Uber’s Next Moves [part 2]
This is part 2/2 of a piece discussing what Uber might look like in the future. Check out part 1 here.
2. Services as a Service
At its heart, a delivery service removes the need to go out and bring something home. But what about services that already require someone to come pay a visit to the house? Think handymen, or snow removal; these providers need transportation, and Uber can provide that of course — Uber for Business is a great solution for service businesses to scale without having their own fleet of vehicles at the ready — but more powerfully Uber can connect customers with professionals in their area who make house calls.
Go-Jek does this already in Indonesia with particular industries, including auto repair, house cleaning, massages, and beauty services. It has been very deliberate in expanding carefully to particular industries, putting a lot of thought and diligence into its offerings, making sure that their network of service providers is licensed, vetted, and trustworthy before allowing users to summon them into their homes.
Uber could expand to these services as well, and even beyond. Why not use the app to call for a landscaper to come and spruce up the front yard or mow the lawn the day it’s needed? Or find a mechanic to come make a minor car repair in your driveway? Why not be able to call a chiropractor to come check up on you at home when your back makes it impossible to go anywhere? The end game is to provide a one stop shop for anything: Uber becomes the portal through which to order any item or service to your home. Over time, even businesses that didn’t realize they were in the at-home service category could take advantage of Uber’s demand aggregation.
Uber could further build out the platform by allowing a uniform interface for businesses to be able to schedule their services through the app as well. For customers it’s easy, not just because of a shared interface across a range of services available, but also for the fact that they can control all sorts of appointments from their Uber app, from when someone will come to help assemble furniture to when a doctor will visit an elderly parent, to of course when someone will pick them up to take them somewhere. The breadth of offerings, the quality of services, and the overall ease of use will be the winning factors here for consumers. If gotten right, they will trigger a positive growth cycle for this sector of Uber’s business.
On demand at-home services exist today, but they are fragmented. Wrench for instance sends you a car mechanic at home, Clutter sends someone to take things into storage for you (giving new meaning to Storage as a Service), and perhaps most famously TaskRabbit provides a platform for freelancers who make house calls to offer a multitude of services. But Uber’s scale puts it in a unique position to aggregate a lot of these services, so users can access all of them through one app rather than having to install one for each type of service. This also helps with discoverability, as users looking for one type of service on Uber can strategically be introduced to other types of services they might enjoy. Through a series of strategic acquisitions and partnerships, Uber can make itself into a platform for such services, and pool a lot of the backend logistics as well to streamline across different services (a cleaning van could make a food delivery on its way to someone’s house, for instance).
The key thing for Uber when expanding to services that have an in-home component is to build with safety and security in mind. This is no foreign concept to Uber; ten years ago the notion that we would jump into strangers’ cars with barely an exchange or even a glance at their license plate would have been unfathomable, and yet today it is a normal part of modern, urban life. But as Uber begins to build itself into a Services as a Service platform, it will need to be deliberate and mindful in its expansion to ensure that there are checks and protections for both customers as well as service providers.
A popular template for startups is to describe themselves as being the “Uber for X”, and there are lists of businesses that fit the model. By building out the delivery and services platform, Uber can become the Uber for anything. If executed correctly, this is a huge opportunity for Uber to diversify itself beyond the profit constraints of vanilla rideshareing.
3. Payments platform
For all of these businesses that Uber will become a platform for, Uber also becomes the default payments processor. This already happens for restaurants and drivers who don’t collect money from their customers directly, but rather from Uber. It’s not a stretch for Uber to invest a little more into building out its payments platform and begin to compete with the likes of Stripe and Paypal. It could commoditize its payments platform, and price it to be competitive with current market players. For delivery and service businesses that do a lot of business on Uber, it might make sense to consolidate to Uber’s payments across the board; for others, it will come down to a cost-benefit decision, which Uber can compete on like every other payments platform does.
Uber also has a really interesting opportunity to become a force in the consumer payments space. Uber is already doing some interesting work here; the recent rollout of the Uber Gold rewards program is reminiscent of what credit card companies do with their miles and points schemes. Granted Uber’s rewards aren’t anything to write home about (somewhere between 1% and 4% back depending on the spending combination between UberX, UberPool, and UberEats), they still indicate that Uber wants to use points to keep customers incentivized to stick with Uber rather than jump between it and its competitors. Uber also offers a credit card with decent cash back rewards, offering another way for frequent riders (and in this case, restaurant and UberEats frequenters), to get rewarded for their loyalties.
Uber’s strongest foray into this space however is through UberCash, whereby Uber incentivizes users to load up their accounts with money to spend on Uber’s offerings. If Uber’s product offerings start to expand rapidly as discussed above and it continues to incentivize usage of UberCash with its discounts and special offers, Uber could very well maneuver its way into becoming a strong contender in the mobile payments space as well. As consumers see the financial rewards and Uber continues to build trust and ease-of-use with its payments platform, it could have a chance at being a real force in the fragmented US mobile payments market, and becoming more similar to mobile platforms like Go-Jek and WeChat abroad.
The best chance of this working however is if Uber becomes an aggregator and platform for delivery and service based businesses; it has a strong impetus for becoming the default processor for these businesses anyways, and can offer customers discounts and incentives in a way that Google or Apple can’t — in-app at the point of payment. By being the platform where the transactions take place, Uber positions itself in a way that other providers who only seek to be the payments conduit can only aspire to.
Uber’s massive transportation network is a huge asset to its operations and logistics clout. Uber’s main ambition is revolutionizing transportation, but Uber can become a platform that facilitates a plethora of other businesses. Leveraging its logistics and demand aggregation strengths to become a services and delivery empire, and using that to bootstrap a robust payments services platform is a promising path forward for Uber.
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