bus201

 

There’s an UBER for Everything Now by: Geoffrey A. Fowler May 06, 2015

TOPICS: Business Models, Consumer Behavior, Innovation

SUMMARY: The term concierge economy refers to services provided by independent contractors whose work is scheduled by apps. Consumers use apps to hire help for a wide variety of tasks. These include doing laundry, getting carryout food, shipping packages and parking. Food deliveries, massages and doctor visits also have apps. The services can sometimes be less costly and more efficient than the traditional alternative. An example is Luxe which is a parking valet service. Not only does the service park cars, it also moves them. The daily cost is less than a parking garage.

CLASSROOM APPLICATION: The business model for the concierge economy involves developing an app that provides a service staffed by independent contractors. Some of the apps save consumers money while others are just convenient. It isn't clear if the apps and business models are adaptable outside an urban environment. Prices can be competitive if providers are able to strike deals. Quality control could be one challenge. Apps come and go quickly and there are some horror stories. Another long term question is whether apps can call workers contractors instead of employees. Using contract labor holds down costs.

QUESTIONS:  1. Do an internet search and write up a brief description of the Uber company. 2. Explain why the Uber taxi model is controversial in the eyes of established taxi companies like Orange Cab and Yellow Cab and traditional taxi drivers 3. This article discusses how the Internet can bring together buyers and sellers using apps. What risks are associated with transactions in these markets?