Learn from Uber, a share business! !!

Learn from Uber, a share business! !!

Uber is famous for sharing, which is the key to efficiency! I would like to know about sharing by knowing Uber.

Thorough explanation of the typical ride sharing service "Uber". Usage, business model, impact on the industry
As the largest ride-sharing service (hereinafter referred to as ride-sharing service), Uber continues to expand its power all over the world, including the birthplace of the United States.

The momentum never stopped, and we succeeded in raising funds for further business expansion one after another. It raised $ 3.5 billion from a Saudi Arabian sovereign wealth fund on June 1, 2016, and is said to have a market value of $ 62.5 billion.

In this article, we have summarized Uber's business model and competition to provide sophisticated ride-sharing services, as well as issues at home and abroad, and a phenomenon called Uber syndrome.

1. 1. What is Ride Sharing Service Uber? Innovative business model never seen before
What is Uber
Uber is a service that handles everything from vehicle dispatch to boarding and payment on your smartphone. All these procedures are completed with a simple app operation. In Japan, only taxis can be dispatched by Uber, but in the United States and other countries, vehicles driven by general drivers other than taxis can also be dispatched.

It is a service that belongs to the "moving sharing economy" that matches users who want to travel by car more profitably and efficiently with drivers who want to earn extra income by using the car in their spare time.

The advantage of the rider (passenger) is that nearby cars can be dispatched immediately and accurately using the GPS function, and the driver is not instructed to the destination or given or received money in the car, and the arrival can be smooth. I will. The process of calling the taxi company, waiting for arrival, arriving while explaining the destination to the driver, and paying in the car is omitted.

Drivers, on the other hand, can use their car to become drivers in their spare time and as a pocket money earner. The driver must register his / her identity. The rider and driver are evaluated mutually after boarding, which leads to improvement of the driver's driving manners, customer service attitude and manners on the riding side.

Uber is divided into economy, premium, and accessibility (wheelchair-accessible vehicles with child seats) depending on the vehicle type, and the charges are different for each.

There is also a service called UberPOOL where you can ride-share and share your rates with other passengers traveling in the same direction.

Uber TAXI, Uber TAXILUX, Uber BLACK, which uses Uber's exclusive hire, and vans are available in Japan. For reference, the charges are listed below.

Uber BLACK… Uber exclusive hire

Van ... Van (Vehicle for a large number of people)

Starting fee: 103 yen + 67 yen per minute + 309 yen per 1 km

Minimum charge: 823 yen

Cancellation fee: 1,029 yen

Uber TAXI / Uber TAXILUX ... Taxi dispatch

Pay the meter fee.

Pick-up fees vary depending on the taxi company to which the taxi is dispatched.

(Usage fee in Japan. As of April 2017)

UberTAXI and UBerLUX incur a reservation fee of 500 yen.

Under current Japanese regulations, Uber drivers are limited to vehicles with business qualifications due to the Road Transport Act. Regular drivers are not allowed to register with Uber and pick up and drop off in their own cars.

Uber Business Model Features
The advantage of Uber's business model is its ease of use.

If you can easily arrange a car with your smartphone, it costs about two-thirds as much as a conventional taxi, and the driver's customer service is good, you can understand that the number of repeaters will increase.

In the United States, Uber-registered drivers can earn 80% of their revenue and can earn up to $ 90,000 a year. By comparison, many American taxi drivers earn less than $ 46,500.

Uber itself receives a 20% brokerage fee for rideshare matching. It is also smart that you can definitely earn profits by card payment.

How to use Uber

The image above is the actual Uber screen. Basically, it is easy to use with only 3 steps: 1. dispatch → 2. boarding → 3. evaluation.

1. Vehicle dispatch

Launch the Uber app and use the GPS function to specify a vehicle near you. Also specify the destination.

2. Ride

Check the license plate, car features, and driver displayed on the Uber app before boarding. The destination is already known to the driver, so there is no need to explain it.

3. Evaluation

Payment will be charged to the credit card registered on your smartphone. There is no exchange of money with the driver.

Uber from a sharing economy perspective
When Uber first appeared, it became famous as a groundbreaking sharing economy service. By sharing the car (and labor force), which is an idle asset of the individual, with those who want to move, a new market was created.

Uber makes it easier and cheaper for riders to travel than traditional taxis. In addition, UberPOOL allows you to move economically and environmentally friendly by sharing the movement with more people, and with various vehicle options such as hire and van, you can meet the movement needs of all situations. I can do it.

It is also attractive to drivers as a casual side job where they can earn income by using their idle time and vehicles.

And with a driver-rider mutual evaluation system, you can get better service and avoid malicious users. This is also an important mechanism for establishing the sharing economy service.

