Tag: Uber

Daily links – Chinese property developers go onto internet

Chinese internet use and smart phone manufacturers dominate today’s links along with Microsoft and Uber’s latest business changes

Today’s links have a distinctly Chinese flavour around them with a look at how the country’s smartphone manufacturers are coming to dominate their market, Tencent’s plans for global domination and how property developers are looking to the internet to save their falling sales.

Uber and Microsoft make their regular appearances to round out the links in their changes to billing and security.

Chinese property developers turn to the web

Faced with declining sales, Chinese property developers embrace – the Internet!

How Chinese smartphone makers are beginning to dominate the market

The rise of China’s smartphone makers: 10 of the top 17 smartphone manufacturers now come from China.

An interview with Tencent

Business Insider has an intriguing interview with one of the VPs of Chinese internet giant Tencent.

In his Q&A, S. Y. Lau discusses how Chinese communities are seeing their incomes rise due to the internet. One of the famous case studies of connectivity are India’s Kerala fishermen who used SMS to arbitrage their market. We may be seeing a similar story with Chinese tea farmers.

Microsoft restrict warning of patches to paying customers

In a short term money grabbing exercise, Microsoft have unveiled a plan to only inform enterprise customers of upcoming security patches. My prediction is this won’t last.

Uber cuts prices

Car hiring service Uber has cut its fares in thirty US cities while guaranteeing drivers their incomes. This is probably a move to keep competitors like Lyft at bay.

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Uber and the management dilemma

Is Uber profoundly changing the economy or are even bigger forces at work that will challenge managers?

“Uber-mania reflects a profound turn in the way the global economy is organized,” writes Fortune Magazine’s editor Alan Murray.

That’s a bit of stretch as Uber’s simply an application of the technologies that are changing business and the economy;  those technologies are having a more profound effect on the role of managers in the modern workplace.

Along with services like AirBnB and Task Rabbit, are the result of the new breed of cloud, mobile and big data tools that make it easier to deploy new business models which in  themselves threaten traditional industries and their executives.

Uber’s success is in finding an industry that in much of the world has been ripe for disruption for decades; in most Western cities cab services have been regulated to protect plate holders’ incomes and often to protect corrupt local cartels.

What Uber’s disruption shows is how those tools can be deployed against cosy incumbents.

Probably the cosiest group of incumbents of all have been corporate managers; over the last thirty years businesses have been downsized, workers have become more productive and many functions have been outsourced or offshored.

Management however has largely remained untouched as the need to supervise business functions has remained.

Now those tools – particularly the smart algorithms that run companies like Google, Facebook and Uber – are coming for managers in many industries. Added to the manager’s dilemma are improved collaboration tools that allow workers and machines to communicate and make decision autonomously without the need for supervision.

Possibly the greatest change in business over the next decade will be the disappearance of the manager as software takes over.

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At the mercy of machines

Automation and algorithms are changing business but they are not without risks

Automation is the greatest change we’re going to see in business over the next decade as companies increasingly rely upon computers to make day to day decisions.

Giving control to algorithms however comes with a set of risks which managers and business owners have to prepare for.

Earlier this week the risks in relying on algorithms were shown when car service Uber’s management was slow to react to a situation where its formulas risked a PR disaster.

Uber’s misstep in Sydney shows the weaknesses in the automated business model as its algorithm detected people clamouring for rides out of the city and applied ‘surge pricing’.

Surge pricing is applied when Uber’s system sees high demand – typically around events like New Year’s Eve – although the company has previously been criticised for alleged profiteering during emergencies like Hurricane Sandy in New York.

In the light of previous criticism, it’s surprising that Uber stumbled in Sydney during the hostage crisis. Shortly after criticism of the surge pricing arose on the internet, the company’s Sydney social media manager sent out a standard defence of surge pricing.

That message was consistent with both Uber’s business model and how the algorithm that determines the company’s fares works; however it was a potential disaster for the business’ already battered reputation.

An hour later the company’s management had realised their mistake and announced that rides out of Sydney’s Central Business District would be free.

User’s mistake is a classic example of the dangers of relying solely on an algorithm to determine business decisions; while things will work fine during the normal course of business, there will always be edge cases that create perverse results.

While machines are efficient; they lack context, judgement and compassion which exposes those who rely solely upon them to unforeseen risks.

