The business environment is slowly shifting, those that dared to come up with something new, something that never existed on the market before, something that is considered to be disruptive because it triggers massive changes, seem to be able to win the big prize. Because we are talking about “Uberization”, let us see where it all started. You probably heard about Uber, the company that completely changed the way people get transportation around a city. The company’s idea became so popular that very many people stopped using regular transportation means, such as a taxi. Why did this happen? Well, Uber managed to come up with a solution to a very important issue in the transportation business. It provides available transport whenever and wherever a client needs it, through the simple utilization of a mobile app. While a taxi company may have a limited number of vehicles, therefore having difficulties in meeting the demand especially during peak hours, Uber does not have this problem due to its large network of available drivers. Availability was the crucial aspect that was solved by this innovative company.
Still, what is Uber? What was the thing that brought innovation in this particular business niche? You see, Uber did not create a new product. It did not call a taxi company proposing a new app they could use in collaboration. No, Uber completely changed the business models used until that point. While it is true that clients still pay for the service, from start to end, this part being the same like in any other case when transportation is involved, in some cases Uber clients being even willing to pay bigger amounts that usual to make sure that they will have a car booked during peak hours, something else changed. The experience of the client was the one that suffered the most significant change. Uber came up with business innovation that made getting a ride something extremely easy, available, and accessible. While the process is rather complex, involving geo-location through a person’s mobile phone, mobile payment solutions, driver management, booking, distribution, and other, all of these were made to fit one single and simple app that anyone can use with ease. Thus, with just a few swipes over the screen of your smartphone, you can get a ride whenever you desire, hustle and headache-free.
It appears that sharing economy was the answer to models of consumption and distribution that no longer meet the changing demands of the market. Clients are tired of paying intermediaries to get what they need. So, when the occasion arose for them to get the needed product or service straight from the provider, with no intermediaries in between, enjoying availability around the clock, consumers did not hesitate to pay the price for it. If we are to look at Uberization definition, we could contour a definition that includes a brand new business model, the use of top-notch technology, and lack of intermediaries. It means to know very well your customer niche so that you notice their needs and requirements, what are they wishing to get in the near future, and not be afraid to think outside the box in order to come up with an innovating solution. What Uberization mean is to be able to anticipate a disruption before it actually becomes disruptive and your business falls one step behind of competition. We need to take a look at what Uber brought to the current market, how customer experience changed, and learn from it.
The Uber business model involves others besides innovation and making changes in the used technology in order to make sure that distribution and consumption take place according to the latest standards. It also involves transparency. Both the client and driver are able to see the entire process on their side. The client is able to see the route and track it and find out the ETA or estimated time of arrival. In his turn, the driver will be able to see the rating him or her receives through the app, based on the provided services. Also, let us not forget that the driver can also provide feedback concerning the client, encouraging both sides to adopt an ideal behavior for the sake of future collaborations through Uber. Another advantage of the business model adopted by Uber is that the drivers are not full-time employees, like in the case of a taxi company. They are their own bosses and the only ones entitled to create a working schedule. Thus, the driver enjoys great flexibility, choosing when to work and how much time and effort he is willing to invest in this activity. Of course, the earnings are proportional with the amount of time spent working, so it really depends on each person’s personal goals and preferences.
The online marketplace also plays a very important role in this world that is already managed in such a great degree by technology. If your business is not part of it, being a noticeable presence, it would be like it never existed. As business owners, we need to embrace the fact that almost everything takes place online first. People use their mobile devices to search for products and services they might be interested in, so you need to be there to make an adequate offer if you want your business to success. Concerning the way you can best do that, you have a wide range of tools and strategies that will help you leverage technology and the online environment in the favor of your business. Getting back to Uberization, let us see just how far it can go and how it can shift the present economy. Well, since a new word derived from the Uber business model, it is easy to tell that this new wave is not about to stop now. An Uber-style disruption is expected to change the entire market and economy, stimulated by the revolutionary ideas that propelled Uber from a start-up to a worldwide network and brand in a blink of an eye.
We may soon witness the Uberization of freight, where intermediaries disappear, allowing the end consumer to contact the main provider in order to get the desired products. This is already happening if we think about it, as the Internet and technology raised the boundaries of trading, customers being able to purchase products from around the world, straight from the manufacturers and even custom-made according to their specific requirements. Will it be possible to see the Uberization of healthcare? Well, we are not that far from it either, as healthcare services become more and more available anytime people need them and wherever they may be, without the need to leave home late at night and skip work and face infernal traffic in order to reach a doctor’s office. The Uberization of the workforce is another aspect that is becoming increasingly prominent on the market. A higher number of companies realized that it is more cost and time-efficient to outsource, hiring freelancers or collaborating with various companies and agencies around the world, based on specific projects, paying only for the work they need to get done. Practically, a company can hire the talent it needs, when it needs it, for the particular task it needs, and within a budget that is considered appropriate. It is much better than having a full-time employee for such cases.
How about the Uberization of payments? It appears that in-app payments, which mean that you pay for the desired services and products with the help of an app, are much more secure than card-present payments, because it is much more difficult to fraud such a transaction. Mobile wallets and mobile apps that allow making payments are on the rise, some of the most known companies around the world already launching such options for their clients. The truth is that it is much more convenient to pay this way rather than to carry cash or a card on you, risking becoming the victim of a pocket picker or card fraud. What if you could take care of your bank-related issues by simply using your smartphone? The Uberization of banking will cover this aspect, in a near future that will become much more focused on customer needs, utilizing technology to reach clients and answer their requests. No one wishes to be called by a bank representative anymore, to find out about the latest banking services, or sit in offices to hear someone blabbering about financial services. These are two of the scenarios that just don’t fit in today’s reality anymore and will make banks loose clients if they don’t change their tactics. Understanding that change is a positive aspect and looking closely at the present trends, will make you see that a new direction is slowly shaping in modern economy. Banks will have to be able to deliver solutions and financial services at the mere touch of a smartphone, whenever the client will request them. Many banks are becoming aware of this and are exploiting this new trend, slowly moving from the traditional bank image to a bank that is more equipped to meet the future.
