Adventures in Uberland

 

The Habit 

Nothing is as addictive as a service that is easy, offers instant gratification and solves an everyday problem. I just had to try it once, and I was hooked. Now, you have to realise that it’s not the same in London, where the density and availability of cabs, both private and public is very high. But out here, in New Jersey standing on the highway, and facing the prospect of great head-scratching and then significant time and effort to get practically anywhere, it’s the most obvious thing to do! And once was all it took. 

My name is Ved and I am addicted to Uber. 

Nobody walks in New Jersey. This is almost as much of a truism as “No Snakes in Ireland”. But its true. I found a Starbucks 10 mins away (on foot) from my hotel. To get to it, though, I have to walk through 3 parking lots, a driveway and a stretch of path by the road which I think has just been created for some construction work. Nobody walks in NJ and it’s not designed for walking. Nonetheless, each morning I venture my way to the Starbucks and then head out from there. 

When my coffee is three-quarters finished, book the cab on Uber. It usually takes 7-8 minutes for the car to arrive. It comes right to the Starbucks without my having to give the driver any instructions. I get a warning when the car is 2 mins away. Is it not obvious yet, why I can’t tear myself away? Of course there are moments when it falls over a little bit. But more about that later. 

What’s in It for Me? 

It’s a cashless transaction. I can track the car. You know all of this. 

But I also know the name of the driver and vice versa so I can greet him with a ‘Hello Dan’ – this is a very small thing, but I find it extremely worthwhile. It opens up the space for a conversation. 

What’s in It for Him?

So far all the Uber drivers I’ve met are men. I’m sure there are women Uber drivers as well. So forgive the generalisation. 

Uber hoovers up spare capacity and brings more granularity into the supply side. In other words, you could be an Uber driver for 2 hours a day or whatever works for you. 

I met a driver who was a tech entrepreneur, one who was also driving for a cab company and one who was a student. I learnt that Uber gives each driver a phone with the Uber app installed and everything else disabled. I learnt that thanks to the geofence implemented, if you don’t have the right license / car to drive in New York, the app shuts off as soon as you get on the bridge. 

Finding Nemo

Yesterday, I called the Uber car after my coffee but he struggled to find me. 

 

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But he did, finally. Took him 15 extra minutes. It was a Sunday and I was enjoying my coffee. I didn’t mind. 

 

Mobile Entrepreneur 

Today, my Uber driver was Rob. He told me he’d just started with Uber a month ago, when he quit his job with a software company. Why did he quit? He started his own company. What kind of software? Mobile apps. He said he drives for a couple of hours every day. We had a great discussion about the Uber app itself, the advantages and drawbacks. The geo-fencing, the battery life. 

On Friday my Uber drive was Taj and we spoke about daughters and growing up in different cultures. 

 

Uberisation

Professionally speaking, Uber could well happen to your industry. What if service providers had a platform to offer to users what you do with great investment and commitment? What AirBnB is to hotels, or Ebay is to retailers. These platforms aren’t service providers themselves, but often are really focused on marketplace efficiencies. 

Should you look for these opportunities within your own industry, before somebody else does? That might well be the right question to ask. 

Because, as I’ve already argued before, resisting technology is like resisting ageing

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Is The Payments Industry About To Change Forever?

The greatest irony in the payments business is the belief that consumers want a ‘payment system’. Actually, they don’t. What they want, is to buy things. To consume services. To enjoy movies, food, product. Experiences. We all recognize that payments are necessary to enable this. We are conditioned to know this from a very early age. Nonetheless, no consumer spends time wondering about better payment systems unless they belong to the tech or payments industry as well. 

Payments are like referees or the government. When they’re doing a great job, you don’t notice them. The idea payment system is one that allows you to consume a product and be automatically charged for it, in a fair, trustworthy and transparent way. Think about toll roads that work on RFID, where you just drive through and it deducts an amount from your car. You don’t even need to slow down. 

Despite this, the payments industry as we know it continues to go through violent disruption. 

Consider Square – one of the darlings of the payments industry. Jack Dorsey said this would be how the world pays. Now, having lost millions of dollars, its gross margins are under ever more scrutiny as it also needs to pay the interchange fees. Although it is raising another round of funding at a $6bn valuation, there have been plenty of rumours about a possible sale earlier this year. 

In so many ways, payments are also becoming a feature rather than an app. Hailo, Starbucks and a host of other apps allow payments as a part of the experience. Most of these are enabled through existing credit card based systems. But in future will simply connect to an on-board wallet on your phone. 

Enter Apple. For years, the Wallet space has seen players enter and struggle. Banks, telcos, tech companies, and others have all tried to master the wallet with very limited success so far. Only Paypal, has really managed any real momentum as a payments focused company. The key sticking point has been breaking the vicious cycle of consumer adoption, transaction fees and the retail adoption. 

Apple (at the risk of repeating myself incessantly) are in the right place at the right time. They have the scale to drive bargains with the payments providers, and the ability to reach consumers directly. They have the financial muscle to reshape an industry with new ideas. And they have a model which could potentially bypass the retain POS hardware.

Today, Apple makes an announcement with much anticipated news about the integration of the mobile wallet into the IOS6, backed by deals with the major card providers (Amex, Mastercard, Visa). Also anticipated is the return to the NFC technology it has so far eschewed. 

If this does happen, the world of payments will be a very different one in a year’s time.