{"id":21097,"date":"2017-11-08T15:11:26","date_gmt":"2017-11-08T20:11:26","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/the-uberization-of-uber-rebounding-from-a-terrible-no-good-very-bad-year\/"},"modified":"2017-11-08T15:12:39","modified_gmt":"2017-11-08T20:12:39","slug":"the-uberization-of-uber-rebounding-from-a-terrible-no-good-very-bad-year","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/the-uberization-of-uber-rebounding-from-a-terrible-no-good-very-bad-year\/","title":{"rendered":"The Uberization of Uber: Rebounding from a Terrible, No Good, Very Bad Year"},"content":{"rendered":"

Global Rivals on the Horizon<\/strong><\/p>\n

We\u2019re all \u00adfamiliar with how Uber disrupted the industry with its innovative rider services; today, Uber continues to be the fastest growing company in the world with over 1 million active cars on the road in over 400 cities globally [1]. But, financial risks, new rivals and threatening technologies loom on the horizon.<\/p>\n

Though gross bookings doubled to $20 billion, Uber lost $2.8 billion in 2016 [2]. In January 2017, Uber lost 200,000 customers in a single weekend during the #DeleteUber movement as customers deleted the app over its connections to President Trump [3]. In a play that could cripple the tech giant, Alphabet\u2019s self-driving car company Waymo demanded $1 billion in damages from Uber (and a public apology) in a court case that claims Uber unlawfully stole technology for its autonomous vehicle development [4]. And, in a kick-them-when-they\u2019re-down moment, Lyft began to raise $500 million to fund its growth and gain market share against cash-flush Uber [5].<\/p>\n

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Figure 1: Source [6]<\/figcaption><\/figure>\n

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Uber also faces a growing number of competitors globally, thanks to a digitalization revolution in supply chain services; in 2016, the SCM World Future of Supply Chain Survey found that 67% of 1,415 practitioners consider digital supply chain both disruptive and important for their companies, while 27% regard sharing economies like Uber as key disruptors [6]. Competitors now include Dubai-based Careem, Easy Taxi and Cabify in South America, and regional rival Lyft [7].<\/p>\n

Even more notable are the driverless cars that threaten to curtail the ride-hailing company\u2019s exponential growth. While Uber (and others, like Toyota and Waymo) forge on in the machine-learning race toward fully autonomous vehicles [8], as an anticipatory short-term play, Uber has no choice but to turn its head to alternative sources of revenue to keep it afloat [9].<\/p>\n

 <\/p>\n

Upping Their Digitalization Game<\/strong><\/p>\n

Over the past several years, Uber has actively tried to mitigate the digitalization risk by 1) introducing new services like UberEATS and UberRUSH, 2) continuing to improve its data analytics, and 3) forging on with its driver-less car technology.<\/p>\n

Uber found success in 2014 with its launch of UberEATS, an online meal ordering and delivery platform. In its latest innovation, Uber again broke the mold with UberRUSH, sparked when the company noticed how much collective trunk capacity remained unused within its drivers\u2019 cars: more than FedEx\u2019s global fleet [10]. The rest is digitalization history.<\/p>\n

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Figure 2: Source [11]<\/figcaption><\/figure>\n

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UberRUSH<\/a> is a B2B and B2C delivery service, used by both small businesses and larger enterprises (like Nordstrom and Walmart). UberRUSH works with commerce platforms like Shopify and Clover, allowing businesses to avoid costly bottlenecks by building deliveries right into their day-to-day operations without additional installation [11]. Uber also recently introduced UberRUSH API, which allows developers to integrate the checkout flow directly with the Uber network, enabling services to be triggered automatically with purchase [12].<\/p>\n

By leveraging smart, connected products, Uber enables up-to-the-minute visualization of current supply and demand [13] for its ride-sharing services. By continuing to crunch data and improve its algorithms, Uber could mitigate the digitalization risk by using big data to continue to drive down the cost of deliveries, making it better for consumers, small businesses and the environment (if efficiencies require fewer vehicles on the road).<\/p>\n

Beyond the short-term, former CEO Travis Kalanick cited autonomous cars as crucial to Uber\u2019s future financial health, since if another company \u201cgets there first, it could provide far cheaper services by cutting out the human drivers who take a cut of the fares\u201d [14]. Uber, however, must first prove in court it did not steal its technology from Waymo [15].<\/p>\n

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What\u2019s Next for Uber Technologies<\/strong><\/p>\n

In the short-term, UberRUSH will help Uber alleviate financial competitive pressures from its ride-sharing peers and digitized delivery services like Instacart for Whole Foods and Costco, meal-kit services like Blue Apron, or startups such as Convoy and Cargomatic. UberRUSH is incredibly scalable, and in the short-term, should be rolled out to every small business that competes with Amazon in all 400 cities where there are drivers capable of delivering physical goods, as well as humans. Amazon\u2019s massive advantage in terms of delivery could suddenly crumble, as Uber makes it more convenient to order deliveries via its app.<\/p>\n

