Wednesday, March 23, 2016

The Uber Model, It Turns Out, Doesn’t Translate - The New York Times

Uneven on-demand demand

"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. 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. Other businesses funded in low-frequency and low-value areas “were a trap,” Mr. Walk said."
The Uber Model, It Turns Out, Doesn’t Translate - The New York Times
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