These two factors combined unlocked possibilities (ex: universal delivery service) or significantly improved existing industries (Uber app is far more convenient than finding then phoning the local taxi company and hoping blindly for the taxi to arrive).
Federation eases the use of the service as you don't have to either setup your own service (for example, hiring delivery guys for your restaurant) or find out the local services available (if they existed in the first place), and discover which one is good, which one is bad. The last decade development of mobile networks and smartphones was the catalyst for this evolution.
Cost is the other aspect, these services are cheaper than legacy alternatives. But this second aspect is key. On one hand, these services are losing money like crazy, on the other, they have a detrimental social impact, basically exploiting loopholes in the legislation to have "low rights" workers with no protection. But this will change at one point, laws and court decisions will close the loopholes, and the magic money tree will dry up, meaning these services will become significantly more expensive.
The question, when this will happen is: Was the federation improvement enough to sustain this industry long term? Or was the cost the major factor? If it's more of the second, these start-ups will mostly collapse, if it's more of the first they will become sustainable businesses (specially given it's easy to start using using these services, it's a bit harder to stop using them).
I'm still puzzled as to why these companies are losing so much money, and I cannot help but think these could have have been created with more reasonable losses for their first few years and now, they should nearly be cash flow positive.
Uber app USED to be more convenient than the taxis that had to be called. However the companies have caught up, nearly every European taxi company has their own app. Additionally, not even Uber can beat the ease of just hailing a cab or walking into a cab on the street.
Oh, and they are losing money because of platform competition, nothing else. That she only reason a market is making a loss for Uber, because of price/driver bonus war. I can go more in-depth into this if you want.
I see 2 main factors as to why:
* federation
* cost
These two factors combined unlocked possibilities (ex: universal delivery service) or significantly improved existing industries (Uber app is far more convenient than finding then phoning the local taxi company and hoping blindly for the taxi to arrive).
Federation eases the use of the service as you don't have to either setup your own service (for example, hiring delivery guys for your restaurant) or find out the local services available (if they existed in the first place), and discover which one is good, which one is bad. The last decade development of mobile networks and smartphones was the catalyst for this evolution.
Cost is the other aspect, these services are cheaper than legacy alternatives. But this second aspect is key. On one hand, these services are losing money like crazy, on the other, they have a detrimental social impact, basically exploiting loopholes in the legislation to have "low rights" workers with no protection. But this will change at one point, laws and court decisions will close the loopholes, and the magic money tree will dry up, meaning these services will become significantly more expensive.
The question, when this will happen is: Was the federation improvement enough to sustain this industry long term? Or was the cost the major factor? If it's more of the second, these start-ups will mostly collapse, if it's more of the first they will become sustainable businesses (specially given it's easy to start using using these services, it's a bit harder to stop using them).
I'm still puzzled as to why these companies are losing so much money, and I cannot help but think these could have have been created with more reasonable losses for their first few years and now, they should nearly be cash flow positive.