Monthly Archives: February 2016

An idea for Uber

I’m an Uber fan.  And I’ve enjoyed following them from the start – from taxi hailing to private car service, surge pricing, the transition to delivery, and now to pooled rides.  I’m fascinated that a huge percentage of their fundraising goes towards legal battles.

And I’m also a customer.  As such, I talk to my drivers incessantly and ask them a lot of questions.  I sometimes take Lyft (if Uber is in surge and Lyft isn’t) but usually I use Uber.

Recently, I had a thought.  Sometimes I look at Uber and if it is in surge I take the T instead. Getting from work to home costs about $13 for UberX, $7 for UberPool, and is effectively free with a monthly T pass that’s already paid for.

I started to wonder – isn’t the market symmetric?  That is, just like putting Uber into surge is supposed to attract more drivers, wouldn’t there be an equivalent “under-surge” that would attract more passengers?

A lot has been written about whether Uber drivers really make the kind of money Uber claims they do.  It’s hard to determine whether it’s true or not.  But most of the drivers I talk to would rather have a fare than not, even if it’s a short one, or one that gives them an empty car back to the city.  It would seem to me that they wouldn’t mind fares where they just broke even, if it put more riders on the road.

The thing is, if there were an “under-surge” that enticed more riders to take Uber when there were a lot of empty cars driving around, it might create new rider habits.  If I took Uber home from work more often because I could take advantage of under-surge, perhaps I’d get used to taking Uber home and do it even when there wasn’t an under-surge.

Habits are powerful.  And the economics of Uber provide fascinating examples of all kids of market dynamics.

An untapped resource for the new on-demand economy

I love the on-demand economy.  Among my favorite apps are Favor, Uber, and Amazon Prime.  I was an early adopter of the ill-fated  And I eagerly follow the market.  There’s Washio for dry cleaning, Instacart for groceries, and even VetPronto for a veterinarian!

When Amazon started to offer “same-day shipping” I was really interested to understand how they were able to offer that.  Then came Google Express and Prime Now.

If you were to set up a new on-demand economy company, what would you want?  Perhaps a network of people who knew different neighborhoods really well; small, local warehouses for products; a fleet of transportation vessels to transport people and things around; and an incentive to succeed.

You know, like the U.S. Postal Service.

It’s amazing really, how much infrastructure the government already has that could compete with or fuel this new economy.  Let’s say you wanted to start a company that delivered freshly ground coffee beans, or fresh produce.  Wouldn’t it be convenient to have local warehouses that are uniformly distributed throughout neighborhoods?

The post office is in trouble if they don’t come up with something.  Their taking over Amazon’s Sunday deliveries indicates that they’re eager for new opportunities, but I think they should be thinking bigger.