Uberification

From New Media Business Blog

Jump to: navigation, search
The Uber-ification of Things

Uberfication or Uberification is the capability to have an offline service delivered to a customer at the click of a button over an online application. The application acts as an intermediary where instant payments occur between the customer and service provider which makes up the sharing economy.

Contents

The Uber-ification of Things

Uberification and Uberfication are used synonymously. The birth of the term arises from the San Francisco ridesharing company, Uber which was founded in March of 2009. The suffix “ification” refers to the production, making or becoming of. Since formation, the first instance of “uberification” used as a hashtag on Twitter dates February 14, 2011. In blogging, it was first seen used in March 2014 in Schlaf’s notes.[1]

The Sharing Economy

User Adoption

Active Members in Top Markets

There is rapid growth in the adoption of Uber-like apps. In numbers, from a report leaked in December 2013, there were average of 70,000 active users with a few thousand drivers with more than 100,000 trips per week in their most mature markets.[1] They are in 250 cities with presence in 51 countries worldwide with rapid growth. Estimated growth rates drawing data from Uber and Lyft range from 15-30 percent in the beginning months of product launch, but seem to slow to 9 -10 percent as the market becomes more saturated [2]. With the rise of smartphone applications that have no dominating industry, the uberification of applications can change the landscape of various industries. In comparison, the house-sharing app Airbnb has gone from servicing its 1 millionth client in Aug 2008 to 10 Millionth in October 2013. The growth and adoption of these types of applications are rapid with international expansion.[3]

User adoption is also being boosted by the widely integrated services through partnerships with various organizations. For example, Uber started to offer multiple choices for online payments such as Paypal; thus, strengthening their stronghold as a popular ride-sharing application [4]. Part of their user adoption strategy is to expand globally, they do not allow exchange for cash and only rely on online payment transaction systems. The more accessible and convenient the service becomes, the higher the user adoption rate. However, there will always be a portion of the market that refuses to use such services due to fear of their own safety, however trends show that the majority adopters are tech & deal saavy. Though, most claim that Generation Y [5] tend to make up a high majority of uber-like services in a more collectivized community, there are more and more Baby Boomers also recognizing the benefits of the sharing economy.

The Sharing Economy Across Various Industires

The Sharing Economy

The sharing economy is the collaborative sharing of services where buyers and sellers are able to find each other over an application. Upon agreeing on price and ratings, they are able to complete the transaction with the click of a button. Most of these sharing economies are able to establish a strong network through an online website or application with capabilities to filter by price, location and reviews.

When strong networks are built among a community of people, there is a wealth of meaningful information where buyers and sellers are able to filter through products and services suitable for them. The more connections and relationships are established among in the network, the stronger the power and usefulness of the application becomes with the capability to change the industry by offering lower rates and more services. One of the main motivations for the sharing economy is the possibility for sellers to draw more value from existing assets, and buyers to save money by borrowing instead of buying. A secondary benefit comes from the capability for strong networks and communities to save the environment. By using existing assets, buyers and sellers are consuming less new products, and recycling, reusing or maximizing the use of existing products, services or infrastructures. Some articles have referred to this as the “triple win” referring to business, consumers, and the environment. More offerings across a variety of industries revolutionizes the way transactions are made, and provides access to everyone who otherwise could not with lowered costs.

These new types of businesses have the potential to disrupt the operations of existing industries due to the capability to develop strong network effects with high adoption rates. The improved accessibility of connecting people in service offerings significantly lowers the cost of the transaction, making the transaction profitable for both the buyer and seller. In return, the intermediary (application or online service) profits from a small cut of the transaction while operating on a large scale. With a strong network of users with a high amount of transaction, momentum pushes for change in the industry due to demand changes.

Although some models adopt a system where sellers are at fault for delivering faulty goods, now both parties are responsible for rating each other. For example, Uber drivers rate their passengers and vice versa. If an Uber driver goes to pick-up a customer and they are late, then the passenger may suffer a bad review and as a result other drivers in the future would try to skip you if they can if you have a low rating. “The customer is always right,” no longer applies all the time for the sharing economy because of the powerful review and rating systems in place. This type of system is traditionally different due to the onus on being on both parties at each ends of the transaction. This is common among uber-like businesses to verify and create more trust within the networks.

With the sharing economy, there are also many entities that act as opposition to the concept. Regulatory bodies and critics accuse the sharing economy of being highly illegal, unfair, and unsafe due to the lack of legitimacy behind certain businesses. Government fears losing on potential tax revenue loss due to unreported income and the formation of monopolies from killing all competitors. [6] There is also a high level uncertainty regarding insurance and liability as the sharing economy is facilitated by internet and the intermediaries withdraw themselves from legal responsibility with privacy and security jargon.

