Let’s talk about why the “Uber for X” Theory is really about People

…although, at first glance, it seems like it’s about technology.

Over the weekend, I was reading this article from FastCo on the “Uber for X” theory and how it doesn’t really work for every industry, and it’s also not a guaranteed win for a new business to take on the Uber business model. A founder can not simply assume that the technology-first (and specifically mobile-first) model can be overlaid onto any traditional business in order to Uberify it into success; you can’t remove the human element from human-provided services such as home cleaning, and you can’t assume that everyone can (or will) always pay for the privilege to have things delivered to their door.

As a previous customer of Handy, I couldn’t agree with this more. I paid an automatically-calculated charge for a random stranger to clean the apartment every two weeks (we never saw the same person twice), and let’s just say that standards of cleanliness vary quite vastly from person to person. I’d rather pay more for someone whose standards are reliable.

While only hiring contractors is quite a way to make a profit, the lack of accountability and variability of give-a-shit on the part of the workers can often leave customers wondering what the heck they are paying for. Part of what made Uber so successful is that they used a technology-only approach as an overlay to an already successful and high-demand, regulated industry. They were also one of the most high-profile users of technology to disrupt that high-demand, regulated industry.

Whether or not Uber’s business model is disruptive has been debated to death. I tend to agree with those who posit that the use of technology was not disruptive in itself, but the invention of UberX followed a trend of ride-sharing that was, in fact, disruptive. UberX has been incredibly successful (moreso than competitor Lyft), mostly because of the market penetration they gained with their original product (now known as Uber Black). People who already own (or want to own) a car? Check. People who are willing to drive said cars to pick up and drop off random strangers as a job? Check. Minus the costs of cab medallions, fleet depreciation, and anything else transportation business owners have to worry about. However, this disruption wasn’t what made Uber successful.

In short, Uberification works not because it’s disruptive, but because it takes a business model that could more efficiently be run as a mobile-first technology model, while delivering superior results and customer cost savings over the older business model. Disruption was a nice side-effect Uber were able to achieve, though.

Business Insider published an article over the weekend about how banking is the next industry to undergo the Uber effect. (Side note: I will admit that BI can be somewhat of a news house of ill repute, but sometimes they are useful.) Their argument is that the initial effect will tank employment in the industry, but it might be saved over time as the value-add will shift from transaction-based roles to advisory services. This aligns pretty well with the FastCo article.

So ultimately what we are seeing is a shift in how people view the technology-first approach; they are beginning to understand that if successfully implemented, it should allow a business to focus on delivery of value, while technology deals with the delivery of process.

So here we have it: “Uber for X” works because it uses technology to free up its people to focus on … people. Isn’t it funny how so many good business practices come back to that idea time and time again?