An ambitious startup named Uber is looking to transform logistics and delivery the way Amazon changed the retail industry. IT executives, get ready for another Internet-driven disruption.
Like Amazon, Uber started with a niche product. In Amazon's case it was books. Uber began as a mobile app enabling city dwellers to summon a car service -- also known as a "black car" -- to get from place to place.
Since it tested in New York and launched in San Francisco in 2010, Uber spread to other cities and suburbs, and branched out to SUVs and plain cars .
I recently bit the bullet, joined the 21st century, and tried Uber for the first time. And then the second and third. I was hooked. It's a fantastic experience.
You can see the possibility for disruption in the taxicab and car-service industry. It's a classic Internet story of reducing administrative costs and friction. The customer doesn't need to bother phoning to get a cab. You just tap a button, and the car appears a few minutes later. Likewise, you don't have to pay when you've arrived; all of that is managed by the app. The passenger gets out of the car and walks away, as if being dropped off by a friend.
The Indianapolis Star's Leslie Bailey explains in this video:
The professional drivers I've talked to love the service. One had been a taxi driver in LA; he said the dispatch companies there are hard to work for, have junky cars, and keep too much money. Uber lets him work independently, own his own vehicle, and keep more of the money. Other drivers say Uber is a great way to pick up fares and extra income during periods when their main business is slow. (One driver complained that the app kept pinging him and drained the battery on his iPhone. I take his opinion with a grain of salt. I've known him a long time. He loves to complain. It's one of the reasons we get along...)
But the disruption goes further than taxis and car services. Because Uber is so inexpensive and convenient, it can replace a car for many people. It has at our house. I work from home, and my wife is home all day as well. We barely need one car -- let alone one for each of us. And yet, every month or two we both have to be somewhere the same day. I used to say what we really need was one-and-a-half cars. And Uber provides that half-car. It's there when we need it. Maybe one day we'll go entirely car-less and just rely on Uber. Maybe many people will.
But wait. There's more.
You don't have to be a Steve-Jobs-ian genius to see that Uber can carry more kinds of cargo than hairless primates. Anything that can fit into a car can be carried by Uber. Imagine every restaurant in a half-hour radius is now a take-out place. Imagine Best Buy beating Amazon at its own game, combining showrooming and product delivery. Now imagine the same networked economies applied to everyone who owns a truck or private plane. The possibilities get unpredictable and exciting.
Which is not to say that Uber is unstoppable. A couple of things can kill it:
Poor execution. That doesn't matter for the purposes of this discussion. If Uber stumbles and falls, some other company will pick up the banner.
Regulatory capture. Incumbent businesses in the logistics and transportation industry have billions of dollars and incentive to fight hard for their survival. Look for them to pass laws and regulations making it hard for Uber and other companies like it (Lyft, SideCar, Instacab, etc.) to do business. Heck, some of these will be good laws, maintaining public safety standards. But Uber has learned to play the regulatory game in California, Washington, D.C., Massachusetts, and elsewhere.
I'm not the only one who thinks Uber is potentially disruptive. Read more:
How the Mobile Internet Puts Zipcar in the Fast Lane
Who Wants a 25-Hour Work Week and a Round Desk?
More Internet = Less Stuff. That's a Big Deal for Business
— Mitch Wagner, , Editor in Chief, Internet Evolution