Uber Up! – How Convenience Drives Innovation

Forget about price. Uber is an uber smart business model that creates a triple win. Here’s why:

  1. The ride is usually cheaper than a taxi (watch surge charges* during peak periods) and comes within minutes of your smartphone-app summons.
  2. Drivers work when they want and get 80 percent of the fare.
  3. The company does nearly nothing and collects the other 20 percent.

Uber and Lyft (taxi alternatives) are classic low-end disrupters, which Techcrunch.com says is when a new product provides a simpler, cheaper or more convenient alternative.

They came into marketplaces such as Richmond, Va., where taxis are not prolific and where a person made a (yawn) phone call for a ride from point A to point B. The dispatcher relayed the information and then let you know how long before you would be picked up. It could be an hour wait on weekends. Some taxis didn’t take credit cards, and tips were expected – neither of which occurs with Uber.

Uber turned the traditional taxi model upside down thanks to one big trend: convenience. People are willing to pay for concierge services. Just as yourself the following:

Uber driver Brigitte Simo gave me a lift to the airport in her 2010 Acura MDX. Brigitte is originally from Cameroon, Africa, but has lived in Richmond for nearly 20 years. She owns Tropicana Krispy Krunchy on Jahnke Road.Who wants to wait in security lines when you can apply for TSA pre-check?

Why wait in the bank line when a concierge banker will come to you?

Why waste a half hour sitting on I-95 when you can zip through Express Lanes?

How about never having to wait in line at the dryers thanks to Pressed 4 Time?

Why wait weeks for a doctor’s appointment when you can see one immediately with a concierge physician membership?

What else are you willing to pay for to go to the front of the line? If you have the answer, you may just have the next disrupter on your hands …

Sande Snead is a communications consultant with Rhudy & Co., who is thinking hard about investing some dollars in a new Uber-like service model.

*A month after first trying Uber for the first time, Sande learned the importance of understanding Uber’s 2.8x surge charge. Her first 15-mile trip to airport totaled $28, but the same trip three weeks later with the surge totaled $82.76. She later shared her disappointment about the pricey trip, and the customer-focused Uber gave her a $20 credit.