How it Works

The major distinction with peer-to-peer companies is who provides the good or service. In traditional industries, the provider of goods and services is a firm or company. However, peer-to-peer companies only act as market-makers and payment intermediaries between a user who is providing a service and a user who is looking for that service. Typically, the user who is providing goods is not a professional or a registered business. Peer-to-peer benefit from network effects - the more people use it, the more useful it becomes. As more people use peer-to-peer, the more it benefits from a better reputation and perception in safety.

Peer-to-peer companies use a combination of traditional security checks and peer reviews to verify its members. For example, Airbnb requires a picture of valid government-issued ID for users to join[7][8]. They also encourage people to use Facebook Connect, verify their phone number, and validate pictures of accommodations that hosts have uploaded to the website. After a stay, both the guest and the host are encouraged to rate each other. Lyft requires its drivers to go through a background check, a driving record check, vehicle inspections. Like Airbnb, they also encourage two-way ratings.[9]

Business models and sources of revenue vary widely between peer-to-peer companies. Most make money by charging a commission service fee when a transaction is made between two users. Some peer-to-peer companies, like couchsurfing.org, are free for users. TaskRabbit has more of the model of an online temp agency for small tasks.[10]Still others have business models based on suggested donations.

Uber

Uber is a “transportation network company” (a term coined by the California Public Utilities Commission), meaning they connect drivers with people who need a ride somewhere. For most of their services, drivers use their own personal vehicles and are not professional chauffeurs. Uber is similar to a taxi or limousine service, except they do not employ the drivers and they do not own the vehicles driven.

Uber offers five different services: UberX, Uber Taxi, Uber Black, Uber SUV, and Uber Lux. Not all of them are available in each city. The company was originally founded in 2009 with Uber Black, a chauffeur service where drivers are required to drive high-end “black cars”. Now, Uber is more well known for UberX, their low-cost service that competes with taxis and other transportation network companies which was founded in 2012[11]. Uber SUV and Uber Lux are both specialized; Uber SUV vehicles must be a high-end SUV that fits up to six people, and Uber Lux must be luxury cars. Uber Taxi actively works with local taxi services.

With the app, customers simply press a button to say that they need a ride. The app uses GPS to locate and call the nearest driver. It tracks the driver as drive towards the customer, texts when they arrive, but also gives the driver’s contact details just in case. Customers are able to get a rough fare quote before the order the ride and then pay through the app. Additional features include fare-splitting between friends who also have the Uber app. After the ride, customers are encouraged to anonymously rate the drivers.

Uber drivers are independent contractors. They turn on the app to let people know they are available and many also work with competing companies like Lyft. Roughly 75% of the fare stays with drivers[12]. Drivers are charged $10/week to use an Uber iPhone that only runs the Uber app. They must have a valid driver’s licence, pass a DMV and background check and drive a vehicle that is newer than 2004 [13].Uber covers their drivers with commercial liability insurance as long as they have the app on, even if they do not currently have a passenger in the car with them. Just like customers rate them, drivers are able to rate customers after their Uber ride.

Airbnb

Airbnb connects people who want to rent out their space for short-term stays with tourists or others who are looking for accommodation.

When searching through Airbnb, guests can choose their price range and between three options of accommodation: shared room, private room, or entire place. They then request to book with the host they have chosen, and wait for the host to accept. Some hosts automatically accept (Instant Book), but otherwise have 24 hours to respond to a guest’s request. Hosts are free to make their own house rules, check-in/check-out times, and cancellation policy. They can also require a cleaning fee or deposit, the latter of which Airbnb will hold until after check-out. Airbnb will also hold booking fees until 24 hours after check-in, just in case of last-minute cancellations or issues.

Hosts and guests are both required to sign up with an email address and a verified phone number. Facebook Connect is encouraged since it allows other users to see connections, but not required. As of April 2013, all users are required to also upload a picture of piece of government-issued ID. After all stays, guests are encouraged to review hosts, and hosts can also review guests.

Airbnb’s primary source of revenue is a service fee they charge on each guest booking, which is usually between 6-12% of the per-night rate. They also charge the host 3% of the per-night rate for every booking[14]. In some jurisdictions, Airbnb will also charge a hotel tax depending on local regulations[15]. They also tracks host’s stays as rental income for income tax purposes.

UrbanSitter

UrbanSitter Plans for Parents

UrbanSitter is a peer-to-peer company that connects parents with nannies and babysitters (sitters). Both parents and sitters are required to sign up with Facebook, so they can see if there are social connections between them. Parents can either post a job or search through available sitters in their area. When looking through possible sitters, they can see reviews from other families, if they have gotten requests to come back from other families, their video profile and if they have had a background check done.[16]

UrbanSitter makes their revenue through connecting sitters and parents, and not on the transactions that take place between them. Parents can either pay per sitter (to interview and hire just one), get a Premium per month account (unlimited interviewing and hiring). They can pay their sitters through cash or with credit card (although there is a $7.50 service fee on credit card transactions if they don’t have the Premium account). Sitters are encouraged to get Premium or Elite plans, which they need to get a background check done through the site and have it show on their profile. They encourage parents and sitters to comply with minimum wage laws and tax rules, but does not interfere with payment agreements between them.

