It was just a matter of time. They started with taking people from point A to point B. They gave us some glimpses of what might come by dropping off ice cream and litters of kittens. Uber became (and continues to become) incredibly efficient by matching supply and demand, all from the mobile device. How successful? A valuation of $3.4B back in August 2013.
Some may argue (and I got this question yesterday from a journalist) "they could have done this without mobile services." I disagree. Mobile has added a level of convenience and improved the customer experience dramatically. Convenience. Convenience. Convenience. Uber has embraced what we call the mobile mind shift and is expertly serving customers in their mobile moments - a concept explored in depth in our upcoming book.
Uber (and similar services) have grown the overall business for private car transportation. What are they cannibalizing? I haven't done this analysis, but for me - I drive less and spend a lot less on parking. Do I spend more on Uber than I would have on parking? Probably, but they are so enjoyable to do business with. (See our customer experience framework).
- Mobile phones (subsidized) are relatively cheap - or at least affordable as a cost of doing business for your typical driver. Dedicated hardware isn't.
- A mobile app for the drivers (and now cyclists) pinpoints exact pick-up locations PLUS shows the hotspots for demand based on time of day, location, weather, holidays, local events, and probably a hundred other factors. There is no other way to communicate easily to drivers where they should wait to pick up rides.
I recently heard my all-time favorite excuse for why you can't disrupt yourself. It was in a session with 40 senior IT leaders of a Fortune 500 company including the CIO. Somebody brought up Uber and Airbnb, and most in the room nodded in agreement that a big company could learn a thing or two from these disruptors. That's when someone dropped my new favorite excuse: "But we can't imitate Uber and Airbnb because what they're doing is illegal."
Sure, it would be nice to just avoid taking the fast and bumpy road of disruption in favor of staying in the smooth parking lot of denial. But that's not really an option because the lessons of Uber, Airbnb, and other disruptors apply to everyone in every industry.
I don't mean to sidestep the legal question, but I do mean to point out that it's hardly the issue here. Uber and Airbnb are coming under fire because they're using cheap technology and existing resources to make their customer's lives dramatically better, one positive experience at a time. That's the real issue here, and it's the one companies of any size should focus on.