Uber Air: A Strategy Mismatch
After ground transportation, Uber is now making strides to take over the sky. But Uber’s strategy with Air fundamentally differs from its ride-sharing service.
“Early-stage startups are a lot like pirates. They both lack formal processes, and are willing to question and even break rules to “steal” from incumbents (market share and booty respectively). This adaptability is critical in the early stages of building a great company.” - Reid Hoffman, Partner at Greylock
Uber was one of the pirates of Silicon Valley. The ride-hailing company was willing to take risks that the taxi business can’t and won’t. Under the leadership of Travis Kalanick, Uber moved fast and broke rules.
The company was also involved in many high-profile lawsuits. It evaded law enforcement and got into serious trouble with governments around the world. There were reports of unethical behaviour, sexual harassment, anti-competitive behaviour and intellectual property theft.
Then in 2017, Travis Kalanick resigned and Dara Khosrowshahi came in. As Reid Hoffman likes to say, Uber transitioned from a “Pirate” to “Navy”.
UberAir
Uber envisions an electric VTOL (vertical take-off and landing vehicle), similar to a helicopter, carrying four-passengers at a low altitude between skyports in each metro area.
UberAir began with the realization that Uber is not just about cars, it’s about urban mobility. It has evolved into a transportation network that helps you get from point A to point B by car, bike, scooter, public transit - and, in the not-so-distant future, flights.
Their goal is to begin demonstrator flights this year and make limited commercial flights available to riders in 2023. The first cities to experience Uber’s air taxi service will be Dallas, Los Angeles and Melbourne.
So what’s different about UberAir?
Uber is not only collaborating with vehicle manufacturers but also regulators. That’s not the Uber we know of. To understand the gravitas of this collaboration, type these two words in your Google search bar - ‘Uber Regulators’ and look at the top five results.
In the last one, Harvard Business Review is even suggesting for regulators to shut Uber down. That’s how sour their relationship is. Now, let’s look at UberAir’s whitepaper.
“Uber will be reaching out to cities, vehicle manufacturers, prospective representative users, and community groups along with key business, infrastructural and regulatory stakeholders to listen, learn, and explore the implications of this urban air transportation movement. In the coming weeks and months, we plan to delve into the political, policy, infrastructural, and socio-economic issues that will need to be addressed.
We are additionally looking forward to convening a global Elevate Summit to bring together a wide set of vehicle manufacturers, regulatory bodies and public and private sector city stakeholders. We will do so with the intent of exploring the issues and solutions that are raised during our outreach and to surface joint, shared perspectives as well as solutions that can help to accelerate urban air transportation becoming a reality. ” - Uber Elevate
Why is the strategy different?
There are two reasons.
First, Uber is no more a startup (especially not a pirate anymore). It’s now run by Dara, who successfully grew a dying Expedia into a profitable $20 billion giant. Expedia is now known as one of the best-managed companies in its industry. He would not put hundreds of air taxis in the sky, mess with Air Traffic Control and then figure out what to do next.
Second, urban air transportation has no incumbent. There is no existing infrastructure for air taxis that Uber can disrupt. Instead, if Uber wants to be part of air mobility, the company has to participate in building the infrastructure from the ground up. Also, being involved in these conversations with regulators early-on will give Uber the leverage to influence the future regulations of urban air mobility.
Uber's ride-sharing service might have benefitted by not working with regulators, but the aerial ride-sharing service has no other option.
What Uber is doing right is being the centre of attention. By hosting annual summits and bringing industries together, Uber has become that cool high school kid who hosts all the parties.
Well, everybody likes that guy.
Aerospace Executive
5 年Fundamental difference between the Uber Car and Uber Air is that they taped into existing privately owned property of people : cars. With air mobility we don't have a single vehicle thay is 'legal' to operate in regulated airspace. It is a dream if they think they will do it the same way as with car taxi service. Basically we first have to build a fleet of vehicles and unfortunately this time it will not be owned by people but it will be more or less operated by businesses similar to airlines. Unfortunately aerospace can't be a pirate bay and Uber has to change tactics in order to succeed here.
Building the Future of Personal Space Icon - Aerospace Engineering and Project Management
5 年Was much easy to take over the rods, having cars and drivers available. Not as easy as they think for taking over the sky, but everithing is open for a future change. No vehicle already manufactured, No software available and No legislation alowing this for the moment. Good to reve funding for start doing these jobs. A lot of work for the future. Even if vehicles will be available, will be up to the Aerospace Organizations Legislators to see how much they will be willing to open the sky.
Founder Avfoil
5 年It’s good to see these points raised. One thing that struck me about some of the culture in e-commerce disruptive companies was the lack of building or stable fort creation, their seemed to be mostly mass attack with very little in the way of long term planning. Eventually they needed to regulate and pay the piper on real customer support to become long term or survive. But this was counter to the model so did it just fail if your regulate or create hard structures and expensive infrastructure? Most you asked in the industry said yes. I think that the move to transition is the right path for a company like Uber, like perhaps bit coin the only long term success is some form of safety and regulations created from with in the company and not thrust upon it. Using Uber in Mexico you could quickly see major issues with lack of care of client and control of worker, serval safety issues were obvious and the company was making no effort to solve them where it was with in their power to do so. That wouldn’t last long before people stopped using them, Now with change of leadership we see some very small effort to change that problem. There may not be an incumbent in the air but the ground transport is playing that role