Why Uber is largely missing the Corporate Boat for now–Ten Key Reasons why Uber has not significantly penetrated the corporate ground transportation market

Ten key reasons why Uber has not significantly penetrated the corporate ground transportation market (other than syphoning off personal rides by business passengers on their T&E or personal credit card statements) are numerous.  They are:

  1. No solution for the predominantly direct billed (account) billing preference of approximately 80% of the Corporate ground transportation customers in the NY Metro market (and their P Card solution to put all the account expenses on a single credit card leaving the corporate client with a nightmare reconciliation process is no answer)
  2. Failure to accept future bookings which is what every other travel booking platform provides and accounts for a significant (anywhere from 30-40% of the total ride volume)
  3. No answer for corporate lineup or rank/queues
  4. No ability to capture corporate business rules requirements, e.g., cost center, client matter numbers, integral for internal chargeback or allocation of the expenses
  5. No ability to “order on behalf of”, a typical scenario in Corporate where an admin or secretary books/orders on behalf of their boss or VIP
  6. No ability to book multiple cars at the same time, e.g., for an event or small party travelling with same/similar itineraries
  7. Duty of Care gaps—with all the well-documented issues with their insurance or lack thereof with their contractor drivers (and lacking the “gap” insurance typically provided by base station operators). Uber’s callous indifference to the safety of corporate travelers by shamelessly hiding behind the wall of “we’re a software company, you’re on your own and at your own risk” shows disdain for their customers.
  8. Sub Standard criminal back ground checking to weed out drivers that are sub standard
  9. Uber’s outright refusal to provide ANY MIS or reporting on their ride data, which corporate craves for their own internal Big Data requirements. Uber shamelessly hides behind their own wall of lawyers and right to privacy of the data—even when that data is tied to a corporate credit card that is the property of the corporate entity they’re supposed to be servicing!
  10. Outrageous “surge” pricing that ramps up to 16X the normal rate during supply shortage just won’t fly in corporate where negotiated rates and predictability of expenses and procurement-methodologies are totally anathema to Uber’s surge methodology.

Wow, only ten reasons. I thought there were more.

In short, right now Uber is a consumer app only and while they’ve successfully indirectly disrupted the corporate car service/limo business primarily by shrinking their competitors supply of drivers by poaching their competition’s drivers away, making less cars available for the corporate end user, to some degree forcing corporations to use their service, Uber clearly still doesn’t have an answer to the corporate business model–except to win the war of attrition.

But the question is, why, after being in the space for over four to five years, knowing that the corporate car/limo service is nearly what the consumer spend is do they not have an answer?  What is Uber waiting for?  Instead Uber continues to try to expand in foreign markets now to enhance their global reach (and their litigious activities which have banned them all over the world).

One simple reason could be, as a so-called disrupter, Uber is playing a waiting game, a game of attrition, determined to weed out all their competition by continuing to poach drivers from their competition so that eventually corporations will have no choice but to use their services—on their terms. It is a position of pure arrogance and short-sightedness.

But of course a main reason one could state Uber has chosen to avoid/ignore reasons 1-10 on the prior page is one can easily see it would total lay waste to their current, simplistic, steam roller business model. For Uber to implement all of those requirements from corporate would require them effectively admitting they’re no different than anybody else and that is simply not going to happen with an organization as arrogant and determined as Uber.

Some speculate the only people that ultimately will benefit from Uber are the initial investors and investment banks involved in their eventual IPO, who will rake in the short term dough, as it’s not clear that Uber will be in the mix long term.  Many speculate shortly after their IPO they will implode.

Interestingly, however, Uber fails one of the critical litmus tests for a true industry disrupter—what they serve the greater good.  Yes, their app made it easier to order and get a car and yes, some of their trips are cheaper (subsidized by their own obscene pile of cash they’ve amassed) than their competition,  is 16X surge pricing beneficial  or “for the greater good?” Is charging New Yorkers extreme surge pricing during hurricane Sandy ‘for the greater good”?  And what happens if Uber is the only game in town? What has happened with every other monopoly—is lack of competition good or bad for consumers??

Speculation leads towards their real future and pursuit being what to do with all the big data they’re compiling on their passengers and will likely try to leverage and or sell (legally or not) to other retail scenarios and or in partnerships with other callous cash rich entities like Google.

So Uber does not fit the true disrupter definition—they won’t benefit the greater good. They plan to benefit only themselves ultimately.

So when will Uber come up with a real answer to Corporate’s needs? Maybe never.   Does Uber think If they’re the only game in town, corporate will have to capitulate to their business model ?  Maybe they think they can convince enough of their salivating investment banker clients to force their service on the very IBanks they work for, by-passing all the critical items mentioned in 1-10, ignoring the banks’ legal, compliance, operations, procurement and practically every other silo’s internal guidelines and business rules, the same ways that these banks lost their minds in the recent financial debacle, nearly ruining our economy.  Stay tuned.


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