To most people, Uber is just a cheap and convenient way to get home after a few drinks, but the scope of the business is extraordinary.

Jamie Davies

October 17, 2019

3 Min Read
Uber is much more than a taxi firm

To most people, Uber is just a cheap and convenient way to get home after a few drinks, but the scope of the business is extraordinary.

While the inclusion of Uber at a broadband conference might have raised a few eyebrows, the overview given by Global Head of Connectivity Rahul Vijay demonstrated the creativity, innovation and stubborn drive which has ensured Silicon Valley and its residents are some of the most influential in the world.

First and foremost, no-one should consider Uber as a taxi company anymore, at least not in the traditional sense. The taxi’s might still account for the majority of annual revenues, but the team is expanding into so many different areas it is difficult to sum up the business in a single sentence.

Aside from the taxi business we all know and love, Uber has a commercial business working with the travel teams at large corporations, the food delivery business unit is solidly position in a fast-growing segment, the team also work with insurance companies to make sure patients make it to their hospital appointments and it is also making promising moves into the freight world. In markets in south east Asia, the team has launched a 2G-compatible app and is also applying the same business model to mopeds and scooters. In Croatia, Uber has launched a boat taxi service.

These are the ideas which are up-and-running or currently being live trialled, though the R&D unit is also playing around with some interesting ideas. Autonomous vehicles, flying taxis and drone delivery initiatives are just some of the blue-thinking projects. This is a company where a lot is going on.

The interesting aspect of the autonomous vehicles is not just the technology but the supporting connectivity landscape.

“Without mobility there is no Uber,” Vijay said at Broadband World Forum in Amsterdam.

Some have suggested that Uber will never be profitable until autonomous vehicles are commonplace through the fleet, though it doesn’t seem to be the technology which is worrying Vijay; connectivity is too expensive today.

The test vehicles which are currently purring around the highways of North America transmit as much as 2 TB of data a day. This is not only a monstrous amount of information to store and analyse, but the economics of taking this data from the car to the data centres is not there. Vijay said it is still by far and away cheaper to transmit this data through optical cables than over the air, which is not practical. Until 5G arrives, and is scaled throughout the transportation infrastructure, autonomous vehicles are not a commercially viable concept for Uber.

This also opens the door up to another very useful revenue stream for Uber. With more than 110 million users around the world, 200 new trips are started every second. These vehicles are travelling through cities, countryside’s and down highways. The amount of information on mobile signal strength or the performance of mobile handoff between cell sites is boggling. These are only two areas, but Vijay suggested there could be hordes of valuable information which could be collected by the vehicles as they fulfil the core primary business objective.

For telcos, regulators, governments or cloud companies, this insight could be incredibly valuable. It could inform investment strategies or encourage policy changes. If data is the new oil, Uber is sitting on a very significant reserve.

As it stands, the company brings in a lot of money, but the prospect of profits are questionable. In the three months ending June 30, Uber revenues attributable to bookings stood at $15.756 billion. The loss from these operations was $5.485 billion. The transportation game operates on very fine margins. Share price has declined by 28% since this earnings call, though there is hope on the horizon.

If Uber can gain traction in the new markets it is pushing aggressively into there will be increased revenues, though in monetizing assets which it creates organically, the data collected from taxi trips, there could be some interesting developments.

You May Also Like