Uber has managed to achieve a significant market share in the transport sector by implementing a simple but powerful idea. The company has not invested in a technology from scratch, but has selected a sector with strong demand and built an ecosystem with a wider supply chain. Uber realized that the difference in quality and reliability of cost expectations is competitive depending on the dynamics of the market.
Many believe that the Uber algorithm for the cantilever price that regulates the price of the rate based on demand is a shining example of supply and demand at work. It could be the literal realization of the imagination of every economist that is catalyzed by the mobile Internet. However, is "uberizing" possible for every single sector of the modern economy? While the concept seems interesting to many sectors as a promise for the development of a fairer supply chain, if "Uberization" will gain ground as a popular development model for startup businesses remains a demand.
As the blockchain is co-opted into the traditional business infrastructure, the world will see the concept of "Uberization" rates as well. In real-world applications, blockchain could be the only technology that can solve the problem of trust and minimize the excessive costs of intermediaries. Blockchain platforms provide participants with agency self-organization, and blockchain-controlled communities will have to demonstrate their value and effectiveness beyond the simple theoretical premise that is not necessary for intermediaries in markets that are decentralized and self-regulated.
Currently, many initiatives and projects are trying to grab a slice of the pie from Uberization's vertical markets. The concept of eliminating the need and cost of a third party through the use of blockchain technology is very attractive to many companies and could also help to better protect data from data breaches. Among the main "opponents" of Uberizzazione, there is the concept of humanization, a specific term blockchain that can be defined as "guarantee the integrity of a supply chain ensuring the integrity and provenance of the community that operates "transaction. Within this decentralized framework, conceptual strength and common belief in "humanization" are essential as everyone is responsible for all. While blockchain provides total immutability and security, humanization reinforces each participant's belief that all interactions occur even in an environment governed by a mutually accepted moral framework.
The Current Mania Surrounding Uberization
Service drunking focuses primarily on geographically hyper-local markets, and a fragmented market of many small suppliers tends to be affected by quality control issues such as unpredictable customer experiences. Uber's model attacks this problem simply because of its simplicity. List all available providers, or more specifically 3 million drivers worldwide, customers are able to access a database of verified suppliers and communicate with each other in a secure environment.
Among the highlights of Uber's technology is the "surge-price" policy – when there is a shortage of cars available and the demand for racing increases, the price is higher than average. The combination of the evaluation of market dynamics in real time through the user's smartphone creates a real case study in which the free market wins. The rate calculation process is the sum of the base fare, the fare for the time and the estimated distance of the route and the current travel demand in the area.
Another economic problem that attracts companies to the concept of Uberization is the slight obstacle in economic relations. In places that deal with an increase in the unemployment rate, the high demand for flexible and entrepreneurial jobs is pushing more and more people looking for work in "crowdworking". Uberization increases the monetization of valuable assets such as cars and effectively increases the productivity of their owners. When the concept of Uberization expands to new vertical markets, "personal" assets become commercially productive and "inertized" companies have the potential to reduce operating costs while the private assets of employees are used to provide products and services.
For these reasons, it is easy to understand why the Uber model is appealing as it combines mobile technology, dynamic pricing and dynamic supply to develop a disruptive and enjoyable user experience. Uberization is actually quite similar to The definition of innovation by Saul Kaplan as "a better way to deliver value".
Successful industries that have been Uberized
A large number of large industries have already adopted the business model of Uber and the question is: how long can the trend continue?
Airbnb: Airbnb is one of the successful startups of the Uber-like business model, which allows property owners to lease their properties through peer-to-peer contracts traded on the secure Airbnb platform. The result of the Airbnb practice has accepted many criticisms around the world.
Deliveroo / Zomato / Uber Eats / Wolt: The delivery of food and personal items has become a huge business and sophisticated vehicle fleets use complex routing algorithms to organize efficient delivery plans that ensure that each customer receives their product as quickly as possible. Postmates aims to be the & # 39; Uber & # 39; of goods and their delivery service sends couriers to deliver local goods to customers in less than an hour.
Doctor Anytime / StyleBee / Uber Healthcare: This Uber-like tool allows people in need of health-related services to get a provider to visit them and take care of their health. The same is extended for beauty service providers, making the appointment process less complicated and efficient.
HouseCall / Handy: It is generally proven from the experience that finding a good technician or a home service provider is not such an easy task. Today there are several Uberized startups that aggregate service providers as on-demand mobile services and set some standards of service.
