The rise of the car service Uber has come as a host of on-demand platforms have transformed the way goods and services are delivered. The result is a change in the way
The "uberization" of everything has already become a punchline, with on-demand applications for just about every imaginable product or service popping up. Need flowers on demand? That's been uberized. Laundry? That too. Alcohol? Massage? Language tutors? You guessed it: all are now a part of the growing on-demand economy. (Perhaps that last one can help us find another word for "uber.")
I'm not certain if all of these services needed to be uberized, but that's the beauty of the on-demand economy: the market will decide what services are in demand enough to need an on demand option. I suspect many such uberized business plans will find that customers are plenty willing to wait for their products and services rather than access an app to have it provided immediately.
As for Uber itself, the app whence the naming convention originated, while traveling not long ago through La Guardia airport I noticed the overflow lot for yellow cabs. It's the waiting area where cab drivers must sit while they wait their turn for a fare. It was a sea of yellow cars with their drivers sitting around; it was not a particularly efficient-looking way to handle idle resources.
For reference, here's a pic of the lot from Google Maps. I count roughly 200 cars sitting in the lot. That doesn't include the cars also lined up outside the terminal.
Coincidentally, my trip through La Guardia happened not long after a trip to Las Vegas, where instead of a lot for cab drivers to sit and wait, passengers are forced to wait in a line that is often ridiculously long.
Again, not a great way to handle idle resources.
That's really what all of this on-demand discussion is about: putting resources to work more efficiently. There are arguments to be made that treating labor—or more precisely, laborers—as on-demand resources is a step backwards in social terms (see this Robert Reich piece), but anyone who has ever stood on a New York street corner at 5:00 p.m. in the rain hoping to flag down a non-existent cab knows the desire for a better way to match demand to the existing supply.
What, you may be asking, does this topic have to do with payments? The fact is quite a bit. The big issue for many of the suppliers of products and services that are now being disrupted via on-demand platforms is the ability to not only identify customers—i.e. match their supply to the demand—but also to handle the process of getting paid once that match has been made.
Uber, not surprisingly, has been a model for payments in the on-demand economy, moving the payment into the background seamlessly so that it isn't even a consideration for the supplier or the customer. Other such platforms are also figuring out how to move the sometimes messy issue of getting paid out of the way so that it no longer stands in the way of efficiently matching merchants and their consumers.
That's why it's no surprise that figuring out how to make payments efficiently is tied so closely to the rise of the on-demand economy. Paying—and getting paid—are a part of the delivery of any product or service. It's the payment part that makes all that efficiency worthwhile. That's a fact any merchant in the "old economy"—meaning tje regular economy that existed not so very long ago—can attest to. Mess that part up and it doesn't really matter how efficiently you supply your product or service.
(photo credits: Google Maps and Tim Carter.)