The Fallacy of the Uber Business Model (Abstract)
As far as Unicorns go, Uber is the prized pony in the Valley. The model Uber helped pioneered has launched numerous copycats in other industries with each claiming to be the Uber of: dog walking, cleaning, home tasks, errands and more. But what everyone has been missing is the critical flaw of Uber’s and other sharing economy business models that have spread across the world. The flaw is that they will never be profitable.
The core of the problem is this:
- A customer base that will never convert to profitable prices.
- Inability to raise prices as a result of new lower market prices.
- Constant competition from new competitors who will limit Uber's long-term pricing power.
- Unreliable and untrained labor force.
- Mis-classification of employees as freelancers.
- Expensive regulatory issues around the globe.
- A business based on raising additional investors money.
This paper will be publish in late January 2018. You can enter your email address here to receive a .pdf copy when it is published.