We do not want to lie you, once the Uberization bursts into the society, we have to think that all the technical advantages that you get, have to pay in another way. The are controversy about what happens with the workers rights, in other words, if we achieve technology solutions that do better choices than the traditional ones, someone in the middle has to lose something.
It is demonstrated that the more new economic paradigm grows, the less labor equality happens, and more than the equality here we are talking about the amount of payment received in equal conditions. Uber, Deliveroo, and so on, reduces the salary of the “collaborators” drastically to achieve their low-cost strategies.
For the time being in the real economy these new actors means a small percentage of the gross domestic product, more than the actual impact, we have to look for the trend, the fact is that this kind of services are growing exponentially instead of linear.
We face a future where we need to think about the Universal Income, the same technologies that cut of prices and salaries at the same time, has to provide a guarantee wellness for every citizen. The reality is that we are living transformational changes that will shape the economies of the future.
Concerning the “Uberization” of banking, we have to look back and think that for the past ten years we have been thinking about the role of technology in global and local economies towards what is emerging as a new digital economy.
A priori the banking system was born to intermediate between the money that an individual lends to the bank and the individual who requests a loan to finance a company. The reality is far from the first principle of organization. What you do is create money out of thin air, lend it to high interests and increase the price of the market. This system is called FIAT Money and the origin of the eleventh century in China, which is based largely on a fossil fuel, which is not only limited contaminates, but also accumulating debt as a livelihood.
We do not want to convey a message that can be interpreted contrary to what we call “system”, if not what this article pretends to analyze is the current system, without labeling it old labels on capitalism, socialism, communism, etc. The aim is to pro-system, trying to interpret current socio-economic policies in relation to new socio-technological trends. See the point of connection between present and future and understand that more than policies or systems, the truly interesting of these new times, are the new ways of organizing among people, using technology as a tool and people.
The classical economy (late eighteenth and early nineteenth century) can be considered a good system of organization in a market free of opportunities, in which the personal autonomy of the individual acquires more value than intervention in the state. Combined with the new technologies, you can reach an unprecedented level of global wealth and wealth and where your resources will be the cornerstone, rather than de-economize the resources you do not have.
In fact, the latest digital banking products and services that look so modern are based on the most classic economics principles. The so-called digital transformation, which means a full-fledged revolution, recovers the basic values ??of the classical economic school.
Starting from a blocking situation in which cash does not circulate and the level of indebtedness equals or exceeds GDP in most cases and in which Lehman Brothers, Goldman Sachs, JP Morgan and so on. Generate “wealth” through fictitious products that generate a toxic, unpredictable, deregulated and chaotic value, the most sensible would be to lay the foundations of a new economy based on the resources available on the planet, coupled with a process of digitization. The internet of things can greatly help to estimate what you have and accordingly optimize what you consume.
The map below shows the debt to GDP (GDP) ratio. The question we would pose in this new digital environment would be whether GDP could be considered as a valid indicator.
The mistake comes when we think we are in a capitalist economic system that does not exist as such. We are in a hybrid between a system of Plutocratic government in which an oligarchy is created favorable to 1% of the world population, combined with a socialist system in which the banks are rescued by the governments that represent the societies and in which they apply downward their interpretation of what should not be a favorable capitalism over resources that do not have and applying interest on an unreal debt.
All this gift is wrapped under what was 100 years ago the great novelty of the neoliberal economic current, in which all power and economic regularization was ceded to the centralized state.
Against this background, the new digital native companies together with the citizens are having “techno-logical” reactions that mix classic economic sociological behaviors with unprecedented technical, decentralized capacity and connectivity, and solve basic issues that should be covered by the current model.
In the new digital ecosystem we move to P2P lending structures, online investment systems, crowfounding, payments and digital transactions, personalized banking, data analysis, etc. New options based on mobility and agility. The table below shows a summary of the new market players.
The objective is clear, this new economy tries to avoid unnecessary intermediaries that inflate prices or, rather, to change old intermediaries, reducing commissions and increasing interest rates on profit. Streamlining cash flow and constituting new ways of organization for the distribution of capital and wealth, focuses on democratizing investment access by working the micro account model.
To sum up: to improve and update the traditional banking model with its products and services that has not been renewed in centuries and looks sideways, suspicious and late to unprecedented technological and exponential developments that create a new economic world connected and endless possibilities.
The new investment models follow or replicate technical patterns on which the Internet has been built but at another conceptual level and with other applications, free open source platforms, P2P (peer to peer) and, ultimately, the rupture of structures vertical, fixed and centralized models to decentralized and distributed horizontal, multinode models.
The proliferation of the sharing economy is positioning new economies that are based on B2B (business to business) such as Salesforce and P2P (peer to peer) such as BlaBlaCar or Airbnb, it could happen that capital investments will be generated between these models. That one company invest in another is not new and that one individual invest in another. This is how the Chinese work, they do not ask for loans to banks, they ask for credits among themselves.
That is, your savings in the bank fall within a circuit of the stock market, in which the bank invests for you at a minimum profitability. If you take control and risk in the stock market you can get more profitability or ruin traditional markets, but there are already implanted P2P models in which individual people invest directly in people, with an intermediary website, increasing the return on investment and minimizing the risk.
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