Uber is launching a public offering and each share will be worth about $47.00 a share. So that means the company will be worth truckloads above $75 billion US dollars. The company expects to lose money for years as it tries to dominate the market while investing in food delivery, electric bikes, freight and driverless cars (autonomous vehicles).
The model is simple.
They own the market, other people do the work and hand back a percentage for having their access to the market, dished out client by client. Sort of a happy arrangement where Uber don’t have to own anything like a fleet (at the moment – the driverless thing may be a different story) and someone driving doesn’t need to work out how to get a client.
Two autonomous businesses.
Until someone is not happy, in this case the drivers. They may be unhappy for a lot of reasons and all those reasons deal with money and what they get. So, the model does rely on the drivers behaving themselves – which generally happens and being happy with what they get, Interestingly the value of the Uber Share can also be affected by how much the drivers will take.
What happens in the market when drivers don’t play along, other players chisel at the market and regulations can start dampening competition.
I like this business model, as it teaches us that owning the market is everything, owning the truck or the car is existence.
Car divers with Uber get above the minimum wage (sort off) truck drivers on contract get something like that after they have nursed their truck along and courier drivers, well…….
You should always be looking for your own market.
I have a mate who drives Uber. He has a well-presented car and hands out business cards as he goes, so he has been building up a range of private customers, and these are generally the bigger ticket to the airport trips where he may still charge the Uber rate, but keeps all the funds.
The same for whatever your business, you should consider that you always need your own clients. You may be a chippie on contract with a builder, but great if you have a number of private clients who will pay a higher hourly rate, if you are transporting deliveries for a number of clients a card might get you some valuable weekend work.
Owning your own market is valuable – ask Uber.
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