Couchsurfing

Couchsurfing is unique among “Uberified” companies in that it is (mostly) free for users. Similar to Airbnb, it is built around the idea of connecting those who have space to rent out with those who are looking for a place to stay. However, spaces are not truly rented out, since no money changes hands. Couchsurfing promotes itself as a community and a resource for low-budget travelers who are willing to participate and meet others.

Another difference between Couchsurfing and the other sites mentioned above is that everyone, whether supplier or consumer, creates the same type of profile. For Uber, drivers and passengers see a very different interface, as do hosts and guests for Airbnb, and parents and sitters for UrbanSitter. The major thing Couchsurfing pushes for from their users is for them to put as much information in their profiles as possible, as it creates more trust between users when they can see more information.

As a member of the Couchsurfing community, no one is required to host a traveler or use the site to find a place to stay. Members are only encouraged to participate in local events, as many cities have at least one meetup per week. All the functionality of the site is free for users. There is the option to become a “Verified” user for $25 per year[17], however most users choose to not use this function.

Political and Legal Implications

Peer-to-peer service providers, such as Uber, that make up the sharing economy currently operate in a legal grey area, as they do not fit into the traditional organizational mold. This is forcing government officials to consider a new set of issues and concerns that they hadn't had to face in the past. The regulations that have been put in place to protect consumers and that are applied to the traditional business model are not easily applied to organizations in the sharing economy. This means that cases arising during the growth of the sharing economy will be precedent-setting.

As "suppliers" such as hosts and drivers in Uberfied organizations are defined as independent contractors rather than employees, there are concerns about whether the rights of those working for these organizations will be respected. For "employees" who are highly dependent on the income from these companies, they are more likely to be willing under below average conditions, and they may not be protected by local employment laws and regulations [18].

Another issue has arisen with respect to insurance and liability with peer-to-peer services. As the industry concept is new, the rules and guidelines are nonexistent or unclear. A recently leaked copy of Uber's insurance policy terms has been dissected and criticized by media. Critics are now asking: how will Uber (and other organizations in the sharing economy) be held liable and how will their ambiguous insurance policy protect both drivers and passengers of their service [19]?

Questions about accountability are also raised in relation to an organization's liability for the actions of their "employees" (or, as Uber calls them, independent contractors). Despite relatively extensive background checks, there are still instances where Uber drivers are accused of assaulting passengers. Legal proceedings will now decide if and how Uber will be held responsible.

One possible indication of how the peer-to-peer firms will be treated with respect to liability issues is shown by a case in which an Uber driver with one previous felony conviction had a physical altercation with a passenger. The driver was charged with battery on a transit passenger, and Uber was not charged in the complaint[20]. If this case is any indication of the future of liability for organizations in the sharing economy, then users may be at greater risk than originally thought.

Airbnb in New York is a case demonstrating the effect that varying laws has on peer-to-peer applications. New York has unique laws regarding what is considered a hotel. For example, it is illegal to rent out an apartment in New York for under 30 days unless the owner is residing in it at the time of rental[21]. This greatly limits the demand for Airbnb, as many of it’s users are looking for short term rentals. Opponents see Airbnb as a company that is bending the rules to basically rezone residential areas into hotels[22]. Not all cities are being inflexible with the arrival of Airbnb and other peer-to-peer firms. Amsterdam passed the first “Airbnb-friendly” law, allowing residents to rent out their homes for a certain amount of time per year, if they pay the appropriate taxes [23].

It is not only the organizations themselves that are being affected by new regulations in the sharing economy. Users (both good or service providers and consumers) are also being affected by regulations, and some are being threatened with fines for not abiding by regulations.

There are also users who are abusing the sharing economy to avoid taxes and regulations in effect in the traditional market. For example, landlords are advertising low priced accommodation, however they are renting out accommodation to Airbnb guests that does not meet the regulations put in place to keep hotels safe and clean. Certain users are now simply using organizations such as Uber and Airbnb to avoid the regulations that were put in place in order to protect consumers.

It is easy to criticize government officials who publicly oppose or heavily regulate entrants in the sharing economy. However, from a government perspective, it is difficult for them to allow organizations in the sharing economy to operate before knowing how they can regulate, enforce, or even monitor them.

As new laws and regulations are set, we may see changes in how these Uber-fied industries operate. Or, we may see how these companies change legislation and what is considered the norm in their industry.

