Thursday, April 21, 2016

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.




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