Uberisation or uberization is a neologism describing the commoditization of an existing service-based industry by new participants using computing platforms, such as mobile applications, in order to aggregate transactions between clients and providers of a service, often bypassing the role of existing intermediaries as part of the so-called platform economy. This business model has different operating costs compared to a traditional business.
The term is derived from the company name “Uber”. The company developed a mobile application that allows consumers to submit a trip request which is then routed to Uber drivers who use their own cars.
Uberisation has been made possible by the development of digital technologies developed in the 20th and 21st centuries. Business organisations such as Uber, Grab, Lyft and Airbnb enable potential customers to be put into direct contact with potential providers of a service. The phenomenon of uberisation is characterised by the elimination or quasi-elimination of middle man roles.
Uberised business formats are characterised by the following elements:
- The use of a digitalised platform enabling peer-to-peer, or quasi-peer to peer transactions
- Minimising the distance between the provider and customer of a service
- The use of a rating system for the quality of the service provided by a provider.
Uberisation has, as of yet, taken place in a limited but growing amount of industries. For example, with the advent of Airbnb, the hospitality industry has been transformed to a large extent, estimated by industry analysts to have a total annual value, just in New York City, of over US $2.1 billion. While uberisation has been criticised as potentially catalysing a chaotic shift by undermining existing corporate models in the hospitality and taxi industries, existing companies in industries such as marketing can use the phenomenon to reduce expenses and provide more specialised services for customers.
Uberisation has been criticised for its role in facilitating the decline of labour-intensive industries, and hence for threatening jobs.
Uberisation has also raised concerns over government regulations and taxation, insofar as the formalised application of the sharing economy has led to disputes over the extent to which the provider of services via an uberised platform should be held accountable to corporate regulations and tax obligations.
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Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.