The long read: To understand how the $60bn company is taking over the world, you need to stop thinking about cars
Sourced through Scoop.it from: www.theguardian.com
There is plenty of logic in the maths of what they are doing and people are climbing over each other to join Uber, from graduates to the unemployed. They don’t seem to be making a lot of money, but perhaps they are attracted by the concept of being your own boss.
I suspect that this is the type of business where smart people will make good money for a time and will work their way to owning driverless cabs in the long run. That appears to me to be the long game. You get a truckload of drivers to build a business for you using a very smart Information Technology system, build up a customer base (there are already more Uber drivers in London than there are Black Cabs) and a customer base who are increasingly happy to share rides. I mean, if you had a bus that picked you up at your door and only had 3 other passengers, but was no dearer than any other bus, why would you bother driving, unless you like driving?
Why would you rush into a job where the more successful you are, the more likely you are going to be out of work, i.e. with driverless cars? I don’t know, maybe they don’t see that playing out any time soon and they don’t have the outgoings that normal taxi companies have.
One of the things that I see time and time again is people become very loyal to a concept that they see as helping them achieve their goals once they have signed up. But for the smart ones there probably are opportunities to take advantage of the next wave, after all, Uber typically doesn’t own cars, it owns a system, so someone still has to own them.
Can a business with a system and very little in the way of assets become highly profitable? Ask people like Steve Tindall who founded one of NZ’s most successful retail businesses, The Warehouse. He built big concrete warehouses, turned them into shops and invited product distributors to stock it in return for a transparent view of their Point of Sale system.
What isn’t fully clear in the case of Uber is the end game. It is not drivers picking up customers. In the long term there probably won’t be drivers. It is also pretty much the first of what will be a long list of copycats, ‘like Uber but better’. It will change the industry, it will have a significant impact on both public transport and on the traditional taxi sector.
I wonder if there is something for the freight industry here. That network is desperate for drivers and yet drivers are going to Uber in many cases because they can’t get other work, or want to be their own bosses.
Ultimately with urban population growth, we want fewer cars on the road, especially those with only the driver in them. One way or another society seems to find solutions out of left field. Ways that seem totally obvious once they are on the way, but are incredibly difficult to get off the ground by start ups and almost totally impossible within existing traditional business models.