Wednesday, April 15, 2015

UberRush: Kittyhawk or Supercub? Exploring product strategies and emerging markets.

Uber is now valued at $41 Billion – that’s more than the entire taxi industry (which is shrinking year over year). Investors have given Uber $1.2 billion to continue to expand its services and workforce globally – which includes subsidizing prices in certain cities and fighting costly legal battles.

Over the years Uber has continued to cut their prices to remain competitive and grab increased market share. They are also testing a new delivery service in NYC called UberRush.

Is this a good bet? Will the markets materialize substantially enough to enable Uber to keep up their pace? Only time will tell.

I’m offering two alternate views of UberRush based on Christensen’s Discovering New and Emerging Markets excerpted from The Innovator’s Dilemma.

UberRush is a local messenger service that costs between $10-15 for small deliveries within 1-2 miles. In many ways, UberRush is both a sustaining and a disruptive technology. Uber is a large company entering a crowded market with the goal of improved performance above traditional package services and urban delivery services. Simultaneously, though, Uber is leveraging their existing technology and knowledge of urban logistics to create a delivery service that is faster, cheaper and simpler than existing services.

UberRush as Kittyhawk
Market size for courier services is significant, but is this what customers want? Given trends going on with drone deliveries and “home essentials” subscription services, other companies could potentially come up a different disruptive service that is preferable to UberRush. There is also the issue of the public’s trust for Uber employees, which has been covered frequently by the media. Businesses could potentially be very hesitant to trust this new type of service.

UberRush as Supercub
Do Uber executives have the transferrable skillsets to manage a courier delivery service? I think this type of small test will help them answer that question without exhausting resources. Perhaps, with UberRush, Uber is seizing an opportunity based on the ways many customers already use the product – taking quick trips and/or calling an Uber when they need to drop something off locally.

Whether UberRush goes the way of Kittyhawk or Supercub ultimately depends on how much Uber tests, invests, and learns from customer usage.

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