The real peril to Uber isn't bad PR. It's what the costs of recruiting drivers, both in terms of money and a blemished brand, says about Uber's business model compared to those of traditional software companies. More drivers don't equal more value added. They simply equal staying alive.
|Scooped by BeerBergman|
Is Uber's model sustainable enough to endure? Not sure. Excerpts. And don't forget to read the comments on this article :-).
"But the real peril to Uber isn’t bad PR. It’s the costs of recruiting drivers and what that says about Uber’s business model compared to those of traditional software companies. More drivers don’t equal more value added. They simply equal staying alive.
"In the brief history of online businesses, competitive advantage typically has been gained by virtualizing away the costs of the physical, or lost by failing to shed that real-world weight. Amazon used the web to eliminate the overhead of brick-and-mortar retail stores. Newspapers were weighed down by the costs of paper and ink. But Uber isn’t really using tech to make something that was once physical virtual. It’s simply taking an existing service—hailing and dispatching rides—and making it better by leveraging mobile tech to make it more efficient. The need for a physical operation on the ground doesn’t shrink."