Is “Uberizing” the best focus for a more reliable bottom-line?

Uberizing is not great for business growthIs “Uberizing” the best focus for a more reliable bottom-line?

With 2016 business headlines dominated by the savage stock market beating taking place and the volatile energy markets, not a week goes by without my attending a meeting with someone intent on “Uberizing” an industry. While the Uber phenomenon is surely impressive, hardly any attention is being paid to Uber’s Friday, January 8th announcement they intend to cut prices in 100 of their operating markets.

What can we learn here?  Before the already bad 2016 rapidly turns far worse, businesses must seriously address the root cause problem i.e. lack of expertise capable for engineering significant, sustainable, profitable growth built on fundamentals.

Just as a forever fertile China was supposed to ensure new revenues, coming up with an Uber approach to a mature industry has become the panacea for growth. The BRIC nations have proven to be about as solid as grains of beach sand, with only India maintaining any sense of business vitality.  Far too many companies, devoid of sound business growth strategies to begin with, rushed into major Brazil, Russia and China investments expecting these new markets would by themselves cure all revenue ills.  Now that that hasn’t worked out as anticipated, the same herd is now chasing Uber dreams with similarly ill-conceived plans.

Business development, revenue generation, is a function of a company’s value proposition which is built off a company’s inherent strengths.  Without fully harnessing these qualities even those with the best ideas will not execute.  Unfortunately, the post-2008 business environment has primarily been driven through a cost-management imperative.  As a result, companies no longer differentiate through compelling strengths. There is a tragic lack of business development ingenuity and corporate “muscle memory” to engineer substantial and sustainable growth. The record 2013 through mid-2015 earnings. primarily due to tight cost management and low interest rates. are now giving way to the new reality of an impending earnings recession due to inadequate growth.  Which brings me back to Uber as a cautionary tale.

Pricing power is the ultimate test of true market power.  As much as Uber benefitted by entering a pathetically weak, myopic and poorly managed industry, the brutal 2014-15 winter created ideal conditions for them.  Rather than waiting outside to flag down a cab on a nasty day or paying black car rates, I was a daily Uber customer January through March last year (2015).  Since then I haven’t seen the inside of an Uber vehicle and likely won’t until these extreme weather conditions return! Ultimately, the kind of stuff that makes for a price decrease.

Transaction volume is not to be confused with meaningful revenue growth.  Market size and potential is no guarantee either.  Weak competition may make it easier, but without a high-impact well-conceived growth strategy, built around a company’s unique characteristics, companies will continue to search for quick and easy fixes and the broader economy will suffer.

Would love to hear what you have say about today’s “Uberizing” trend. Leave your comments below.

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