2. Uber service development in Japan
Uber's deployment in Japan
・ 2014 Uber landed in Tokyo

Uber was founded in San Francisco in 2009. It is now used in more than 70 countries.

In Japan, the trial service started in 2013, and in 2014, we started full-scale dispatch in Tokyo.

UberLUX and UberTAXI, which can be used in Japan, are provided by drivers with green numbered vehicles registered as taxi operators. Currently, all the services provided in Japan are green number vehicles with business qualifications.

・ Everyone's Uber and administrative guidance

In 2015, Uber started "Minna no Uber" as a demonstration experiment in Fukuoka Prefecture. This was an experimental free ride-sharing mechanism like UberX. However, it was canceled due to administrative guidance from the Ministry of Land, Infrastructure, Transport and Tourism in about January. The cause was that it was recognized as a "white taku act".

Transporting a person in a private car violates the "white taxi act" (the act of transporting a person in a private car other than a licensed taxi operator for a fee) stipulated in the Road Transport Law. It is the view of the Ministry of Land, Infrastructure, Transport and Tourism that there is a possibility.

UberX provides services to the general public without a business qualification using their own car or rental car. UverX is widespread in some countries, but in Japan it has not been developed because it was clearly recognized as a white-tuck act in this case.

"Special" service started in Kyoto
Kyoto Prefecture has been approved as a national strategic special zone for deregulation, and has started "supporting transportation" based on Article 78, Item 2 of the Road Transport Law. This is a private car transportation service that utilizes Uber's app-based ICT.

This is due to the fact that since 2008, when the local taxi operator closed down in the Tango town area of ​​Kyotango city, only the municipal demand bus, whose use is limited, has been operating, and it has become a blank area for public transportation.

This service is expected to be used by elderly people and overseas travelers after returning their driver's license, but there is a risk that problems will remain in using smartphones and tablets for elderly people.

Development of ride sharing services other than Uber
In Japan, notteco, a ride-sharing service targeting medium- and long-distance travel, was launched in 2008.

notteco is a carpool matching platform that connects people who want to travel cheaply with drivers who want to save on the actual cost of moving a car. According to an interview with notteco representative Tosuke, the competition is not a taxi but a service that is closer to a long-distance bus.

Not only is it cheap, but communication and encounters between drivers and passengers also make using notteco attractive. The outlook for notteco is to increase the number of users and capture small markets such as departures / destinations that existing services cannot handle.

3. 3. Challenges in ride-sharing services
Rideshare insurance for drivers and expansion of the insurance market
The ride-sharing market is expanding in the United States, and businesses have a mechanism to insure drivers in operation to ensure safety. However, there were some cases where the insurance alone was not enough.

Along with this, ride-sharing driver insurance has been created that focuses on off-time and waiting insurance coverage for drivers who are not covered or have limited coverage by ride-sharing operators.

In Japan, Tokio Marine & Nichido Fire Insurance Co., Ltd. and the Sharing Economy Association have started selling liability insurance exclusively for the sharing economy. It covers the legal liability in the event of a personal or objective accident associated with the provision of the sharing service.

This also applies to sharing services such as private lodging.

Conflict with existing players
Uber, which is rapidly gaining market share, has been opposed by existing players in the industry.

In Japan, Uber is just a taxi dispatch app, but overseas, there are many cases where taxi industry groups have demonstrated or sued because ordinary drivers take away the job of taxi drivers. .. Because Uber offers its services in a "ride-hailing service," it's a problem with the fact that regular taxis are exempt from the requirements and regulations they must comply with.

As the hotel industry has protested against Airbnb, there is a ubiquitous composition of existing vendors who are about to lose their share due to the emergence of new services and mechanisms, but Uber is also There is a similar situation. Some services seek coexistence with existing players, but if that is difficult, it can be a major barrier to the expansion of sharing economy services.

Issues of legal regulation in Japan
In Japan, ride sharing such as Uber and Lyft falls under the "passenger car transportation business", so the mainstream view is that you should not do it without permission. Unless this law is put in place in some way, the UberX system will not spread in Japan.

As the sharing economy service spreads worldwide, urgent legislation is required to keep up with it.

Safety and reliability issues
In addition to legal issues, Uber and other sharing economy services are still often worried about safety and reliability.

Although Uber checks personal information from the driver, it does not directly manage labor or vehicles, so it is up to the driver to manage safety. If there is an accident, because it is a new service, regular insurance may not be applied, and the risk remains.

Although the driver-rider mutual evaluation system prevents malicious service, some people are reluctant to drive a personal vehicle rather than a professional driver. There is no doubt that there are a certain number of people who prefer the existing taxi transfer service.

Ride sharing has not yet penetrated nationwide in Japan, and it can be said that the psychological barriers for both drivers and riders are still high.

Four. Popular Uber-type business model
The situation in the home country of America
Currently, Uber's most powerful rival is Lyft, a ride-sharing service from San Francisco in 2012.

