The future of Uber
It is easy to think of Uber primarily as a ride-sharing company, similar to how we thought of Amazon to be just an e-commerce company 10 years ago.
But as Roy Amara said, we overestimate the impact of technology in the short-term and underestimate the effect in the long run.
Ten years from now, Uber’s going to look completely different. The company is silently going through a massive expansion, across verticals, that will change the DNA of its business. Over the next decade, Uber will create unanticipated revenue channels:
1) Outdoor Ads
Billboard ads will be re-imagined as physical and digital worlds merge. We’ll see ads on Uber cartops, which will open up a whole new platform for local businesses to advertise in-time ads.
This may be the first time that physical ads, at scale, can be made dynamic, digital, and location-data-driven. Read more about Uber’s OOH cartop advertising.
Knowing the financial success and dominance of Facebook Ads, we can tell how lucrative selling advertising space is as a business model would be for Uber, especially when it offers advertisers dynamic rates based on location, time, and content.
The competitive advantage for Uber would be that it knows about your physical movement, your favorite eating & drinking spots, your time preferences, and your willingness to spend money.
2) Local Commerce
What could be better than a two-day delivery guarantee? You guessed it right — a two-hour delivery guarantee.
Amazon is an undisputed leader in supply chain and has built a network of 800 warehouses in the US that allows it to capitalize on supply chain optimization. However, Uber with its ubiquitous presence and partnerships with local small businesses as well as Target, Walmart, and other big retailers, could compete with Amazon with a much larger network of micro-warehouses, i.e. the stores themselves. These micro-warehouses not only make deliveries faster but also make returns easier & less wasteful. Just for context, there are ~2000 Target and ~4000 Walmart stores in the US. And, the penetration of small businesses and local stories in Tier 3 cities and small towns is going to be even greater.
Uber can compete with Amazon on fulfillment the same way Shopify competes with Amazon on creating a digital presence for sellers. This could help with the much-needed resurgence of small businesses and give them back the power to compete!
Uber Eats is just a gateway drug to a much bigger market — Uber Direct. From fresh flowers & toothpaste to iPhones & laundry, all our household items could eventually be delivered by Uber. Could you potentially, someday, order a plumber or home cleaner from Uber? I wouldn’t be surprised if Uber competes with Handy and Thumbtack, and dominates, the handy space because of its reach.
3) B2B Offering
While Amazon started its journey as an online retailer, its technology and engineering teams soon realized the complexity of managing and scaling the IT infrastructure needed to deliver their digital experience with performance, uptime, and quality. Compute and storage wasn’t easy. But, they innovated because they had to in order to operate at Amazon’s scale. Soon, Amazon realized that this challenge wasn’t unique to their business but they were uniquely positioned to solve this problem better than anyone else. As a result, AWS was born by abstracting the technology they built for themselves and offering that as a platform to others. This then allowed other big and small organizations to outsource the complexity of IT infrastructure to Amazon per a “pay-as-you-go” model.
The timing was perfect because more and more businesses went digital and generated exponentially more data than before.
The timing is perfect now for businesses to outsource the complexity of logistics to Uber because more and more businesses are adapting to the needs for the “work from home” and “shop from home” culture.
Logistics-as-a-service can play the same role for Uber as AWS did for Amazon. Uber’s ex-CTO, Thuan Pham said “Uber’s plan is to become the AWS of logistics. The fraud-detection capabilities and the mapping capabilities and routing capabilities — all those things, we don’t see why we can’t ultimately offer that to other people to build on top of it”.
Just like Netflix uses Amazon Web Services for its computing, we shouldn’t be surprised if Uber’s competitors use their logistics service at some point. Uber Freight is going to shape this story over the next decade.
Uber Freight is just the beginning of this trend (check out their YouTube channel). There are infinite possibilities for Uber to monetize logistics AND the technology assisting the logistics as B2B offerings.
If you like this article, please give it some love 👏. Do you think I missed something? Did you find any holes in my arguments? Did you think these were pretty obvious? Let me know in the comments.
If you’re interested in reading more about the possibilities that lie ahead, follow me on Medium & on LinkedIn and subscribe to this publication: Predict.
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