But for the medium term, as Amazon readies its army of drones and taxi-hailing competitors nip at its tail, Uber has no choice but to continue to invest in driver-less technology. Digitalization is, after all, no longer an option, but an imperative.<\/p>\n

The real open question is, if it does lose the court battle against Waymo, how will Uber recover from having to sit out of the self-driving car race? How will Uber compete with one-hour deliveries from Amazon Prime Now? Will the next Uber service be a (more public) consumer behavior data play (e.g., selling consumer data on traffic and purchasing patterns)?<\/p>\n

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Word Count: 800<\/p>\n

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[1] Clark, Tim. Facebook and Uber Reveal Secrets of Digital Disruption. (2017, Apr 12). Digitalist Magazine. <\/em>Retrieved from http:\/\/www.digitalistmag.com\/digital-economy\/2017\/04\/12\/facebook-uber-reveal-secrets-of-digital-disruption-05021535<\/em>.<\/p>\n

[2] Carson, Biz. Uber booked $20 billion in rides in 2016, but it’s still losing billions. (2017, Apr 14). Business Insider. <\/em>Retrieved from http:\/\/www.businessinsider.com\/uber-2016-financial-numbers-revenue-losses-2017-4.<\/em><\/p>\n

[3] Carson, Biz. Uber’s no-good, very bad month: The stunning string of blows that have upended the world’s most valuable startup. (2017, Mar 26). Business Insider. <\/em>Retrieved from http:\/\/www.businessinsider.com\/uber-scandal-timeline-2017-3.<\/em><\/p>\n

[4] Mullin, Joe. Waymo Than Uber Can Afford \u2014 Waymo\u2019s staggering settlement demand for Uber: $1 billion. (2017, Oct 12). Ars Technica. <\/em>Retrieved from https:\/\/arstechnica.com\/tech-policy\/2017\/10\/waymos-staggering-settlement-demand-for-uber-1-billion\/. <\/em><\/p>\n

[5] Carson, Biz. Lyft is trying to raise $500 million in its fight against Uber. (2017, Mar 1). Business Insider. <\/em>Retrieved from http:\/\/www.businessinsider.com\/report-lyft-is-trying-to-raise-500-million-in-its-fight-against-uber-2017-3<\/em>.<\/p>\n

[6] O\u2019Marah, Kevin. Digitization in Supply Chain: Five Key Trends. (2016, Nov 17). Forbes. <\/em>Retrieved from https:\/\/www.forbes.com\/sites\/kevinomarah\/2016\/11\/17\/digitization-in-supply-chain-five-key-trends\/#71a50b05428a.<\/em><\/p>\n

[7] Hinchliffe, Emma. Uber’s global rivals are teaming up, and here’s who they are. (2017, Aug 16). Mashable<\/em>. Retrieved from http:\/\/mashable.com\/2017\/08\/16\/uber-global-rivals-didi\/#Nz42Boh4SgqQ<\/em>.<\/p>\n

[8] Metz, Cade. What Virtual Reality Can Teach a Driverless Car. (2017, Oct 29). The New York Times. <\/em>Retrieved from https:\/\/www.nytimes.com\/2017\/10\/29\/business\/virtual-reality-driverless-cars.html?_r=0<\/em>.<\/p>\n

[9] Forget Amazon Prime \u2013 UberRUSH is the future of deliveries. (2016, Feb 1). Business IT. <\/em>Retrieved from https:\/\/www.bit.com.au\/news\/forget-amazon-prime-uberrush-is-the-future-of-deliveries-414452.<\/em><\/p>\n

[10] Clark, Tim. Facebook and Uber Reveal Secrets of Digital Disruption. (2017, Apr 12). Digitalist Magazine. <\/em>Retrieved from http:\/\/www.digitalistmag.com\/digital-economy\/2017\/04\/12\/facebook-uber-reveal-secrets-of-digital-disruption-05021535<\/em>.<\/p>\n

[11] UberRUSH. (2017, Nov 4). Retrieved from https:\/\/rush.uber.com\/enterprise\/.<\/em><\/p>\n

[12] Forget Amazon Prime \u2013 UberRUSH is the future of deliveries. (2016, Feb 1). Business IT. <\/em>Retrieved from https:\/\/www.bit.com.au\/news\/forget-amazon-prime-uberrush-is-the-future-of-deliveries-414452.<\/em><\/p>\n

[13] Porter, M. and J. Heppelmann, \u201cHow smart, connected products are transforming competition,\u201d 性视界 Business Review<\/em> (Nov 2014).<\/p>\n

[14] Marshall, Aarian and A. Davies. The Scariest Threats to Uber’s Future, from Waymo to Money Worries. (2017, Jun 8). Wired<\/em>. Retrieved from https:\/\/www.wired.com\/2017\/05\/scariest-threats-ubers-future-waymo-money-worries\/. <\/em><\/p>\n

[15] Ibid.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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