There May Not Be an Uber for Everything

Farhad Manjoo indicated yesterday at The New York Times Online that, “Other than Uber, the hypersuccessful granddaddy of on-demand apps, many of these companies have come under stress. Across a variety of on-demand apps, prices are rising, service is declining, business models are shifting, and in some cases, companies are closing down.

“Here is what we are witnessing: the end of the on-demand dream.

“That dream was about price and convenience…[T]hey weren’t just less headache than old-world services, but because they were using phones to eliminate inefficiencies, they argued that they could be cheaper, too — so cheap that as they grew, they could offer luxury-level service at mass-market prices.

That just isn’t happening.”

The New York Times article explained that, “Investors saw Uber’s success as a template for Ubers for everything. ‘The industry went through a period where we said, let’s look at any big service industry, stick ‘on-demand’ on it, and we’ve got an Uber,’ said Hunter Walk, a venture capitalist at the firm Homebrew, which has invested in at least one on-demand company, the shipping service Shyp.

But Uber’s success was in many ways unique. 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.”

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