Notable Legal Cases

The following are some of the high-profile legal cases that are bound to shape the future of companies in the sharing economy:

  • Uber driver hits a fire hydrant, which then hits and injures a bystander[24]
  • Uber driver hit and killed a 6-year-old girl, whose parents are claiming that the driver was interacting with and distracted by the Uber app at the time. Uber is denying fault and liability, since the driver was not accepting or requesting a fare at the time[25].
  • Uber driver charged with sexually assaulting passenger[26].
  • Woman allegedly raped by Uber driver in Delhi, India[27].

Uber in Vancouver

In a highly public debate in Vancouver, the local government has forced Uber out of the market through legislation. The BC Passenger Transportation Board (PTB) declared Uber cars as limousines/town cars, requiring Uber drivers to charge as a limousine service - meaning a minimum rate of $75. This took away Uber’s advantage, making it too expensive a service to be competitive. Uber reportedly begun "secretly" operating again in October, 2014, despite city council's decision in early October not to allow Uber to operate for at least six months. Uber drivers were considered unlicensed taxi drivers, and were threatened with fines of $1,150 for operating without a license. [28]

Privacy

As the uberfication of online services occur, there are questions with big data and what happens with it. With millions and millions of data being collected every single day, users who want to use service are subject to privacy laws that collect user data. Much similar to Facebook constantly updating and changing its policies, users of uberified services who benefit from strong networks have little to say if they want to continue using the service. Not only is this concerning for protecting private information, but with more advanced technologies there is a higher precision and quality of the information as well. [29] For example, Uber can not only track the GPS location of an individual, but also find out the frequency of your visits and who else went to the same location. [30] With increasingly accurate information and tons of it, potentially hackers can gain access to this highly sensitive information that include personal information with credit card information. Multiple companies having had hacked databases, such as Snapchat, [31]create general uncertainty from users. Though Snapchat had leaked photos, and Uber with GPS information, with growing and powerful network effects, the massive amounts of sensitive data collected if released, has potential to harm millions of users. For example, as per Uber's privacy policy, they "may use Usage Information for a variety of purpose, including to enhance or otherwise improve the Services. (Uber. 2014)"[32] They can collect the data for any purpose. Though the policies reflect what other technological companies would collect for personal data, the public interest is becoming more concerned with the repercussions. Some users argue that this type of data should be protected under similar conditions as health or financial information, while others disregard the policies as the benefits of using the service outweigh the costs.

Sharing Resources

Economic Implications

Uberfied companies in the sharing economy have one main intended effect: to reduce consumption and increase the efficiency of resource allocation. The model of sharing resources, turning resource-owners into suppliers in a market, affects various facets of the economy through different channels.

Services like Uber that act as an intermediary, connecting a supplier to a demander, have the obvious implication of disrupting the current industry suppliers. Customers suddenly have an entirely new source of obtaining a product or service, often at a lower price than traditional suppliers. Retailers and suppliers in the traditional market are being cut out of the equation, as companies in the sharing economy are allowing owners to essentially rent out their good or service directly to consumers.

The increased competition in any given industry also has the anticipated effect of decreasing price. When supply increases, the product or service becomes increasingly commoditized, forcing suppliers to compete on price. Competition also argues that, as companies in the sharing economy such as Uber and Airbnb aren't regulated in the same ways, that they have an unfair advantage. [33]

The decrease in price is a benefit for customers - they receive the same quality product at a lower price. In markets like the Vancouver taxi market, where the services is perceived as overpriced, this can be a good thing, bringing prices down closer to customer valuations. However, this may also have negative implications in industries where the incumbents cannot compete with the lower prices of new entrants. Some effects include worker’s wages remaining stagnant, as suppliers may try to cut costs in their attempts to compete on price. They may not offer their employees the same raises or benefits that they would have prior to the new entrant. Or, in cases where suppliers are self-employed, they may not be able to lower their costs any more to compete, and are forced out of business.

On the other hand, peer-to-peer service platforms create a large number of jobs. By allowing individuals to work on a flexible schedule, at times and places that work for them, companies like Uber attract a larger number of employees. These organizations also often require little from the potential supplier for them to be accepted on the platform. For example, Airbnb requires very little from it’s renters before they can list their space online. The low barriers to employment allow more people to join the platform as a supplier. The model is to employ a greater number of people, and allow them to work hours that suit them.

The general consumer outlook on the sharing economy has been summarized as a means to reduce consumption and increase the sense of community. However, others have argued that the shareholders of these growing organizations do not necessarily share the values of the general population[34].

One of the greater concerns is that, although technically innovative, the business model of companies in the sharing economy are not updated, and run on the same "business-as-usual" model [18]. This leads to the worry that the objectives of the shareholders of Uber-like organizations may not align with the long-term economic interests of individuals in the community [34].

Although organizations in the sharing economy are creating jobs, it has been argued that they also act as a disincentive for creating stable, "normal" jobs, and for striving for zero unemployment [18]. The jobs created by sharing economy corporations are generally not secure or permanent, but instead are short-term and undependable. There is a risk in trying to make a living through the sharing economy.

