The Business Model "Uberization": an essential step in the digital transformation

OUR ANALYSIS





  • Principles:


Uberization is a business model allowing professionals to get in touch with customers through a digital platform. Thanks to the latter, the company eliminates the intermediaries between professionals and clients. We are talking about service providers and not employees, because, according to the Uber model, the drivers are not employees but are self-employed, using the platform. The technological means enabling uberization are the generalization of broadband, mobile internet, smartphones and geolocation.


  • Advantages & Challenges: Such a business model has many advantages, both for the consumer and for the company. The essence of uberization is in itself cost-reducing, thanks to the status of its providers and the fact that the company does not pay for expensive infrastructure. Through the network effect that a system like this creates, each new user enables the company to grow exponentially. For the consumer, the arrival of such disruption on the market leads to a reduction in the price of the service.

The challenges are the following. The platform and how the business model works can be very costly for the company. Moreover, margins are not necessarily high. The fact that providers are not recognized as employees can raise ethical questions and is questioned in some countries.


  • Evolution & Maturity : The business model was invented with the arrival of Uber on the market. A pioneer in the use of service providers rather than employees, combined with the digital aspect of the platform, Uber was the only known company to use this system.

When Uber became a reference, a giant, the business model was democratized. Indeed, other markets were transformed by uberization. This system has been implemented in most of the markets that link customers and professionals in a certain sector.

Take the example of home maintenance. Individuals often need plumbers, electricians, etc. Hello Casa is a digital platform, based on the Uber model, which connects professionals in this sector with customers, in return for a commission.


  • Key figures: Uber is today valued at more than 95 billion dollars. The individual transport with a driver sector is worth 100 billion euros, almost the equivalent of Uber’s valuation.


  • Products & Services: The value of the platform depends on the network effect. That is to say, the more users there are, the larger and more efficient the platform becomes.

The satisfaction of the service providers is also important. This means that the commission made by each driver (or other service providers in other markets) must be large enough to motivate them to continue. If too low a price is offered to customers, and therefore a low reward for the providers, the platform loses value.

The customer journey is essentially linked to the choice of platform. When there are several competitors with the same business model in the same market, the customer journey is limited to a choice.


On IntelligenceMaker, our competitive intelligence platform, get deeper informations about this business model and learn about inspiring players that already deployed it :




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