disruption is that it is disruptive. The companies that were lauded at LISW – the Ubers and the Airbnbs – have caused significant damage in some areas of the world. Residents in Barcelona, as well as the local government, have been up in arms about Airbnb users driving up long-term rental prices for local residents. Airbnb has subsequently been fined around €600,000 for facilitating the illegal rental of properties in Barcelona.
Elsewhere, the use of Uber in India has left many of its drivers in serious debt and a number of traditional taxi drivers with diminished customer bases. In February 2017, 100,000 people adversely affected by Uber from Delhi and Bangalore went on strike. This was the third large-scale demonstration against Uber and just one of many general demonstrations against the taxi service. The drivers were demanding better pay and representation. The early adopters of Uber in India enjoyed good profits, however, as the app became more popular and more drivers joined, these profits became greatly diminished. This made paying for the cars that Uber had provided nearly impossible. It is important to bare these examples in mind when considering the relative merits of disruption.
If shipping were to become automated, whether that be fully automated vessels, vessels crewed from onshore command centres or vessels with a skeleton crew, it will result in the redundancy of a huge number of seafarers, who may not necessarily be well qualified for onshore work. The same can be said of the superyacht world; where will the jobs be for passionate seafarers if superyachts become automated?
Automation is an extreme example of disruption, but the superyacht market is ripe for disruption in many areas. What happens if, as we are already seeing, Airbnb-like models get adopted for the brokerage and charter markets? What will happen when customs and border control is all done automatically – aside from being far more efficient?
I, for one, am pro-progress and would actively encourage disruption, and I have spoken to a number of people that are of a like mind. However, while people bat the term disruption around willy-nilly, lauding it as the fix-all solution, perhaps they should be careful what they wish for. Because it may be your business that gets disrupted.