Social Implications

Risk and Safety

The basic requirement for on-demand, peer-to-peer services to be successful is trust. That is, both parties must be willing to trust one another to provide the said product or service in lieu of the formality of a traditional contract or safety net. In order to lower the barriers to the marketplace, building a trusting relationship is key.

Uber Safety Fee
Interestingly, Uber instituted a "Safe Rides Fee" of $1 in Canada and the USA for UberX rides; although, this practice has also stirred quite a bit of backlash from users as well. Uber states that this fee covers background checks, motor vehicle checks, driver safety education, and other safety precautions as well [35]. Though, with the recent media attention Uber has received regarding the safety of its users, the reliability of this method is in question.

There are three main mechanisms by which trust can be established. Firstly, people may choose to provide information about themselves, this may include: hobbies interests, music preference, car ownership details, etc. Alternately, there are also users who become verified via their Facebook profile. This allows potential clients to know about a person before any meeting or exchange even occurs. In order to further build credibility, a user may even list others in their online network who also use the said service. Users may feel that this reduces their risk of using a platform and provides a greater sense of safety.

Secondly, peer-to-peer ratings and reviews (i.e., Airbnb) also serve to establish trust between parties. The more (positive) reviews that are written by customers about another user help to deem that party as credible. It may also be said that a certain number of reviews may be required in order for the rating system to useful for the purposes of peer review.

Thirdly, some platforms themselves have also instituted mechanisms to weed out any “bad apples.” For example, RelayRides, a car rental service, will not allow any user caught driving more than 20 miles over the speed limit use its service. Lyft, a ridesharing platform, only allows drivers who pass a road test and background check to be affiliated with its service. Additionally, all drivers must be approved by a mentor, who will also examine their personality. In turn, this allows the platform to gauge the personability and communication skills of its drivers so that their customers receive reliable and quality service. Lastly, DogVacay, a home dog boarding service, has a five-step approval process that has: training, videos quizzes, and a telephone interview [36].

These safety mechanisms can be used together or combined separately in order to increase safety and reduce risk. However, one may infer that combining all three allows for the most comprehensive analysis and thereby increases trust on both ends. Most importantly, with the rapid adoption of shared economy platforms, most people have to become familiar with these platforms, because that is where the money is.

Mobile Payment Process

Mobile Phone Payments

While mobile phone payments (m-payments) have revolutionized the marketplace, there is still concern regarding the benefits and issues related to automated payments. Quite notably, the greatest benefit of m-payments is that it allows for convenience. Essentially, customers are connected 24/7 and are not restricted when it comes to making a purchase on a specified mobile platform. Leading mobile payment platforms include Square and Dwolla [37].

Naturally, when any type of transaction occurs online, questions arise with respect to security and privacy of information. Thus, a large threat can occur if the platform is hacked and sensitive information is accessed.

Technological Implications

Google and the Self-Driving Car

Google unveiled its prototype for its self-driving fleet of cars. Currently Uber is “expensive” because consumers must pay for the driver also sitting in the car; however, by removing the driver from Uber’s platform, it is able to reduce significant overhead. While Uber’s CEO has stated that its self-driving cars are still decades away, it is notable in that it may further strengthen the concept of collective consumption[38]. As well, if self-driving cars do eventually become a part of Uber’s business model, this will positively impact social and environment aspects as well.

Partnerships

#UberTREE - Uber partnered with the HomeDepot for a one-day christmas tree delivery service. Uber offered an UberTREE option with its application, which allows users to order a Fir tree to their homes for $135 [36].

Benefit Cosmetics - During New York Fashion week in 2013, Uber offered a Benefit option in its application, which allowed users to book makeovers and consultations with Benefit Technicians. By booking an appointment, users automatically booked Uber’s service to take them to the Benefit boutique [35].

United Airlines - Within its application, United Airlines allows users to book Uber’s services for pick-up and drop off to various airport terminals. This partnership followed Uber’s campaign with Hyatt Hotels, which allows users to book cars in a similar way [39].

Uber Christmas Tree Delivery

Implications

It is clear that Uber has been using its partnerships to add value to its service, which makes it more likely to attract a broader customer base. Other notable partners include Starbucks and OpenTable. Uber’s strength lies in its ability to service many industries.

Diagram of Rideshare[40]

Environmental Implications

Peer-to-peer platforms allow people to lead collaborative lifestyles; that is, they share assets such as time, space, skills, and money. With the acceptance of used goods and products as a social norm in today’s society, the ability to reach critical mass and lower the impact of consumerism is also strong. In turn, this eliminates massive amounts of waste and emissions from articles that would have otherwise been newly manufactured or disposed of. Examples: ThredUp: trade outgrown children’s clothes, TaskRabbit: earn money helping others complete chores/tasks

Given the fact that approximately 20% of the world’s population is responsible for 80% of all resource consumption, an opportunity arises from resources to be managed more effectively[41]. Moreover, this can greatly impact the quality of life of people around the world.