Risks of Uberization
First, it is possible that the upbringing of goods and services will introduce a new degree of uncertainty over the amount of stagnation remaining in the economy and the true potential for growth above the trend. For example, the Uber model could increase the potential value of private vehicles, but could reduce the need for car ownership. The above shows a problematic issue concerning traditional measures of economic easing.
Secondly, there are several risks to the human side of the Uber model. There are big questions that revolve around the fact that the Uber startup workers in the new era have a sense of commitment. In the process of simplifying work routines, companies need to question whether potential employees have the right skills and training to do the job, or even if they have the appropriate level of judgment and discretion to take initiative from the generation retired Baby Boomers.
Third, another important issue that may arise is related to safety standards arising from a workforce that could be less engaged than professional taxi drivers. There are already a number of examples of drivers who mistreat customers during Uber routes despite the company's leveling practice.
Fourth, there are concerns about the economic benefits of employees based on a work program similar to that of Uber and there are some serious drawbacks that can occur if the model expands rapidly. A recent one relationship from the International Labor Organization, he calculated that a mass US average worker earns less than $ 5 an hour.
Finally, rapid Uberization can lead to unsustainable migrations in large cities by workers with the hope of better living conditions and job opportunities. In the long run, this could lead to irrecoverable changes in climatic conditions, health, infrastructure and social stability.
Instances of bankruptcy in Uberization
Many competitors have been inspired by Uber and have tried to adopt their business model in the last two years. However, there have been many failures between them.
Homejoy is a cleaning service on request for homes and offices, making use of independent cleaners. The main problems he has faced Homejoy were the following:
- Customer loyalty – Since the only marketing aspect adopted by the company was Groupon's offers, the massive use of the promotional codes of registration by the customers led to few monthly purchases. At the same time, the competitors managed to keep the customers and at the end Homejoy was unable to conquer any portion of the market.
- Unsustainable Expansion – In its initial phase, the startup raised around $ 30 million and investors expected a rate of rapid growth. To satisfy investors, the company has rapidly extended its service to around 30-36 cities in 6 months. Because customer loyalty was low, expansion proved to be very costly for the company.
- Lack of quality control –: Homejoy was unable to monitor the quality of services rendered by independent contractors, so the customer experience was not uniform. This has led many customers to uninstall the app and leave incorrect ratings.
Exec is a service on request to provide workers with any kind of random work.
The main problems with Exec were the following:
- High demand, limited offer – Exec aimed to provide workers for all types of work, but struggled to provide enough qualified work in every particular field. The expensive overhead costs and high demand for workers during the holidays and weekends meant that commission workers were not available during this period. This involved sending employees to serve customers.
- Budget issues – Most of Exec's expenses were given to IT engineers who were constantly working to improve the quality of the application. The commission they charged was 20%, and the costs for customer acquisition, customer service, and the provision of sufficient supplies had to be paid for by this considerable amount.
Rivetto and Sway
Rivetto and Sway it was an on-demand service to provide fashionable and personalized sunglasses to women. The main problems with the start were the following:
- High cost of customer acquisition – Although they turned to a fashion-conscious audience, they did not realize they had to deal with discerning clients. Customers wanted to try glasses before buying, which increased shipping costs. As a result, the company has struggled to attract additional capital despite an admirable idea.
- Fierce competition – Warby Parker has given strong competition to Rivet and Sway in terms of investments. If Rivet and Sway had been adequately funded, they could support a system that would allow customers to try the product and return it if it was not satisfactory. Alternatively, the company could become hyperefficient in launching online showrooms.
What is the alternative: humanization
Although the Uberization brings many benefits to the table, there is still a need for humanization in business. Regardless of the first association aroused by the term – which acts as a human being in business – the term is widely applicable.
Airbnb and Uber customers feel part of a community of colleagues and the model between the service provider and the customer has changed drastically. Modern customers want to interact with a service provider in a trust relationship similar to the type they would have with a friend or peer. While the service of current companies is personalized, trust and transparency in the concept of humanization are implanted in business relationships.
Many companies are trying to enter the era of humanization by making their policies and their operations more "human-oriented" instead of turning their workers into algorithmic "masses". It is a very difficult situation considering that many companies have used artificial intelligence to automate the processes that were once managed by humans. Within the concept of humanization, all company procedures are customer-oriented and linked to one another as interacting parties.
Although the trend is relatively new, with most fans attempting to approach the humanization from a theoretical point of view, its true potential is widely recognized by large companies that consider humanization a business model that changes the game. For example, Humans.net – a global game change in the freelance market promises no cost, peer-to-peer market where job seekers can connect with job providers. The company has already performed a $ 10 million of initial funds round, which led to the participation of over 200,000 users in four states in the United States. Essentially, Humans aims to solve most of the problems that are by-products of the Uberization process.
