The Uber Model Isn’t Uber Great for Others

“Investors saw Uber’s success as a template for Ubers for everything … But Uber’s success was in many ways unique,” writes Farhad Manjoo in The New York Times. “For one thing, it was attacking a vulnerable market. In many cities, the taxi business was a customer-unfriendly protectionist racket that artificially inflated prices and cared little about customer service.”

“The opportunity for Uber to become a regular part of people’s lives was huge. Many people take cars every day, so hook them once and you have repeat customers. Finally, cars are the second-most-expensive things people buy, and the most frequent thing we do with them is park. That monumental inefficiency left Uber ample room to extract a profit even after undercutting what we now pay for cars.”

“But how many other markets are there like that? Not many. Some services were used frequently by consumers, but weren’t that valuable — things related to food, for instance, offered low margins … Another problem was that funding distorted on-demand businesses. So many start-ups raised so much cash in 2014 and 2015 that they were freed from the pressure of having to make money on each of their orders … The lesson so far in the on-demand world is that Uber is the exception, not the norm. Uber, but for Uber — and not much else.”


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