What made Facebook a success—will make Uber, a 1-sided marketplace—a success
Most Uber drivers have no choice but to drive an Uber
1-sided marketplaces are not marketplaces. How Uber is draining more energy than it is giving back to the world and why there is no fix for this
1 historical precedence in favour of Uber—Cotton farmers
The super app is a step towards media selling—if there’s 1 person who can pull this off and combine Uber with QVC and Google Maps, it is Barry Diller—he’s up there with Steve Jobs
the only way I see Uber saving itself is doing these 9 things—in the order
—plus there’s no harm in coming up with a city based digital currency anyway
Disclaimer: If you are easily swayed by opinions of others, do not read this—especially If you have a stake steak in Uber.
What made Facebook a success—will make Uber, a 1-sided marketplace—a success
Let us begin with what makes Facebook a success—the gold standard of dopamine monetisation—we’ll use it to measure Uber. The reason people are addicted to facebook is the dope—facebook has been cultivating in your brain since 2004, a little over 18 years by showing you only the things which will make you want to come back for more, again and again and again.
Facebook is the best at this—though YouTube is surely coming close. For facebook this is a matter of life, If your product must survive, every bit of your product must exist to give more energy to the consumer, creating a net positive energy. Facebook has spent billions of dollars to perfect this—they’ve got machines which can predict with an astounding level of accuracy if a user will buy a product off facebook ads within the next few days—which is a good thing, people should buy more things—it is good for the economy.
Most Uber drivers have no choice but to drive an Uber
Most Uber drivers have no choice but to drive an Uber. Uber has done a good job of making this cohort of human beings into ‘dopamine zombies’ by monetising the promise of finding interesting members of opposite sex under the pretext of making a living—this is not a way to make a living because this takes more energy than it gives back. Facebook does in a cleaner way—takes less energy of both sides of the marketplace. If your product does not give back more energy to the consumer than it takes from them—you do not have a product.
Moreover, Uber drivers are at a point in life where they are probably the unhappiest. How can you expect Uber riders to feel good riding with them? How can unhappy drivers create a net positive outcome for the consumer—a rich experience which will make the consumer keep coming back for more—like facebook makes you keep coming back for more, again and again and again.
While Uber has successfully created a dopamine response for drivers, it is simply not enough—I know this first hand—I’ve driven Uber, the ring tone of incoming ride is thrilling, exciting and it feels amazing to hear it—I’m sure if I heard it right now, I’d want to reinstall the app under the pretext of finding an interesting member of the opposite sex on my way back home—BUT—I’ve learnt not do it, I know the odds of this happening is 1 in a 100—Uber will rob me of my energy, create decision fatigue and ruin my next day—not a good thing. As you can see, Uber is abusing the dopamine response on the supply side and is incapable, be design, of replicating the same for the consumer. This, ladies and gentleman is the definition of a 1-sided marketplace. 1-sided marketplaces do not exist, for long.
1-sided marketplaces are not marketplaces. How Uber is draining more energy than it is giving back to the world and why there is no fix for this
Uber can not subsidise supply & demand forever giving the impression of being a marketplace, it will remain only that, a mere impression.
The ROI on riding with people who have their own problems is truly pedestrian—this takes a toll on your emotional and physical well being. Giving away the most precious thing you have—your energy to an unprofitable enterprise is a bad business. Uber is betting on people who have no other choice but to pursue this enterprise—a strategy nonetheless—a good one, nein.
The idea people with surplus supply of cars, energy and time will to do this forever is flawed— like the idea of doing an unpaid internship all your life is flawed—people who have a surplus supply of cars have choice, and driving an Uber because someone on the other side of the block wants a ride to God-knows-where puts these happy drivers squarely out of the supply pool—because these people value their energy.
Uber can always choose to bet on consistently high unemployment rates in order to steady the supply of willing volunteers drivers, this is not a good bet, in ways more than 1.
Self driving cars have been coming tomorrow for the last 5 years now, even if they come—the idea of riding without a human connection is an affront to me—it has no historical precedence—it will never happen.
1 historical precedence in favour of Uber—Cotton farmers
Cotton farmer life expectancy is on decline—whereas every other node of the cotton value chain has increased their profits. This proves that there will always be a cohort of people to drive Uber because they think they have no other choice.
However, there is 1 problem with this argument. Cotton farmers live in rural areas and have little choice of finding a better enterprise—Uber drivers live in cities and have more opportunity. As millennials gain awareness, flexible work & disposable income—Uber will have a growing quantitative supply problem—adding to the unfixable qualitative woes.
The super app is a step towards media selling—if there’s 1 person who can pull this off and combine Uber with QVC with Google Maps, it is Barry Diller—he’s up there with Steve Jobs
Imagine for a moment—Uber is a super app for each city—an app which is Google Maps, Airbnb, TripAdvisor and many other things—this app sells ads like Google Maps.
Media selling for Uber is becoming a self fulfilling prophecy—Dara Khosrowshahi is a protege of Barry Diller’s.
Barry Diller is man of rare disposition. He understands what the customers want without having to ask them and if there is 1 person who can pull off combining Uber with QVC and Google Maps, it will be him—and he’s up for it as well—he only has to start his career all over again.
the only way I see Uber saving itself is doing these 9 things—in the order
—Cut all costs by 80%—sans remorse.
—Pivot to classifieds for on demand, local service providers, go hyperlocal yesterday.
—The usp is quick payment for the suppliers and for buyers getting service on the push of a button—with a percentage of commission which service providers will consider insignificant—they can run paid ads on the platform.
—Internalise the fact this business model does not exist, first to themselves, then to the employees and then to the investors.
—Spend $100 million dollars and create an educational content machine in the next 5 years shamelessly copy Shopify compass(see what I did there?) and let the local entrepreneurs create value at the neighbourhood level—something they would actually like to pass on to their children
—Become the nextdoor of service hailing
—And finally the most liberating thing yet, leave ride hailing as an afterthought—leave it—it doesn’t work—it’s not a business—imagine what a relief this will be for so many people.
If this hyperlocal, service-hailing-super-app manages to become a way for people to express neighbourhood pride—it will become the app the world really needs—an app which governments will inevitably want to white label and own.
—plus there’s no harm in coming up with a city based digital currency anyway
Spare a thought for these people, the senior execs at Uber and similar enterprises who have their identities tied to the ride hailing business. Even if these people wanted to move on and do something worthwhile, they will need all the support they can get. If you know someone like this, share this with them.
It seems like Barry Diller is up for it
the next big thing on the consumer internet is map based app like snapchat, live commerce, it is simply the moving of QVC to Google Maps—this QVC on Google Maps will be the next big thing on the internet
Usman Gondal 
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