A highly controversial phenomenon in the entrepreneurial world, Uberization affects many startups by revolutionizing a market model. Seen as a natural trend of innovation and competition by some, or as massive job destruction by others, this Uberization of the digital sector now encompasses numerous professional activities. So, which companies are affected by this trend, and how does it play a significant role in the economy?
A disruptive initiative by Uber
Originating from across the Atlantic with the company Uber in the taxi sector, Uberization involves dominating competitors in a market by bringing disruption to a well-defined niche. Massive use of mobile means, cost reduction, and new communication and marketing methods—companies like Uber are now numerous in the startup and digital market. From Airbnb in the peer-to-peer real estate rental sector, Booking.com in hospitality, to BlaBlaCar in carpooling, Uberization now affects large parts of the digital economy. By revolutionizing practices and capturing considerable market share to eventually dominate competition, these companies nevertheless provoke controversy by imposing disruptive innovation. Uber, for example, reportedly earned over $10 billion in profits in 2015 alone, much to the detriment of taxi drivers.
Competition driving down prices
Free was one of the pioneers of this new consumption model by introducing slashed prices with an all-in-one offer that revolutionized the Internet service provider market. Faced with this phenomenon, consumers enjoyed lower prices, and the competition among major operators greatly benefited subscribers. According to a study by Publicis, 83% of French people support the Uberization of the digital economy when it is associated with more competitive offers, and 2 out of 3 consider it “a good thing” for the economy. However, when they are the main concerned workers by companies like Uber, they are only 52% in favor and even 61% opposed for the over-50 age group. Uber has given rise to various players in the transportation market, such as VTC Cab or Le.Taxi, launched on the initiative of public authorities.
Similarly, OuiHop is an application that allows drivers to transport passengers for free while benefiting from contributions through discounts on parking fees or fuel. Towards dematerialization of services As Uberization now affects numerous sectors including transportation, hospitality, banking, and distribution, major market players are forced to adapt to this mass phenomenon. All banks have their own online platforms and offer fully dematerialized banking and financial products. Online banking thus benefits consumers who enjoy much lower management fees. E-LCL, BforBank, ING Direct, Hellobank, and many others are attracting more and more customers by offering attractive offers when opening a bank account. Uber for Business, the latest service from the iconic startup, even offers professionals a specialized payment method for billing employees on a per-trip basis. By offering innovative digital products and services to consumers, this Uberization now seems to be the norm. However, some national legislations seem to hinder the development of companies that model their business on Uber.
