Uberization (or Uberification) of the Economy

Uberization (or Uberification) of the Economy

Nabyla Daidj (Telecom Ecole de Management, France)
Copyright: © 2018 |Pages: 11
DOI: 10.4018/978-1-5225-2255-3.ch204

Abstract

The global availability of the Internet, along with innovations (innovation comes in a variety of products, services and applications) explain certain aspects of the dynamics of the innovation process, the diffusion of technology and the development of various platforms (product and service marketplace, social networking platform, content platform). Uber has been a driving force behind the emergence of new kind of platforms services connecting consumers and providers in real time and organizing information without any ownership of the products concerned. Uber has changed the rules of the economic game and its success has inspired the term “uberization”. Uberization exposes both traditional groups to direct competition with new entrants (especially peer-to-peer platforms operators). This fast-growing phenomenon is seen today as an important feature of economic transformation.
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Introduction

The management of technological innovation is one of the most demanding challenges today (Dodgson et al., 2008). The external environment characterized by globalization, convergence, competitive/market uncertainty, time-to-market pressure, shortening product lifecycles is also based on knowledge, information, fast-changing technology and an innovative economy. In recent years a series of innovations and trends have changed the way people perceive technology. The global availability of the Internet, along with innovations (products, services and applications) explain certain aspects of the dynamics of the innovation process, the diffusion of technology and the development of various platforms (product and service marketplace, social networking platform, content platform).

The Uber taxi-booking smartphone app, matching those who have cars with people who need rides quickly, was created in 2009 in the US and has been progressively launched all around the world. Since this pioneering app, several other start-ups operating in various activities (transportation, flower and food delivery, events, home services, legal services) have adopted a Uber-like business model (BM) and more and more companies are looking to disrupt regulated industries, such as banking or healthcare.

Uber has been a driving force behind the emergence of a new kind of platform connecting consumers and providers in real time and organizing information without any ownership of the products concerned. Uber, based on trust (MacDonald, 2016), has changed the rules of the economic game and its success has inspired the term “uberization”.

The objective of this chapter is to gain a more precise understanding of uberization and in particular its theoretical scope. How would we combine uberization with other accepted and widely used concepts in economics and strategy, such as platforms, multi-sided markets, externalities and business ecosystems? Is uberization a relevant concept, an all-purpose word with a multitude of meanings or just a buzz word?

This chapter attempts to answer these questions and is structured as follows. This first section introduces the topic and key concepts and presents a brief overview of the evolution of the Uber phenomenon to a larger trend named uberization or uberification. The second section discusses the conceptual and theoretical framework to analyze the development of uberization. It develops a strategic and economic perspective. In section 3, several recommendations are proposed. Section 4 suggests directions for further research. Section 5 concludes.

Key Terms in this Chapter

Disruptive Technology: Disruptive technology or innovation create major changes in industry frontiers, business processes and business models.

Online Platform (Company): Integrated web-based platform company allowing people (consumers, “independent contractors”) who want to share assets online.

Business Ecosystem: Interorganizational network (coalition) which brings together actively involved organizations who belong to different sectors, but share the same interests, values and common goals.

On-Demand Economy: Refers more and more to uberization closely related also to sharing practices spreading across several sectors as banks, insurance, tourism, transport, food delivery, connected health or retail.

Peer-to-Peer Platform: Platform whereby two individuals can communicate, interact (and sell) directly with each other, without intermediation by a third-party.

Network Effects: They are related to correlation between the number of users of a network for a specific good/service and the utility of this good/service.

Sharing Economy: known also as collaborative consumption referring to peer-to-peer-based sharing of access to goods and services.

Uber: The name of a technology company who has launched a smartphone-based app allowing car-sharing service (connecting ride-seekers and UberX drivers). Uber’s development has inspired the term ‘uberization’.

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