Ride Uber: Save the Planet

Most recent stories surrounding the dramatic expansion of Uber have been tinged with negativity or solely focused on their long term potential as an investment.  Until recently, I didn't pay much attention other than to marvel at the simplicity and smarts of the technology and business model.  Recent experiences however have forced me to start thinking about Uber (and other models like it) as platforms that have the potential to dramatically reshape the world. Sorry if the last sentence seems overly bold, but walk with me a bit through this exercise.  

Today, around the world in congested urban centers, public transportation of all shapes and sizes overwhelmingly dots the roadways.  In many cases these legacy industries are characterized by owner groups of massive fleets of old, emission belching cars, couriers and buses.  The service in most markets is routinely poor and dangerous-  dangerous drivers, dangerous vehicles that turn the cities gray and layered with soot on a daily basis.  

 The smog surrounding virtually every major city in the developing world has utterly obliterated any chance at glimpsing blue skies more than a few precious moments a year.  Enter Uber.

In their global rollout so far,  Uber has planted a stake in the ground that challenges the status quo in several very meaningful ways.  Firstly, in all the developing markets that I've become familiar with, Uber is filling the roads with late model compacts.  Instead of drivers using their own vehicles, in these countries Uber connects drivers to a lease of a new vehicle.  These cars abide by the most stringent and up to date emissions and safety standards.  

Additionally, from what I've learned, Uber drivers in these markets are making significantly more money working under the Uber private contractor model than they were able to make before driving private cars for a fleet owner.  They sign up to drive a safer, better automobile and for higher pay.   And they work on their own terms.  And (for now) the consumer is paying less with Uber to get where they need to go!!!  Win, win, win right? 

There is no cronyism (yet), no collusion between competing owners about specific zones or rate fixing and ultimately the public benefits from a dramatically improved product when it comes to getting a ride around town.  And as competitors enter the market with a similar business model, that competition will only serve to improve the overall experience. 

In time, Uber is poised to launch additional services in the food and package delivery space and in the ride sharing space.  These have already launched in test markets and I would imagine have tremendous potential in the congested cities around the world where they have launched their Uber taxi service.  

When these models take off, an even more dramatic benefit will be felt as fewer and fewer 'combis' (private mini vans transporting multiple passengers), old buses, dangerous scooters and more are replaced hopefully by new model vehicles and a business opportunity that redistributes income earning power directly to the operators.  

As I alluded to earlier, competition will really be key to the sustaining beneficial impact of Uber as it will force the industry to continually offer more compelling reasons to choose one service over another.  It will also ensure that the customers continue to get good prices.   As long as costs can be maintained, I can envision a future whereby one competitor boasts their zero emissions fleet as compared to their rival as a means to maintain a loyal customer base.

Governments around the world continue to wage legal battles against the technology platform company.   The basis for their claims vary widely and typically are decorated in claims of safety concerns.   Dig a little deeper and I am sure you would find that the source of their outrage is almost exclusively inspired by the small community of legacy transportation company owners who are threatened.  

This type of government action is nothing new, money spent to encourage lack of innovation versus its opposite.  It would make much more sense for both the governments and these legacy companies to dedicate their time, finances and energy towards innovation and figuring out how to compete instead of shutting out a phenomena that can have vibrant, sustaining benefits around the world.   That won't happen unless the consumer pressure overwhelms them.  (And by the way, pressure from the companies leasing the new fleets of vehicles!!)  So, if you haven't already, I would definitely say to start using Uber more..........and save the planet!!