As the Internet of Things rolls out, systems will be deployed where responses will be based upon the rules of predetermined formulas.

Businesses with overly strict rules and no provision for management intervention in extreme circumstances will find themselves, like Uber, at the mercy of their machines. Staking everything on those machines could turn out to be the riskiest strategy of all.

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Uber’s ride into the future

In the wake of a billion dollar fund raising, Uber CEO Travis Kalanick promises to change the company’s culture.

Having just raised $1.2 billion in funding, Uber’s CEO Travis Kalanick has written of the company’s next steps.

Kalanick flags the Asia Pacific as being the focus for the company with the latest fund raising which values the business as currently being worth over forty billion dollars.

That valuation is a massive achievement for a five year old business, with the growth pains involved being one highlighted in Kalanick’s post.

This kind of growth has also come with significant growing pains. The events of the recent weeks have shown us that we also need to invest in internal growth and change. Acknowledging mistakes and learning from them are the first steps. We are collaborating across the company and seeking counsel from those who have gone through similar challenges to allow us to refine and change where needed.

One of the big challenges for a high growth business is managing that growth; systems that work well for a ten person organisation with a few hundred clients fall over when you have a hundred staff, thousands of contractors and millions of customers.

Probably the biggest challenge for businesses like Uber is privacy; what’s clear is the ‘God View’ that allowed the company’s staff to monitor customers and drivers has been abused and is too easily accessed by employees. Tightening data security is going to be one of the major tasks for business.

Fortunately, taking swift action is where Uber shines, and we will be making changes in the months ahead. Done right, it will lead to a smarter and more humble company that sets new standards in data privacy, gives back more to the cities we serve and defines and refines our company culture effectively.

‘Giving more back to cities’ flags what could be a new strategy for growth in places where regulators and governments have been hostile to Uber. One of the reasons for Uber’s success in Sydney for example has been the utter disgust the general population and business community has for the local taxi companies, showing Uber as a good corporate citizen could help in more hostile European markets.

While Kalanick identifies the Asia Pacific as being the big growth market he doesn’t identify in what fields; it’s hard not to think Uber’s software has more potential in logistics than hire car dispatch and this is an area where the company could find more  opportunities to expand the company’s services.

Regardless of the direction Kalanick decides to take Uber, the company is cashed up and ready to expand. As long as management keeps the confidence of investors, the business’ fate is in it’s own hands.

Uber is probably the most fascinating and complex of this generation of tech startups, Kalanick’s post shows it’s story has a long way to play out.

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Riding the startup roller coaster with Uber CEO Travis Kalanick

Starting businesses is not a cushy job as an interview with Uber founder Travis Kalanick shows

A great interview with Uber CEO Travis Kalanick by Kara Switzer in Vanity Fair touches on the mental difficulties facing startup founders.

 

He was depressed after his first start-up failed badly and his second went largely sideways. He was, as he recalls, deeply afraid of failure. “I had gone through eight years of real hard entrepreneuring. I was burned. So, I just wasn’t ready yet,” says Kalanick. In fact, he had been living at home with his parents in his childhood bedroom not long before his trip to Paris, after those two start-ups had failed to flourish.

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Uber looks to sending taxis and lyft ride sharing service to the deadpool

Uber is to launched a new service that further disrupts the taxi industry

In its latest move to reinvent the taxi industry, Uber has launched a new service caused Uberpool reports Techcrunch.

Uberpool allows customers to split fares with other passengers, making the service cheaper. This threatens both taxis and and ride sharing services like Lyft.

It also shows what deep pockets can buy, with plenty of venture capital funding Uber can afford to experiment with these services. Those resources makes it hard to compete against Uber.

For Lyft and many of the other hire car startups, Uber is doing everything it can to drive their businesses into the deadpool.

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Fighting a loss making business

Uber follows the Amazon tactic of hurting the market with its deep pockets

Having deep pockets is a great help in business as the online cab war in San Francisco shows.

As competition heats up on the streets of San Francisco, Uber is trying to put Lyft out of business by offering fares below what they pay drivers.

This has been the long term tactic of Amazon; raise a lot of money and then run your main line of business at a loss.

Amazon have shown you can do this for a long time if investors stay patient. Fighting it is difficult if you don’t have deep pockets yourself.

In the long term though you can’t see this being good for customers, although in the meantime San Franciscans can enjoy cheap taxis.

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