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Are we headed towards real estate’s ‘taxi’ moment?

By Josh Callaghan
04 June 2021 | 11 minute read
Josh Callaghan 2 reb

Almost all my taxi rides in the past two years have ended the same way — me stepping out of the taxi without paying, writes Josh Callaghan.

In Uber’s relatively short time in Australia, I have already developed the muscle memory that when I arrive at my destination, I simply disembark and get on with my day. Fumbling around to get a credit card out of my wallet to pay seems a thing of the past.

Uber entered the Australian market in 2012 and it took just six years for them to match the 100-year-old taxi industry in the number of people who had used their service. In any technology disruption, this would be impressive, but with Uber it’s even more astounding, as when they started, the service was illegal. Being an Uber driver wasn’t easy back then; they were being pulled over and fined, taxi drivers were hurling abuse at them and perhaps the lowest point was when two taxi drivers in Brisbane ordered an Uber in order to violently bash the driver. It was not all one way though; taxi drivers were losing money, their livelihoods were under attack and owners were watching their licence investments become close to worthless, leading to widescale strikes and heavy lobbying.  

But how does an illegal, fully online, distributed ridesharing service have such a devastating and permanent impact on a well-established, regulated and protected industry? The answer: consumer dissatisfaction.

If we put aside the smelly cabs and the aggressive driving, the fact was that taxis were no longer offering consumers what we wanted. They are only convenient if you’re standing at a taxi rank. If you request to go to a destination that is too close, you’d get scolded for such a low-value fair, or if the destination is too far away, you’d be told to get back out because they don’t go that far. If we managed to pick a destination within the invisible range of acceptable distance, then we’d get to the other end, and with a few swift button clicks would find our fare magically jump 10 bucks. The whole experience was at odds with what consumers expect — it was a universally hated experience.

Inspecting property is another universally hated experience among buyers and renters. For simplicity, if we split these consumers into two cohorts, you’ve got the cohort that can make a Saturday morning open home and the cohort that can’t. The current paradigm doesn’t work for either.

Cohort one spends their week looking at dozens of properties and building a shortlist of those to inspect on the weekend. Once they’ve discounted a few simply due to time clashes, they then construct a tight schedule of inspections in 30-minute blocks. Of the five they go to, two are already under offer, two look nothing like the photos and the last one is a complete write-off because of how small the rooms actually are in real life. Deflated, angry and with a whole Saturday morning lost, they go back home to start again.  

Cohort two must reduce their shortlist even further, as every inspection has to be arranged manually, phone calls to the agent, co-ordination of calendars and only to have the same experience — “this looks nothing like the photos”.

We all know people who don’t move to a new house simply because the scars of the last house hunt are still too current. There is no way that this is sustainable for the real estate industry. Real estate shouldn’t ignore the lessons of the taxi industry. Buyers and renters despise the process of inspecting property, and when the tide shifts, it will shift fast.

The good news is that it doesn’t require an Uber to come into the industry to give customers what they want; in fact, more and more agencies are adopting virtual tour technology that is already at their fingertips. In fact, that’s how we know that consumers love it; they spend more time on virtual tours when looking online than any other type of content.

Across the million or so buyers that have been through our virtual tours in the past six months, they’ve spent more than three minutes in the tour on average. The serious buyers are in there for much longer and over multiple sessions. These stats are for high-quality 3D virtual tours, but even 360-degree virtual tours are better than nothing.

In a world where I can have someone pick me up and drive me somewhere at the click of a button, it is insane that I can’t inspect a property just as easily.

Josh Callaghan is the CEO of Little Hinges and Virtual Tours Australia.

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