It has been found that every car-sharing vehicle on the road lowers the total number of vehicles people own by 9-13, this amounts to roughly $270,000 revenue loss to car manufacturers [42]. Indirectly, this also impacts car loans, fuel, and the auto parts industry. Similar direct and indirect benefits can be recognized for nearly all industries where peer-to-peer mobile platforms exist. However, on the other hand, there may be more cars on the road, as Uber does not regulate the number of UberX drivers who sign up; therefore, this can also be seen as a negative effect. Uber and other similar ridesharing services have yet to release statements on their environmental impact within the areas they operate in.

With increased pressure on household incomes, peer-to-peer platforms also allow for economical stability. There is great potential for impact in developing countries and people belonging to lower socio-economic status, as mobile applications are a cost-efficient way to access a wide array of products and services that would not otherwise be available.

The Future

The future of the uber-ification of services remains unclear; however, our belief is that this movement of “uber-ifying” will continue to disrupt traditional services for years to come. From a sustainability standpoint, we have seen tremendous momentum in services like Uber and Airbnb, but despite having raised millions of dollars collectively, these companies need to continuously cultivate their business strategies moving forward so that they can remain competitive within their respective industries.

Services like Uber are built upon the principle of sharing resources (also referred to as the peer-to-peer economy). In 2013, Forbes forecasted the sharing economy to grow at a staggering 25% with revenues to end-users exceeding $3.5 billion. This substantial growth is backed behind several factors, which include: the rise in income inequality, increasing volatility in costs of natural resources, and the increase of global crises. These driving factors, along with the changing preferences of consumers are likely to propel the uber-ification of services forward. However, the principle of a sharing economy is not without limitations. The biggest barrier for this type of economy and the uber-ification of services are the regulatory uncertainties that are in place. Many of the prevailing arguments against services like Uber suggest that the company has an “unfair advantage” as it does not face the same regulations that taxis face. In light of this, Uber has repeatedly defended itself by reiterating that the company is a “technology” company and not a “taxi” company, and thus should not be under the same government regulations as taxis (Miller, 2014).

Given this potential for growth and demand, we see the future of uber-ifying services having the largest (and most disruptive) impact in the following industries: healthcare, education, and travel.

Healthcare

Accessibility to healthcare is an issue in many regions; primarily in areas which are underdeveloped. One of the biggest trends in technology is the emphasis on health and wellness. For example, we have seen everything from innovations in wearable technology that track sleep patterns and monitor heart rates to the implementation of iPads in operating rooms. In addition to all of the innovative hardware we are seeing, there has been an influx of services that follow a similar model to Uber. For example, companies such as ZocDoc seek to increase the accessibility to healthcare by offering a service that connects consumers to medical professionals in real-time. Many of these new platforms differ in comparison to their traditional counterparts because they do not require the heavy infrastructure and capital that are needed.

In the future, we can expect to see an increase in services that bring medical consultation and professionals to an individual in their very home. Whether this will be available on a mobile application or web platform remains to be determined, but it is certain that the technology to bridge consumer to a service professional is there.

Education

The advent of the internet has cultivated several breakthroughs in the area of education. Similar to the health care industry, accessibility for education has always been a major issue. With the rising costs of obtaining a post-secondary education, many individuals are finding it difficult to afford a quality education. In recent years, technology has tried to mitigate this issue by providing additional methods to obtaining an education. Through the emergence of innovations such as Massive Open Online Courses (MOOCs), we are now seeing more alternatives to the traditional learning system.

Education itself has always had a connection to the sharing economy. A great example of this is the community of private tutors who offer their teaching services in exchange for compensation. While there may be a few companies (i.e., CourseHero) that act as the intermediary between customers and expert tutors, there currently is no market leader that is pioneering the disruption of the education industry. In the future, we can expect technology to remodel the education industry by making educational resources and knowledge more accessible.

Travel

The uber-ification of services has led to many innovations that have changed how consumers experience the travel industry. The most notable influence of these “uber-like” services has been the impact they have made on accommodation within the travel industry. Players like Airbnb have revolutionized how consumers experience their travel destinations. By offering low cost and attractive rental options in highly-sought after areas, Airbnb has been able to significantly influence the preferences of its users.

