In 2011 Uber launched in San Francisco, allowing users to hail a luxury car for 1.5 times the price of a taxi. It now has annual revenues in excess of $10Bn and has decimated the traditional taxi industry in many cities around the world. The taxi industry was ripe for disruption. Its basic service offering had not changed in years, it was slow to adopt new technologies and the customer experience often left a lot to be desired.

For those involved with the construction industry, this may sound very familiar.

The way that roads are constructed has not changed substantially since Roman times. Productivity growth in the construction industry over the last thirty years trails that of other significant industries by 25%. Major projects are often completed late and over budget resulting in lengthy disputes that leave all but the lawyers with a warm and fuzzy feeling.

So why hasn’t the construction industry been disrupted?

The construction industry is heavily regulated by all levels of government and barriers to entry are high, especially in the marketplace for major projects where a substantial balance sheet is a prerequisite to compete. This could also be said of the taxi industry though, where limited taxi licences were tightly held and infrequently traded for large sums of money.

Where the construction industry differs from the taxi industry however is in terms of the diversity of its customer base. The market for taxis is made up of millions of private individuals whereas the market for construction, particularly construction of infrastructure, is dominated by large government agencies. Their buying power allows them to dictate the terms on which projects are procured and delivered.

Furthermore, these agencies tend to be very conservative in their approach, worried of the potential political fallout if a project runs in trouble. Increasingly, this has led to contractors being asked to allow for all project risk in a firm lump sum price estimated in a short tender window without being able to rely on the information given to them.

For their part, contractors have been willing participants in this process which has turned into a game of survival as risks eventuate, margins disappear, and lawyers are called in. In this fight for survival it can be no surprise that there has been little focus on innovation.

The COVID-19 pandemic however has the potential to significantly disrupt this unhappy status quo. Governments are relying on the construction industry to lead the economy out of recession. The sheer volume of work planned will require a major change to the traditional rules of the game if it is to get constructed.

It will require significantly increased collaboration between all stakeholders to make projects truly shovel ready, to develop the capability, capacity and skills to construct them and to leverage the social and economic benefits that can flow from them.

If we get this right, we can also develop a platform for innovation, efficiency and value outcomes that the traditional model simply does not provide. COVID can be construction’s Uber moment but we all need to be up for the ride.