Are You Ready to Uberize? (OPINION)

by Talk Business & Politics (admin@talkbusiness.net) 79 views 

You can’t ignore Uber’s growth. In the past two quarters, bookings grew from $3.8 billion to more than $5 billion. Net revenue grew about 18 percent, from about $960 million in Q1 to about $1.1 billion in Q2.

Uber says it has 87 percent market share. Even taking the recent quarterly losses into account, the company’s current $69 billion valuation is enough to prompt us to consider the model itself.

We have to wonder about the “Uberization” of every other industry. It seems like a company pops up weekly in supply-chain-related businesses with plans to Uberize something.

Is this about taxis, or is it about something bigger? Uber, Airbnb and a host of others have conditioned consumers to get what they want, when they want it, with a smartphone and an app, and that is a powerful concept. Does it represent a migration away from linear business models to the sharing economy and beyond — to an on-demand platform model? Consider that it’s already changing how automotive manufacturers reimagine the future of transportation.

I know firsthand. It’s changed how we travel, where we consider living, how we plan dinner, how many cars we own and more. And, it’s changed what over 500,000 employees do every day to make a living.

  1. Economists call them multisided platforms because they provide physical or virtual platforms for multiple groups to get together. Multisided companies have been around for a long time, but they are becoming more feasible because of advances in technology and mobility. There are more possibilities for consumers and lower overhead for the companies which provide the services. The ability to scale up or back with demand is especially important with time sensitive services such as room rentals or taxi type services.

In the supply chain, the same idea applies to retailers and suppliers even though it’s not as simple as getting a room on Airbnb or a ride using Uber. Every day, we see many people underestimate the collaboration of all the people, companies and interactions required to take a product from manufacturing plant to retailer and consumer.

The $69 billion question is really this: How will Uberization and the multi-sided business platform play a part in curating what is created and consumed in the largest vertical in the world (i.e. the CPG-to-retail industry)?

Envision a platform that enables interactions between creators of services and consumers of those services in the CPG world. Specifically, CPG companies working with trading partners to manage their supply chains that bring their products to market.  In contrast to consumer-oriented (B2C) platforms, business-oriented (B2B) platforms require a more robust curation due to the complexities of enterprises (versus individual consumers). 

But, business platforms are similar to consumer platforms, each curating for creators and consumers of a specific service — without necessarily owning the assets. For example, Uber curates the process for drivers to create the supply of car rides that users consume, while owning no taxicabs.  

Facebook curates users’ ability to create news that users consume, while generating none of its own content. Alibaba curates the platform for sellers to create product availability for buyers, while holding no inventory. Airbnb curates a place for hosts to create lodging for users who want accommodations, while owning no real estate.

Similarly, a multisided platform would curate the ability for supply chain service providers to create warehousing, transportation and related supply chain services for CPG companies who consume those services, so they can move their products to retailers, while owning no warehouses or trucks.

In a trillion-dollar industry, that might be worth more than $69 billion. 

Dan Sanker is the founder, CEO and president of CaseStack Inc., a logistics outsourcing company located in Fayetteville. He can be reached at dsanker@casestack.com.

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