Moving forward, we can foresee the travel industry being revolutionized yet again. The focus up to this point has been on accommodation; however, we believe that the future of this industry lies in bringing the “uber” model to transportation. Companies like Uber may look to grow their portfolio by including long-distance travel options, which could enable users to go from city to city. To develop the travel industry further, we may see innovations that could commercialize ride-sharing in airplanes. Current services, such as AirPooler and Flytenow offer flights within a limited radius, but recent regulations instilled by the Federal Aviation Authority (FAA) have determined that it is illegal for private pilots to offer their services in exchange for any type of compensation, unless they hold a “tough-to-attain” permit from the government. [43]

References

  1. Shontell , A. (2014, November 20).LEAKED: Internal Uber Deck Reveals Staggering Revenue And Growth Metrics. Retrieved from http://www.businessinsider.com/uber-revenue-rides-drivers-and-fares-2014-11?op=1
  2. Griswold, A. (2014, September 11). How Uber and Lyft Stack Up in the United States. Retrieved from http://www.slate.com/blogs/moneybox/2014/09/11/uber_vs_lyft_futureadvisor_study_compares_revenue_users_growth_at_the_companies.html
  3. Lawler, R. (2013, December 19). Airbnb Tops 10 Million Guest Stays Since Launch, Now Has 550,000 Properties Listed Worldwide. Retrieved from http://techcrunch.com/2013/12/19/airbnb-10m/
  4. Tam , D. (2013, December 18). Uber picks up PayPal to drive member numbers. Retrieved from http://www.cnet.com/news/uber-picks-up-paypal-to-drive-member-numbers/
  5. Johnson, R. (2011, July 7). The Rise of the Gen Y 'Sharing Economy'. Retrieved from the-rise-of-the-gen-y-sha_b_891413.html
  6. The Economist. (2014, March 9) The rise of the sharing economy. Retrieved from http://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy
  7. Airbnb Help Centre (2014). What is Verified ID? Retrieved from https://www.airbnb.ca/help/article/450
  8. Gannes, Liz. (2013, April 30). Airbnb Now Wants to Check Your Government ID. Retrieved from http://allthingsd.com/20130430/airbnb-now-wants-to-check-your-government-id/
  9. Lyft. (2014). We Go the Extra Mile For Safety. Retrieved from https://www.lyft.com/safety
  10. TaskRabbit. (2014). Taskrabbit: How It Works. Retrieved from https://www.taskrabbit.com/how-it-works
  11. Tsotsis, Alexia. (2012, July 1). Uber Opens Up Platform To Non-Limo Vehicles With “Uber X,” Service Will Be 35% Less Expensive. Retrieved from http://techcrunch.com/2012/07/01/uber-opens-up-platform-to-non-limo-vehicles-with-uber-x-service-will-be-35-less-expensive/
  12. Huet, Ellen (2014, September 22). Uber Now Taking Its Biggest UberX Commission Ever -- 25 Percent. Retrieved from http://www.forbes.com/sites/ellenhuet/2014/09/22/uber-now-taking-its-biggest-uberx-commission-ever-25-percent/
  13. Uber (2014). Drive with Uber. Retrieved from https://www.uber.com/driver-referral/uberx
  14. Airbnb. (2014). Airbnb: How Payouts Work. Retrieved from https://www.airbnb.ca/help/topic/234
  15. Airbnb. (2014). Airbnb: Responsible Hosting. Retrieved from https://www.airbnb.ca/help/responsible-hosting
  16. UrbanSitter. (2014). How It Works. Retrieved from https://www.urbansitter.com/how-it-works
  17. Couchsurfing Blog (2013, September 5). A Beginner’s Guide to Verification. Retrieved from http://blog.couchsurfing.com/a-beginners-guide-to-verification/
  18. 18.0 18.1 18.2 Orsi, S. (2013, September 16). The sharing economy just got real. Resilience. Retrieved from http://www.resilience.org/stories/2013-09-16/the-sharing-economy-just-got-real/
  19. Fitzgerald Rodriguez, J. (2014, March 24). Uber’s secret, “proprietary” insurance policy leaked. San Francisco Bay Guardian. Retrieved from http://www.sfbg.com/politics/2014/03/24/uber%E2%80%99s-secret-%E2%80%9Cproprietary%E2%80%9D-insurance-policy-leaked
  20. Huet, E. (2014, March 6). Uber driver with felony conviction charged with battery for allegedly hitting passenger. Forbes. Retrieved from http://www.forbes.com/sites/ellenhuet/2014/06/03/uber-driver-with-felony-conviction-charged-with-battery-for-allegedly-hitting-passenger/
  21. Harris, E. (2013, November 4). The Airbnb economy in New York: lucrative but often illegal. The New York Times. Retrieved from http://www.nytimes.com/2013/11/05/nyregion/the-airbnb-economy-in-new-york-lucrative-but-often-unlawful.html?_r=1&