How Blockchain fits in this area
The world has seen "dehumanizing" technology that seems to diminish people's ability to communicate with others or to function effectively in the world. This kind of technological progress creates new boundaries between people, rather by erasing old ones. Humanizing technologies are those that meet one of the three basic human needs:
- Security and protection
- Human relations
- Personal growth
A number of CEOs, researchers, academics and analysts are aware of the dehumanization brought about by technology. The following opinions attempt to link the capacity of the blockchain with the needs that must be addressed by the humanization of enterprises.
Decentralization in a blind environment
"Transformation services such as Uber and others have evolved into giant centralized companies, keeping about 35% of all transactions at the expense of the people running the service, Blockchain as an immutable ledger allowing for the first time in the revolution modern technology the creation of truly decentralized indices to facilitate transaction and business execution in a blind environment of trust that rewards human creativity without the pains of centralized services. "
– Vlad Dobrynin, founder and CEO of Humans.net
Durability and robustness
"As revolutionary as it may seem, Blockchain is really a mechanism to bring everyone to the fullest degree of responsibility: no more transactions missed, human or mechanical errors or even an exchange that has not been done with the consent of the parties involved. , the most critical area in which Blockchain helps is to guarantee the validity of a transaction by registering it not only on a main register but on a distributed system of connected registers, all of which are connected via a secure validation mechanism. "
– Ian Khan, TEDx Speaker, Author, Technology Futurist
Transparent and incorruptible
"Blockchain solves the problem of manipulation.When I talk about it in the West, people say they trust Google, Facebook or their banks, but the rest of the world does not trust organizations and companies too much – I mean Africa, India, Eastern Europe or Russia: these are not places where people are really rich.The opportunities in Blockchain are the highest in countries that have not yet reached that level. "
– Vitalik Buterin, inventor of Ethereum
"2017 will be a crucial year for Blockchain technology, with many start-ups in space starting to generate revenue – providing products to market demands / values - or steaming due to lack of liquidity – in other words, 2017 should be the year when there is more implementation of products that use Blockchain technology, and less talk about Blockchain technology is the magic powder that can be sprayed on everything.Of course, from the customer's point of view, this will not be obvious given that Blockchain technology should be predominantly invisible – even if its features and functionality improve the lives of people / business.
Personally, I know a number of large-scale Blockchain technology applications to be launched shortly, 2017. This implementation phase, which 2017 should represent, is a crucial step in the wider adoption of Blockchain technology, since it will allow skeptics to see functionality, rather than listen to its promise. "
– George Howard, associate professor at Brown University
It seems that so far there has been little attention to the human adoption of Blockchain. The humanization of Blockchain technology explains how it can create applications and tools that can positively affect our daily lives.
"The humanization of blockchain technology explains how you can create applications and tools that can have a positive impact on our daily lives: meeting the needs of consumers for rewarding experiences, trust and reliability, convenience, security, belonging, lower costs and immediate gratification. "
– Alexander Johnson, co-founder of Everus Technologies
Bring humanization to the next level
Another example of a company that adopts measures to integrate humanization into drunken business practice is Humans.net. Unlike Google looking for information, Humans.net searches for people by allowing them to improve the way they relate to each other in many ways. Humans.net is a truly decentralized platform, managed by people, for people. There are no intermediaries, no taxes, and a larger share of the platform's revenue is redistributed to contributors, unlike transformation services such as Uber, which maintain about 35% of all transactions at the expense of the people running the service.
As Humans.net CEO Vlad Dobrynin explained, Humans.net returns to its users, returning a significant portion of its revenue to active users who make the platform possible, unlike big conglomerates like Facebook that get billions of dollars from the sale of their users' data.
Elimination of Uber model tariffs
Some would say that the advent of Uberization was the proletarian response to an unjust supply chain market in countless sectors of the labor market. The resulting increase in competition has created new opportunities for workers and improved the quality and variety of services available to customers, while reducing the price. On the other hand, these savings have been absorbed by the huge "Uberized markets" rates, which account for almost 20% of the revenues generated by service providers. This produces a cyclic enigma in which providers see their income reduced, while their work is becoming increasingly difficult.
Today the model of Uberization is gradually replaced by the concept of humanization and the integration of blockchain and artificial intelligence could eventually lead to more decentralized markets. While the Uberization model remains one of the most profitable business models for large companies, humanization can improve the application of this model in a wide range of sectors in which social interaction among the users is the main engine of transactions.