3 ms·
>Why can’t uber just position itself as a lead generation service for drivers? A rideshare company could theoretically be just a pure lead generation platform
by jasode 6y ago
>Why can’t uber just position itself as a lead generation service for drivers?
A rideshare company could theoretically be just a pure lead generation platform but the economic forces preventing that is the nature of multi-sided platforms: The drivers don't hold all the leverage. The other actor in the multi-sided platform are passengers/customers who _pay the money_.
If Uber was only lead gen, they would be outcompeted by another company that offered all the following conveniences:
+ predictable fixed price to prevent customer anxiety of overcharging
+ integrated payment processing so no worry of drivers playing games such as, "my Square credit card processor doesn't work so you need to pay cash"
+ driver ratings for reputation
... because customers/passengers value those features.
If you create a rideshare platform that's too advantageous to the drivers (e.g. no ratings, can charge variable fare per mile, etc), it would end up being hostile to potential customers and it won't attract enough paying fares to be financially sustainable.
- AnthonyMouse 6y agoThat's assuming the economic cost of not having those things exceeds the economic cost of classifying drivers as employees. Or that those services couldn't still be offered by independent companies, so the customer still has them but the drivers are still contractors because they're not employees of the lead gen company nor the driver ratings company nor the payment app company. It merely so happens that the lead gen company shows the customer whether the driver accepts that payment app and is listed with that rating service.
- SilasX 6y agoWhat you've described is exactly what happened when Sidecar (the totally hands-off drivers-set-prices-and-riders-choose option) tried to compete; they lost against Uber/Lyft and shut down EOY 2014.