  22. Ozimek, A. (2014, June 23). Is the sharing economy just a scam to dodge good regulations? Forbes. Retrieved from http://www.forbes.com/sites/modeledbehavior/2014/06/23/is-the-sharing-economy-just-a-scam-to-dodge-good-regulations/
  23. Coldwell, W. (2014, July 8). Airbnb's legal troubles: what are the issues? The Guardian. Retrieved from http://www.theguardian.com/travel/2014/jul/08/airbnb-legal-troubles-what-are-the-issues
  24. Fitzgerald Rodriguez, J. (2013, August 8). Lawsuit over injury from airborne fire hydrant tests Uber’s insurance practices. San Francisco Bay Guardian. Retrieved from http://www.sfbg.com/politics/2013/08/08/lawsuit-over-injury-airborne-fire-hydrant-tests-uber%E2%80%99s-insurance-practicesd
  25. Williams, K. (2014, May 7). Uber denies fault in S.F. crash that killed girl. SF Gate. Retrieved from http://www.sfgate.com/bayarea/article/Uber-denies-fault-in-S-F-crash-that-killed-girl-5458290.php
  26. Stein, P. (2014, July 28). Uber driver charged with sexually assaulting passenger in D.C. Washington City Paper. Retrieved from http://www.washingtoncitypaper.com/blogs/citydesk/2014/07/28/uber-driver-charged-with-sexually-assaulting-passenger-in-d-c/
  27. (2014, December 7). India Uber taxi driver in Delhi rape allegation. BBC. Retrieved from http://www.bbc.com/news/world-asia-india-30368479
  28. Weichel, A. (2014, October 31). Taxi app Uber rumoured to be launching in Vancouver on Halloween. Business News Network. Retrieved from http://www.bnn.ca/News/2014/10/31/Taxi-app-Uber-rumoured-to-be-launching-in-Vancouver-on-Halloween.aspx
  29. Timburg, C. (2014, December 1). Is Uber’s rider database a sitting duck for hackers?. Retrieved from http://www.washingtonpost.com/blogs/the-switch/wp/2014/12/01/is-ubers-rider-database-a-sitting-duck-for-hackers/
  30. Warzel, C. & Bhuiyan J. (2014, November 18).“God View”: Uber Investigates Its Top New York Executive For Privacy Violations. Retrieved from http://www.buzzfeed.com/johanabhuiyan/uber-is-investigating-its-top-new-york-executive-for-privacy
  31. Franceschi-Bicchierai, L. 98,000 Hacked Snapchat Photos and Videos Posted Online. (2014, OCtober 15).Retrieved from http://mashable.com/2014/10/13/the-snappening-photos-videos-posted/
  32. Uber. (2013, July 13).Retrieved from https://www.uber.com/legal/usa/privacy#1
  33. Miller, R. (2014, October 8). Airbnb and Uber face some harsh realities. TechCrunch. Retrieved from http://techcrunch.com/2014/10/08/airbnb-and-uber-face-some-harsh-realities/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+Techcrunch+(TechCrunch)&utm_content=FaceBook/
  34. 34.0 34.1 Leonard, A. (2013, September 20). Millennials will not be regulated. Salon. Retrieved from http://www.salon.com/2013/09/20/millennials_will_not_be_regulated/
  35. 35.0 35.1 Uber Support (2014). What is the safe rides fee? Uber. Retrieved from https://support.uber.com/hc/en-us/articles/201950566-What-is-the-Safe-Rides-Fee-/
  36. 36.0 36.1 Lagorio-Chafkin, C. (2014, April 29). Why trust is the sharing economy's pipe dream. Inc. Retrieved from http://www.inc.com/christine-lagorio/sharing-economy-trust-pipe-dream.html/
  37. Rolfe, A. (2014, November 21). The P2P sharing economy. Mobile Payments World. Retrieved from http://www.mobilepaymentsworld.com/the-p2p-sharing-economy/
  38. Newman, J. (2014, May 28). Uber CEO would replace drivers with self-driving cars. Time. Retrieved from http://time.com/132124/uber-self-driving-cars/
  39. Strutner, S. (2014, August 23). Uber teams up with United Airlines, and your ride to the airport will never be the same. Huffington Post. Retrieved from http://www.huffingtonpost.com/2014/08/23/uber-teams-up-with-united_n_5698047.html/
  40. The Economist. (2014, March 3). All eyes on the sharing economy. Retrieved from http://www.economist.com/news/technology-quarterly/21572914-collaborative-consumption-technology-makes-it-easier-people-rent-items
  41. Makwana, R. (2014, June 6). Global justice, sustainability, and the sharing economy. CommonDreams. Retrieved from http://www.commondreams.org/views/2014/06/06/global-justice-sustainability-and-sharing-economy/
  42. Weidner, D. (2014, May 23). The unique risks of 'sharing economy' companies. MarketWatch. Retrieved from http://www.marketwatch.com/story/the-unique-risks-of-sharing-economy-companies-2014-05-23/
  43. Valinksky, J. (2014, August 16). Sorry, But the FAA Has Decided Your "Uber-for-Planes" Idea Can't Fly. Retrieved from http://gizmodo.com/sorry-but-the-faa-has-decided-your-uber-for-planes-ide-1622734282
Personal tools