After Covid-19, every business playbook would be revisited because nothing will remain the same. In this piece, Promise examines the challenges confronting the sharing economy with specific focus on ride-hailing companies like Uber and Lyft. Already, the virus has sent a clear message: owning assets is not just an economic equation but a security life-and-death one. Yes, when the Uber driver refuses to come close to take that loved one to a hospital, and the Police are tied up with other matters, a personal car becomes valuable.
While entrepreneurs are the major agents of change in the business world, nature is another agent of change. You see how Airbnb and Uber models disrupted the hospitality and the transport industries respectively. But today, Coronavirus is trying to disrupt these business models.
Uber has a double play strategy and is doing just fine with Uber Eats as people, caged at home, order food for home delivery. That partly explains why markets are voting that Uber will thrive over Lyft: Uber 52-week low-high is $13 – $47, while Lyft is $14 – $76.
The end game, going back to my call, is that Uber and Lyft will merge. Covoid-19 may just make it happen faster. People, north, south, east and west, business models must evolve for companies to survive this virus paralysis. Yes, most redesigns must focus on business models as the architecture and heartbeat of economic systems – like community trust – are already wounded by Covid-19.
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In this piece, I explain why Uber and Lyft will merge. The trajectories both are following show that they will have challenges with Lyft gaining on Uber, but the overall industry cooling. As soon as that happens, their margins, if they have any, will collapse. Once that happens, they will begin to talk of merger, with each other. Government will see their struggles, and will dismiss any anti-trust concern gone. The result: it will bless their union. Uber is today’s Category-King, but its past behaviors have slowed it down, offering a window for Lyft to catch-up. As they become peer-competitors and rivalries, they will destroy the sector. Similar rivalries have ended together:: Elance/Odesk (now UpWork), Groupon / LivingSocial, Sirius / XM and Rover / DogVacay. Please add DraftKings and FanDuel in the list; I predict they will merge also despite any FCC ruling, at the moment. They will struggle, owing to wounds they inflict on each other, in coming years, and will be saved via merger
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Great analysis.
It’s good to know that even the disruptor and disruption can be disrupted.
But, in my recent article I proposed a selfless driving solution to the social distancing measure to contain the covid-19 pandemic. This is the future of ride hailing, it has become important in the present.
But, its either the players innovate or they are eroded.
Sure – there would be many elements to this.