28 August 2016

BUSINESS - Uber Takes Another Innovative Leap

Uber has already changed the way people get around urban areas, and the company has jumped with both feet into technological and economic shifts. Uber is at the forefront of the sharing economy, and uses leading edge software and technology as part of their business model.

The sharing economy is controversial, and with for-profit companies shifting the focus of the model towards an exchange of money for services it’s questionable whether the term “sharing” even applies.

Alternative phrasing includes “on-demand economy” or “gig economy” and for Uber drivers, Air BnB owners, or Fiverr service providers, these terms make more sense than “sharing,” which comes out of initiatives like Wikipedia, where knowledge is shared freely, and Freecycle, where goods are also shared freely.

Whether it’s called the sharing economy, the gig economy, or the on-demand economy, the fact is that this economic model is challenging existing businesses like taxis and hotels, and it taps into the Internet of Things in a big way.

By relying on connected devices to allow peer-to-peer communication and app-based transactions, this new economic model makes accessing services easier and quicker than before.

Uber uses a network of smart devices, including GPS tracking, to connect drivers and passengers as efficiently as possible.

Youngme Moon, a researcher at Harvard Business School suggests that Uber’s point-to-point transportation system and sophisticated software represent a “disruptive innovation” that already has, and will continue to, change the way people move around urban areas.

The next Uber innovation is self-driving cars. The company has announced the launch of their first fleet of 100 self-driving modified Volvo XC90s in Pittsburgh.

Customers can summon a car as usual, and it might show up without a driver. If it does, the ride will be free.

Each of the self-driving cars will be staffed by two trained engineers who can take over if required, and the trunk will be full of monitoring equipment to report back about how the cars are performing.

The complex interaction between devices, collecting and sharing data, is the Internet of Things in action, and Uber is fully engaged.

Uber has been ahead of regulatory bodies since its inception, leaving cities scrambling to figure out how to regulate the business, and this move is another instance of Uber pushing the economy in directions that regulators aren’t prepared for.

Tesla has already highlighted this regulatory grey area with their “autopilot” feature, available on some Model S cars. The move towards self-driving cars will present significant challenges for regulators, insurers, and other industries.

This is also a significant change to Uber’s business model, and shifts them away from the low overhead and minimal infrastructure of driver-owned vehicles to something that is much more infrastructure-heavy. However, CEO Travis Kalanick places a premium on being at the forefront of industry evolutions.

As smart cities move more and more into automation, Uber wants to be at the edge of that change.

They’ve already outpaced Google’s self-driving car efforts, and with their purchase of the startup Otto, have the potential to move into long-distance trucking as another income stream, or simply adapt the technology to their fleet of cars.

By Tiffany Sostar
Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.

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