Systemic Risk for Transportation-as-a-Service

Delta Airlines grounded their flights worldwide today, due to a series of computer systems failures. This was all triggered by an overnight power outage in Atlanta, home to Delta headquarters.

This follows closely on the heels of a similar issue at Southwest Airlines a few days ago.

This is a massive inconvenience for anyone who happens to be affected, but I’m not traveling by air this week, and certainly not on Delta, so I’m fine.

It’s not hard, however, to imagine a future world in which this happens with a transportation-as-a-service company, and it’s a massive problem for everyone.

In a world in which everyone gives up their cars, maybe when Uber goes down, Lyft is there to plug the gap.

Or, maybe people have signed up to long-term contracts with Uber and can’t switch over easily, kind of like wireless contracts in the US today.

In that world, TaaS is much more like the power or water company than like the airlines. Its performance needs to be nearly uninterrupted.

So far, Uber and Lyft seem to have something approaching that level of service. But just watching the airline industry shows what a hard feat that is to maintain.

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