Growth

Uber and Peer2Peer: Rocking the boat or creating opportunities?

Jeff Haden
Business Journalist

Jeff Haden is a bestselling ghostwriter, speaker, Inc. Magazine contributing editor, and LinkedIn Influencer

Jeff Haden
Business Journalist

Jeff Haden is a bestselling ghostwriter, speaker, Inc. Magazine contributing editor, and LinkedIn Influencer

The P2P revolution has rocked a number of markets, but few more than Uber have rocked commuting. What can SMBs learn from the operator?

Once upon a time market threats were few for taxi companies. Sure, they competed with each other, but that was business as usual. The taxi industry and business model, is long-standing and well-established.  Traditionally, the focus has been on efficiently managing and deploying vehicles and drivers – and this is where much of the innovation in the industry has occurred.

And then came Uber, a peer-to-peer (P2P) transportation company that uses mobile apps to receive ride requests and send those requests to drivers who use their own vehicles. And suddenly traditional taxi companies have begun to encounter competition from Uber drivers.

New technologies – and P2P business models – make it possible to segment traditional functions into discrete tasks that can be assigned to workers when needed at what can often be significantly lower costs. The result is a rise in an on-demand economy that makes it possible for workers to not only hyper-specialize but also to hold a number of “jobs”.  The result is also a rise in opportunity for small businesses that choose to facilitate the on-demand economy. Or at the very least take advantage of hyper-specialisation to serve new markets and new customers.

Take Uber. They realised that in order to provide the core service – a ride from one location to another – all that is necessary is a vehicle, a driver, and a means of dispatch. So instead of buying a fleet of cars, they created a system to make it easy for people who owned a car to earn income – either full-time or part-time – by providing rides.

You can take the same approach. Take a close look at your industry – and more importantly at your competition – to see where opportunities are.

man wearing suit next to black car

Customers value specialisation

Many service providers tout "one stop shopping" capabilities, but many customers prefer a la carte purchasing so they only pay for what they need. Cross-selling creates cost efficiencies and synergies that often benefit the business, not the customer.

The fact you provide in-home water treatment systems and comprehensive bathroom design services is irrelevant when a customer just needs a plumber to fix a leak.

Seeing commoditisation as an opportunity

Process control and automation have turned many skilled professions into commodities.

Services like web design, accounting, legal services and medicine are all encountering commoditisation to varying degrees. Not because those professionals aren't highly skilled, but because customers can often receive similar levels of quality and service from a variety of sources. Are some service providers better than others? Absolutely - but to many customers, "good" is sufficient for their needs.

Use the trend towards commoditisation to your advantage. In some cases, instead of trying to be the “best” solution in an overall sense, it might be enough to just be the best solution for specific needs. For work outside your specialisation, some of this might be suited to outsourcing to the growing numbers of highly-skilled people eager to work on-demand (Then you and the freelancer both win – and so do your customers).

Customer perception of quality differs

Until the arrival of services like Uber, it might have been reasonable to assume that consumers would only be willing to ride in traditional taxis. The market has shown that this is not the case –customers are willing to try something new to provided that concerns like safety, reliability and price are met.

Quality is always in the eye of the customer. And in a world full of emerging disruptive players like Uber, it’s time to step outside business as usual, think about what customers truly value, then find creative ways to provide that to customers.

If you don’t innovate and disrupt, chances are someone else will. And in this day and age, it will probably be sooner rather than later.

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