Lyft is easy for ordinary drivers to enter, and although the service called Lyft Plus is more expensive than regular Lyft, it will dispatch a premium SUV car at a price 20% cheaper than Uber.

Uber overwhelms sales in 2015, and Lyft is said to have a market capitalization of $ 5.5 billion as of 2016, which seems to be far from Uber with a market capitalization of $ 62.5 billion. However, the growth rate that has reached the current market capitalization in the first few years since its founding will be considered to surpass Uber.

While Uber is upscale, Lyft's branding is characterized by friendly customer service. As a business operator, Lyft's operations believe that improving the treatment of drivers will ultimately lead to improved services for passengers, and we are promoting the acquisition of drivers by providing financial support.

The existence of strong rivals in the industry can be expected to improve the quality of services provided and the treatment of drivers.

Uber deployment around the world
Uber in China
Uber China, which had been operating in China, was acquired in 2016 by merging with Didi, which has a 90% share in China.

Founded in 2012, Didi has spread throughout China, covering more than 400 cities. The hurdles for driver registration requirements are low, and the overwhelming number of registered drivers and the large number of cities in which they are deployed have earned the support of riders.

On the other hand, Uber China was unable to gather drivers because it aimed at luxury routes and imposed conditions such as luxury cars and new car use on drivers, and could not take the share from "Didi". ..

Related article: China's explosively growing sharing economy market! The background and the difference between Japan

Uber in the UK
Unlike Japan, the UK has a lower barrier to entry for ride-sharing services, as it is legally possible for drivers to pick up and drop off riders in their own cars for a fee. However, it is not a smooth sail.

We have been in service in the UK since 2012, but in 2016 the Employment Tribunal ruled that Uber drivers are Uber employees. As an Uber employee, you have the right to the minimum wage and paid leave in the UK.

Uber has the view that the driver is an independent business and is considering an appeal.

In addition, the ride-hailing app "Karhoo" is expected to penetrate the UK against Uber, which tends to have conflicts with the government and existing industries. The open platform allows taxi companies to connect their systems to Karhoo. It seems that it has partnered with a taxi company and has received a favorable response from the taxi industry.

Uber in Europe
Uber seems to be struggling to roll out services across Europe.

Uber was banned in Berlin, Germany in 2014. The purpose is to prevent incidents and accidents caused by drivers who do not have professional driver qualifications and carry passengers in business, and to protect public transportation.

Similarly, in France and the Netherlands, her Uber use by an unlicensed amateur driver was banned.

In Italy, Uber has been told to suspend operations in Italy because of unfair competition.

In each country, the goal is to protect drivers and riders from accidents and to protect the transportation industry, such as taxis, from unfair price competition.

Related article: Laws and regulations overseas and in Japan for ride sharing

Five. Destruction of existing industry "Uber syndrome"
What is "Uber Syndrome"?
"The phenomenon that existing companies are declining as new business model competitors enter the market" has come to be referred to as "Uber syndrome." It is a word that was created in the process of transforming the industry by Uber, which is deployed all over the world. Also known as "Uberization".

In the case of the United States, in January 2016, there was news that San Francisco's largest taxi company would file for bankruptcy under the Japanese Civil Rehabilitation Law.

It is said that the cause was a large amount of compensation due to the accident, a decrease in the occupancy rate, and intensified competition with ride-hailing app services such as Uber. It seems that one of the factors was not only the loss of passengers, but also the fact that drivers flowed to Uber and Lyft, making it difficult to secure drivers.

Rental car services are also available for those who want to be a driver on Uber or Lyft but don't own a car. A service called Breeze costs about $ 50 to rent a car. If a driver rents a car from a taxi company, it's an attractive number for the driver, considering that it costs about $ 120 a day.

Ride share
In this way, Uberization can put pressure on existing industries, but it is not limited to the automobile transportation industry.

A business model like Uber that allows users to share various genres of things such as services, items, and spaces by making full use of IT is called the "sharing economy" and is attracting attention. The sharing economy is characterized by shifting economic activities centered on purchasing and consumption to sharing.

In addition to the already well-known private lodging service Airbnb, a variety of services such as Style Lend, which rents out clothes that are not worn, and TaskRabbit, a miscellaneous service such as housework, have been launched. In Japan as well, business models for the sharing economy are being created one after another.

In the future, IT efficiency may erode existing industries into new business models.

6. Summary

The movement to share things through IT tools such as smartphones, such as ride-sharing services such as Uber and Lyft, is a good opportunity to revitalize the market economy.

Due to its low cost and convenience, needs are high, and it is expected that the flow of sharing will become more and more active in the future. As a result, the times and industrial structure will change drastically, existing industries may be eliminated, and new business models that have never existed may develop.