Is Uber a true sharing economy business model?

Is Uber a true sharing economy business model?

Whether called a unicorn or the sharing economy’s lead horse, Uber has mostly been considered a gazelle since its inception. ​However, reports that Uber racked up -$1.27 billion EBITDA over 2016s first 2 quarters have let the dogs out. In early ​January 2016,​ I wrote about Uber’s many challenges and foreshadowed the company’s problems were likely to get worse. ​ Now, in the summer of 2016, we​ have a large number released by the company​ ​to attach to those words I wrote in the winter.

Since last Friday’s investor conference call when Uber’s CFO Guatam Gupta released details of the company’s performance, the press has analyzed everything from Uber’s competitive landscape to its cost structure to its disastrous attempts to succeed in China. Rather than rehashing this same ground, today I will focus on Uber’s role in the sharing economy, with some even believing their losses might scar the sharing economy’s growth. Uber is a technology company. Uber is a transportation services company. At best, it’s a stretch to consider Uber a true sharing economy business.

At the core, the sharing economy is all about sustainability. There is nothing sustainable about a company posting Uber’s results. Sharing economy companies have as great a social purpose as they do commercial interests. Uber’s founders tell a story about coming up with their concept after finding it difficult to hail a cab on a snowy Paris night. While convenience improves the quality of life, it not quite as noble a cause as protecting the environment.

To truly propel the sharing economy a platform has to offer more than a single-use capability. Uber customers get reliable delivery, and that’s it​.​ Just like your package shares a FedEx plane or a UPS truck, or the local commuter rail gets you from origin to destination, Uber performs a singularly important function by leveraging technology and critical mass.Mike Berman - is Uber a true sharing economy business?

By contrast, ECrent defines the sharing economy at its very best. The company’s platform allows businesses and individuals to collaboratively consume by building a true community of members — with over 100 (and growing!) categories of available goods and services.

ECrent encourages members to reduce waste, share available assets, promote commerce through new channels, create meaningful income opportunities, and protect the planet. Consistent with the sharing economy ethos, ECrent maintains extremely low expenses. The company’s cost-effectiveness creates the most favorable environment for businesses and consumers to fully embrace the sharing economy experience.

I’m a big Uber fan​! I ​use their services frequently, and ​so I ​am rooting for them to turn the financial corner. But when it comes to engaging the sharing economy ​(​as it is intended​)​, Uber takes a back seat to ECrent.

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