Skip to main content

The logic of Uber & Lyft

Article today says that business travellers are increasingly user Uber instead of rental cars...what a surprise.  What makes Uber so much better than a taxi is that you know who your driver is -- joking aside many times the guy driving the taxi was not the guy on the picture, had no idea where he was going (aside from the major streets). But why car rentals?  In a sense people rent cars because often they cannot trust the local taxi service -- if it rains or its shift change or some other reasons.  This is not nearly so much a problem with Uber/Lyft because you know the state of the market; you can visualize the number of Uber/Lyft in your area.  Cannot do that with taxis.  Information has made Uber superior to taxis but also to car rental.  

So you go to a meeting from your hotel having booked your Uber on your way out -- go to the meeting and as you sit comfortably in the lobby of your meeting wait for your Uber to show up...that's so much better than finding a parking space and paying an attendant.  On top of everything else, in Europe at least, getting a rental car is a slow and cumbersome process.  There's no pre-registration and there's always 5-6 signature and imprint of the credit card, despite them having it on your reservation.

If you think taxis are going to take a hit, rental cars will be far worse.

What Uber & Lyft are bringing to the "temporary transport industry" is 21st century technology. While the taxi "sorry my credit card machine is broken" industry and the car "just one more signature here" rental industry are dealing with ancient technology, the new entrants have rethought the process; you can see on a map where you Uber is located!   

This is not an isolated phenomena, in fact, Financial industry is finding out the same thing.  I wrote about this before here.  Several businesses are challenging how things are done:  Have you tried transferring money internationally recently? if you use a Fintech the cost/process and simplicity will astound you.  Fintech are able to transfer internationally within 24 hours (some places its even less), compare that to traditional banks that can take days/weeks.  How about receivable tracking -- and financing; used to cost nearly 10% of the top and would often be full recourse when dealing with discount houses.




Comments

Popular posts from this blog

Trucker shortage? No a plan to allow driverless rigs

There are still articles on how America is running out of truckers -- and that its a huge problem, except its not a problem, if it was a problem salaries would rise to so that demand would clear. Trucking is one of those industry where the vast majority of participants are owner/operators and therefore free agents.

Salaries and cost are extremely well know, "industry" complains that there are not enough truckers, yet wages continue to fall... Therefore there are still too many truckers around, for if there was a shortage of supply prices would rise, and they don't.

What there is though is something different; there is a push to allow automatic rigs to "operate across the US", so to encourage the various authorities to allow self driving rigs you talk shortage and hope that politicians decided that "Well if people don't want to work, lets get robots to do the work" or words to that effect.

This has nothing to do with shortage of drivers, but every…

Every punter says oil prices are on the rise: Oil hits $48/bbl -- lowest since September 2016

What the hell?

How could this be, punters, advisors, investment bankers all agreed commodity prices  in general and oil prices in particular are on the rise...its a brave new era for producers and exporters -- finally the world is back and demand is going through the roof, except not so much!

What happened?  Well energy is complicated, the world operates in a balance -- 30 days of physical reserves is about all we've got (seriously) this is a just in time business.  So the long term trend always gets hit by short term variations.

Global production over the past 12 months has risen by somewhat less than 1.5% per annum.  As the world market changes production becomes less energy intensive (maybe), but the reality is that the world is growing more slowly -- America Q4 GDP growth was around 1.9% (annualized) Europe is going nowhere fast (the GDP growth in Germany is overshadowed by the lack of growth in France, Italy, Spain (lets say 27 Euro members generated a total GDP growth of 1.2…

Paying for research

This morning I was reading that CLSA -- since 2013 proudly owned by CITIC -- was shutting down its American equity research department -- 90 people will be affected!

Now the value of a lot of research is limited, that is not to say that all research is bad. In fact, I remember that GS's Asia Aerospace research was considered the bible for the sector.  Granted, there was little you could do with the research since the "buy" was for Chinese airlines...that were state owned.  Still it was a vey valuable tool in understanding the local dynamics.  It seems that the US has introduced new legislation that forces brokers to "sell" their research services!  Figures of $10,000 an hour have been mentioned...

Now, research can be sold many times; if GS has 5000/6000 clients they may sell the same research 300x or 400x (I exaggerate) but this is the key -- Those who buy the research are, I presume, prohibited from giving it away or selling it, at the same time the same rese…