Olivier Fernandes (Colibee): “Uber’s business model will only be profitable by reducing its costs”

by bold-lichterman

Founded in 2008 and seen as an economical and flexible alternative to traditional taxis, Uber is in turmoil today. Despite a valuation of $ 68 billion and a presence in 500 cities around the world, the company is regularly attacked by the corporation and controversial by its own employees. It would have lost 4 billion dollars since its creation, according to Bloomberg. Uber must now reinvent its model in order to survive. The point of viewOlivier Fernandes, president and founder of the network consulting firm Hummingbird.

COLIBEE_066Frenchweb : Uber seems to dominate the VTC market today. Leadership that hides financial difficulties. Can you explain why?

Olivier Fernandes, President and Founder of Colibee: Until today, Uber’s goal has been to gain market share. All the investments of this company went into this conquest of customers, which took precedence over the search for a profitable business model. Not to mention that Uber’s running costs are too high. Uber’s business model will only be profitable by reducing costs.

What solutions do you think are the most appropriate to revitalize Uber?

OF: We often forget that in a platform there is the producer and the consumer. We often focus on the last without thinking about the first. Uber, without a driver, cannot deliver the service it promises to its customers. Uber must therefore also be attractive to them and enrich its model to share its success more with its drivers. Knowing that his business is not profitable today, that seems complicated to me… unless the model consists in doing without drivers in the long term.

In your opinion, is Uber taking an example from other service platforms?

OF: Uber recently launched an “UberRush” same-day delivery and “home meals” offer. UberEats ”to diversify its activity. So it’s hard to read Uber’s strategy and give you an example: Private Driver? Amazon? Deliveroo? They are very different businesses and the key success factors are different too.

To sum up, what are the keys to a platform’s success?

OF: A platform is successful if it has a profitable business model and if it is attractive to those who contribute to its development (customers and suppliers). It can automate the production of its services (driverless cars, automated warehouses, deliveries by drones, etc.), and in this case do without being attractive to its suppliers. However, the entire economy cannot be automated. This is particularly the case for tailor-made services, such as consulting, where the human factor is still key. The platforms will have to cultivate their attractiveness there to attract and keep the best experts for the benefit of their clients.

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