Uber Dispatch: Professionalization of Platforms
This morning, we took an Uber to a client (yes, offices are finally opening up in Mexico!). We hopped in the car and all of a sudden we heard a radio/walkie-talkie-like chatter through the Uber driver’s phone. It was a dispatch. Yes, a dispatch services like ‘traditional’, centralized taxi companies have: we heard a woman shouting at the other end of the line giving instructions to drivers and confirming trips of our (and other) drivers.
So, after chatting with our driver, we found out that he didn’t own his car, and took on Uber driving as a side job to make some extra money. A rented car, a centralized dispatch, communicating ‘stop and go’s’ during the day… this sounds an awful lot like a traditional taxi company!
Funny how things evolve: the service that once disrupted the status quo, finds itself copying behavior from the ‘old world’. Not in a forced way, but by a very natural — and logical — chain of events.
A rented car, a centralized dispatch, communicating ‘stop and go’s’ during the day… this sounds an awful lot like a traditional taxi company.
By the way, Uber itself also advertises with the ability to ‘join a fleet’, as shown on their website.
Disruption: the circle is round
The example above, does not stand by itself. If we take a look at AirBnB, we see a similar pattern arise. Entire buildings are bought, renovated and rented out on AirBnB — without any homeowner present. Cleaning ladies are hired, concierges contracted and automatic access control systems, installed. What once started as a boutique, romantic idea (renting out unused space to friendly strangers), has become an international, commercial and booming business. How-to guides for home owners show the economics and implications of entering the AirBnb market.
Generally, we see the following chain of events progressing:
1- Seller/supplier joins platform (AirBnB, Uber)
2- Starts earning money through selling/renting out services (on small scale)
3- Demand (and supply) grow, capital is invested to ‘professionalize’ service
4- Seller/supplier effectively runs a multi-person business on top of said platform
In the case of the Uber example, this explains the centralized dispatch we encountered: a business owner has a fleet of vehicles (owned or leased), finds people that who to make some extra bucks, and manages/controls their rides through a central system — just like a taxi company would do.
‘Professionalization of platforms’
This new trend of creating companies on top of platforms is probably one to stay — unless platforms regulations put a halt to this. As such, the platform is nothing more than a sales channel, or infrastructure which people use to sell additional services. The initial, core value proposition (AirBnB: renting out an unused room, Uber: making some extra bucks with an unused car), is changing: the platform is ‘professionalized’ and rather than monetizing existing, non-profitable assets — your car, your spare room — people start monetizing new assets, that previously were not owned by the customer.
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