News hit on Friday of a landmark court ruling here in the UK, meaning rideshare behemoth Uber will no longer be able to classify its drivers as self-employed. Instead they must be ‘employees’. One word difference, in reality this is a sign of impending upheaval.
Until now, the taxi-alternative has been able to get away without paying tax on behalf of those behind its approved wheels, but this change in definition will mean the end of that. Nevertheless, the original model represents a very new understanding of what businesses do. And one proving very, very lucrative.
Uber is the world’s biggest cab firm. Air BnB is the largest travel and accommodation provider on the planet. Amazingly, neither company owns a single vehicle, hotel or apartment. What each has to offer, though, is an international network of service providers that can offer great rates thanks to the lack of middlemen involved. Aside from the parent companies themselves.
Some, like Radio 4’s series The Digital Human, have branded this the ‘gig economy’. Other examples could be the London-based firm, TaskRabbit. Touting itself as a new way to ‘get work done’, the idea is simple. You need something doing but have no time, and someone close to you has time and needs money. Cue placing a callout online, and waiting for responses from people interested in wrapping your Christmas presents. Or hitting the supermarket. Or doing the ironing.
Again this company doesn’t actually own anything, but rather makes a viable income simply from connecting someone to someone else that has something the first person wants. Whether that’s spare hours and energy, a roof under which to sleep, or a ride home at the end of the night. What’s more, all are delivering with exceptional feedback from customers, even if they also court controversy in their respective industries (angry taxi drivers, hostile hoteliers).
What has made all this possible isn’t just identifying a gap in the market, and moving to corner it. Nor is this entirely down to improving technologies leading to better apps, websites, and booking systems. Those points may be true, but it’s also about how the entrepreneurs at the top of firms such as Air BnB have embraced that technology and looked at how it can be exploited to its full potential.
This is before we come to exceptional marketing. Take Uber’s voucher system. Everyone selling to consumers has considered offering some sort of rewards system, but what about a code that can be messaged from one phone to another that might as well say ‘We’ll drive you for free’? In terms of incentives to get a name shared it’s up there with the best. Air BnB has a similar offering, whilst TaskRabbit has basically positioned itself as a leader in a futuristic economy, courting press from BBC to Wired.
Impressive on all counts, to say the least.