Flickr — Alex Geslani — Creative Commons
This past weekend I took an Uber from JFK Airport to my parents’ home in Queens, NY. Upon landing at the airport, turning airplane mode off to request an Uber while walking to passenger pickup has become an automatic habit.
When I got home I realized that the fare was about 20% more than what I am used to paying for this ride. Looks like ride fares are slowly increasing, as expected.
I started thinking about what it would have taken to price compare before making the decision. Why did I not? It would have taken only 5–10 more minutes to ask a Taxi and check Lyft and I was not really in a hurry. Plus, I could have saved some money on a ride that was just taking me 6 miles away. Yes, I could have done all those things but four years into my usage of ride-share apps, I am used to a certain level of convenience.
The internet + mobile technology has magnified inconvenience in such a manner that I cannot even wait 5 minutes to order a car ride.
Instant gratification is one click away. Convenience is one click away. Certainty is one click away. And that click, that first thought when I land of ordering a car via phone, is worth hundreds of billions of dollars.
I grew up in an era where we transitioned from the taxi and public transportation to Uber/Lyft. So there is always a risk that I may go back to that if ride-sharing apps just become prohibitively expensive to use. However, the current generation and future generations will only ever know the rideshare way. They will only know a world of ordering a car via phone. For the 65 Million + Gen Z individuals whose interaction with the world has been shaped by Mobile, Taxis will be an antique User Experience.
And it’s that future value that is being used to generate the enormous valuations of these companies. It’s about buying an option on what we will do out of sheer convenience.
Once you are a convenient default, you have won. And for all these companies that are losing hundreds of millions of dollar every quarter, they want to be that. They are spending this money to be the complementary thought when I think:
“What am I going to eat?”
“What am I going to wear?”
“Where am I going to stay?”
“Where am I going to live?”
“How am I going to get there?”
I definitively thought these companies were overvalued considering how much money they were losing but what I failed to realize in this analysis was how difficult and powerful it is to default convenience.
Becoming a verb is a helluva moat.
“Just Google it”, “Just tweet it”, “I am just gonna Uber”, “Let’s just Doordash”
All powerful examples of companies entering the lexicon and owning valuable real estate for important jobs to be done. But you have to be the number 1 brand to own that real estate. Being second is indeed just a pair of steak knives.