Uber-for-X, On-Demand Services and Platforms

Uber

  • town car company
  • town car and taxi company for all towns and cities in the world
  • personal logistics service
  • delivery of people, things and services
  • replacement for personal cars and public transportation
  • orchestrated fleet of self-driving cars
  • giant AI supercomputer orchestrating the delivery of millions of people and items all over the world

The sharing economy is not about sharing at all

  • uber-for-x
    • for cars
    • for buses
    • for trucks
    • for delivery trucks
    • for scooters
    • for e-scooters
  • pipelines vs. platforms -> industry disruption

The on-demand business framework

Five step “playbook” for uberization of the economy

  • uber-for-x
  • leverage existing network
  • one click
  • optimize value chain
  • aggressive execution

Platforms re-invent pipelines & value chains

  • example (ubereats)
    • order the food -> make the food -> put the food in the car -> deliver the food (from)
    • make the food -> put the food in the car -> order the food -> deliver the food (to)

Summary

  • background and evolution of the on-demand economy
  • on-demand platforms and instant gratification
  • one-click and “uberization” and uber-for-x of the economy in 5 steps
  • platforms re-invent value chains and pipelines – ubereats example
  • uber’s evolution over time

Uber’s Business Model Canvas and Uber vs. Didi

Uber business model

  • canvas
  • target customers
    • end users
      • upper class
      • business
      • technology
      • urban middle-class
    • suppliers
      • drivers
  • value proposition
    • value proposition for both sides
      • end users
        • secure, trustworthy and guaranteed ride with shorter waiting
      • drivers
        • busier and efficient days for drivers
  • value orchestration
    • mobile app instant services + no company cars + no employee-drivers

  • dynamic pricing is more profitable

Didi in china

  • tier 1 cities and the four no’s
    • no unlicensed taxis
    • no fare increases
    • no mandatory membership
    • no hardware
  • didi taxi - partnered with regional governments to provide safety data
  • didi private car, mall, april 2013 partnership with tencent
  • reason - uber enters china with baidu support on december 2014, leaves in 2016 (it was like an arms race)
    • didi invests $100m in september 2015 in lyft
    • didi and uber burn $1B/year in subsidies to drivers and riders
    • apple invest $1B in didi
    • uber raises $3.5B from saudi arabia’s public investment fund
  • reason - get a didi taxi or network car harder
  • didi’s global expansion

Summary

  • we looked at uber’s business model canvas
  • we not only filled in the boxes but also used numbers and arrows to show how the boxes and activities were coordinated together for competitive advantage
  • we explained dynamic pricing, sometimes called surge pricing and showed how it increased profitability by creating micro-segments of riders willing-to-pay more as well as shifting the supply curve of drivers to match demand
  • we compared didi with uber in china

Uber vs. Grab vs. Go-Jek

Ride-hailing competition

The fortune at the bottom of the pyramid

Go-jek vs. grab

Other Significant Things

Top ten vc criteria for on-demand success

  • vc perspective
    • frequency matters in mobile and helps build habitual behavior (more important)
    • be careful of hidden unit costs and poor accounting (more important)
    • look for technology leverage and economies of scale in the model (more important)
    • be weary of simply becoming a more efficient agency
    • be very careful of discount customers, can prop up short term growth, but not sustainable and can cause negative chain reactions that are hard to fix
    • look for teams that are equal parts star operators and technologists
  • top ten vc
    • vision
    • market size
    • go-to-market
    • unit economics
    • retention and life time value (ltv)
    • supply side
    • operational excellence
    • market growth
    • network effects
    • technology leverage
  • for details

Additional Reading