
Why a New Generation of On-Demand Businesses Rejected the Uber Model - DiabloD3
http://www.fastcompany.com/3058299/why-a-new-generation-of-on-demand-businesses-rejected-the-uber-model
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tsestrich
As the co-founder of an on-demand service company [1], I have to agree partly
with the core argument about trust, but disagree with its conclusion about the
model's viability. It is definitely hard to ensure trust and satisfaction
among customers without owning the entire process end-to-end. At our
(currently small) scale, we manage this by offering fanatical customer service
and communicating aggressively with our service providers. However, only time
will tell if this will scale. I think there is a middle ground between a
company shrugging it's shoulders and forcing the responsibility of vetting
onto its customers, and completely guaranteeing quality. For instance, we add
a layer of reviews that otherwise can be hard to find for tax preparers,
stringently vet service providers, and also add a layer of customer protection
by not charging them until they are satisfied. The article makes it seem as if
the on-demand model implies no responsibility for quality by the company.

It seems that the real issue is that on-demand companies that charge a premium
to "traditional" alternatives have a hard time justifying that premium if all
they provide is a thin tech layer on top of said services. Uber is not only
more convenient, but also now cheaper in many cases than taxis. I still think
(albeit with strong bias) that if you can offer convenience AND cost savings,
there is a legitimate value for the on-demand model.

[1] Taxaroo, [https://www.taxaroo.com](https://www.taxaroo.com)

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danieltillett
The real problem is can you run your service with the quality of labor you
will get as you scale. The reason you can offer fanatical customer service is
your people are better than the average in the industry. It is very hard to
scale labor quality.

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tsestrich
That's a fair point, but it's so far down the road that for the foreseeable
future it won't be a problem (at least for us). We're not under VC-backed
pressure to grow at some unsustainable pace, so we can choose to bring on
service providers at a pace that allows us to maintain quality. This
definitely is a problem for the large on-demand companies out there, but that
itself is part of a bigger problem where every startup thinks they need to be
a billion dollar company (for many reasons)

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danieltillett
The pressure to be a billion dollar company comes from the need for the
investors to get a return on their money.

Rapid growth and quality are not normally compatible. I am glad to hear you
have the freedom to grow at the right pace.

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dawhizkid
The real problem with the "Uber for X" comparison is that most of these
startups are just "delivery for X." Uber's core business isn't delivery. The
economics on both the supply and demand side are very different for Uber than,
say, an Instacart or Postmates.

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hodgesrm
Precisely. Uber created a new market by enabling people who need rides to
connect efficiently with people who can supply them. Uber works because
personal automobiles are typically underutilized and cab services in many
locations are awful.

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ricksplat
This is what Hailo did [https://www.hailoapp.com/](https://www.hailoapp.com/)
connected existing cab drivers with customers and skipping the cab company
middle man, and it's a win-win for everybody (customer, cabby, hailo) but the
inneficient middle-man.

Uber did more than this, it also created a new pool of "people who can supply"
by hiring their own drivers with less stringent quality screening than is in
many localities for standard cabs, and then charging more or less the same
price for this lower quality product.

In the Uber case it's a win for Uber certainly, but whether it works for
customers really depends on the level of quality customers expect in a local
market. Established local drivers lose out.

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hodgesrm
Thanks, I unaware of Hailo. It sounds like what I was hoping services like
Uber would actually be.

