Thinking Economic Transformation, by Mitch Ratcliffe
Author: Mitch Ratcliffe
Mitch Ratcliffe is a veteran entrepreneur, journalist and business model hacker. He operates this site, which is a collection of the blogs he's published over the years, as well as an archive of his professional publishing record. As always, this is a work in progress. Such is life.
Authenticity sells, based on the quote below from incoming Uber CMO Rebecca Messina, who comes from Coca-Cola and, most recently, distillers Beam-Suntory. Dara Khosrowshahi, the CEO who has expanded Uber’s commitment to drivers and rider safety, is the face of the brand, if you follow this logic.
Uber is doing “the right thing” in terms of marketing, said Ms. Messina. “Dara is getting out there right in front, he is humble, he is full of integrity and he means what he says,” she added. “That is what consumers need to hear before any other messages from us.”
But Uber’s marketing challenges are three-fold, and Messina ticks two of the boxes:
1.) Drivers need to know that Uber is dedicated to maximizing their success.
2.) Riders need to know their experience will be safe, pleasant, and affordable.
3.) Investors need to believe Uber’s stratospheric valuation is legitimate before an IPO can be floated in 2019.
Messina does not have the background for investor relations, nor does she need to have it if the company can bring in the right bankers and investor relations people. It is interesting, at least to me, that Messina’s recent experience selling liquor is a strong entry to the late-night Uber-as-alternative-to-driving-under-the-influence. Safety and reliability will certainly be the centerpieces of Uber’s consumer message.
Rydoo announces a tool for tracking business expenses for Uber for Business rides. This kind of integration of business services, as well as consumer capabilities to help them get the most for their transportation dollar, represents the next stage of the maturing mobility market. It’s hard to imagine this being a stand-alone business when Concur, Intuit, and myriad others are already aggregating expense data across many categories. But many fortunes have been made on the path to acquisition.
Receipts generated from Uber for Business are automatically integrated into the Rydoo app, the company explained. Business travelers can then send that data to their managers from within the mobile platform.
Lots of useful data in this breakdown of the food delivery market, including visualizations of service areas.
It is notable that the services are tipped toward higher earners, which suggests that McDonald’s is not the meal of the future. A greater variety of healthy foods will be available to the home in the coming decade.
Why hasn’t a curated healthy meals service appeared?
Amazon ordered more Mercedes delivery vans for entrepreneurs who signed up to start businesses moving the retailers’ packages. Currently, with 10,000 applicants, we can guesstimate that the typical entreprenuerial delivery operator will operate an average of two vans.
Assuming one of the drivers at each startup is an owner at first, the program will create 10,000 delivery jobs in addition to 10,000 new companies.
I wonder if, like Henry Ford’s factory workers, these drivers will be able to afford the service they deliver. That’s the threshold for a fair economy to flower on the back of gig work.
Anything can be delivered on-demand, even if you can’t pick up and move that thing. Take the parking spot, as a $10M example. SpotHero announced an additional Series C investment this week, bringing its total raised to $67.6M.
On Wednesday, SpotHero filed paperwork with the SEC revealing it has raised approximately $10 million in a new round of funding.
The local on-demand model is simply a different approach to coordinating bringing resources and users together. In SpotHero’s case, they arrange parking places for people who can use the location for as little as three hours or hire it for a month at a time. The company has partnered with mapping providers, such as Waze, to integrate parking services into trip management, for which it takes 15 percent of the space fee.
Customers benefit because SpotHero increases the efficiency of parking lot businesses, allowing them to offer discounts to SpotHero users.
Here’s the thing, SpotHero has parked about 20 million cars to date. Another way to put it is: SpotHero has raised $3.35 per car parked. The question is whether parking lots will continue to provide low-cost access to the company’s customers as the firm’s value rises. Greed on parking lot owner’s part could choke the golden goose.
The on-demand gig workstyle is approaching normality.
Legislation introduced by Senators Mark Warren (D – Va.) and Mike Rounds (D – S.D.) would expand the sources of income that can be considered when granting a mortgage. The Self-Employed Mortgage Access Act would allow people with irregular income — wide monthly variation in income — to count both their regular job and side gig as income.
Then, this interesting note at the bottom of the article. Fannie Mae and Freddie Mac, the private sources of many mortgages, are working on self- and gig-employed mortgage offerings:
Meanwhile, the two largest sources of mortgage money in the country, investors Fannie Mae and Freddie Mac, are actively exploring ways to more fairly underwrite self-employed and gig-economy applicants. A Freddie Mac official told me the focus is on automated solutions that would be able to document the incomes typical for self-employed and gig-economy workers.
Comprehensive lending and social safety net reform in response to changing work patterns is becoming a reasonable expectation within the next three to five years.
Justin Winston, CEO of Fleet-on-Demand explains the changing mobility equation: Ease of use is essential to thinking about how to use on-demand solutions in a local or national market. If you are providing transportation, the full consumer motion, from finding and booking the vehicle to getting to the destination and paying the driver (or, sans driver, paying the car). Consequently, service designers need to think comprehensively about functionality, integrating complementary capabilities, such as “Send my location” to provide in-drive information to customers and their social circle.
Transport can be viewed as a vehicle, a driver, a billing period and method of payment, all used on demand.It can be configured to the individual’s requirements and using a general mobility allowance, can include cars on demand, as well as car clubs, taxis and public transport when needed. This mobility blend can be tailored to the individual and all cost of ownership is removed.
Rob Taylor, CEO of Convey, explores the entrepreneurial potential of Amazon’s Delivery Service Partners program. He envisions Amazon owning the customer experience, which is more easily said than done. Delivery drivers may be called on to answer questions, respond to order status issues, and myriad other customer-initiated engagements because they wear ann Amazon logo.
While entrepreneur risk is high, there’s no question that this move will help Amazon fill in the gaps in its own transportation capacity. The company will now own the customer experience, increasing the threat to other carriers and shippers while pushing the majority of the risk downstream.
A “What’s Next” approach to delivery-related content and customer experience will give Amazon access to the customer experience, but without ongoing development of the business processes for delivery, the branded Amazon delivery may feel disconnected from the Amazon infrastructure.
Noted today, the attractive places to gig. Care.com ranks highest, perhaps because it requires the most skill and cannot be reduced to the cheapest price for caring for an elder? “Yeah, I want care for my Dad, but only the cheapest care,” is not a phrase you hear a lot.
THESE ARE THE TOP 10 GIG EMPLOYERS TO FREELANCE FOR IN 2018: