The gig economy continues to expand, frustrating the old guard

Unless you’re completely off the grid (in which case you wouldn’t be reading this) you’ve no doubt heard about ride-sharing. Uber, Lyft and other companies have continued to completely disrupt the old, established model of taxis and car services. This has happened despite tremendous and frequently successful lobbying efforts by those older, established companies and their unions who have convinced politicians to throw up one roadblock after another (sometimes literally) to their success.

Advertisement

Now Uber is moving into another, less obvious area of ride-sharing. It’s designed to attract those health-conscious consumers who prefer to travel locally on two wheels without the benefit and expense of a motor. They’re picking up a bike-sharing company. (Tech Crunch)

Uber has acquired bike-sharing startup JUMP for an undisclosed amount of money. This comes shortly after TechCrunch reported that JUMP was in talks with Uber as well as with investors regarding a potential fundraising round involving Sequoia Capital’s Mike Moritz. At the time, JUMP was contemplating a sale that exceeded $100 million. We’re now hearing that the final price was closer to $200 million, according to one source close to the situation.

JUMP’s decision to sell to Uber came down to the ability to realize the bike-share company’s vision at a large scale, and quickly, JUMP CEO Ryan Rzepecki told TechCrunch over the phone. He also said Uber CEO Dara Khosrowshahi’s leadership impacted his decision.

“I had a chance to spend a couple of evenings with him, and really talk through his vision for the business and our vision, and saw a lot of alignment,” Rzepecki said.

I’ve been puzzled by the advent of the bike-sharing model since the beginning. First, bikes aren’t all that expensive, particularly if you shop for a used one, and they don’t require much space to store them. Compared to cars, there are far fewer barriers to bike ownership so it didn’t sound like the demand would be all that high. Further, the prospect of people stealing the bikes was obvious from the beginning. When they launched a bike sharing program in Baltimore last year, two-thirds of the bikes were quickly stolen and the program was facing possible cancellation before it had even begun. But these newer companies have really upped their game in terms of how the bikes are locked up (including the ability to disable the bike when it’s not being rented) and many now have tracking systems allowing a stolen bike to be located in a matter of hours or even minutes.

Advertisement

There’s one other new business model in the gig economy to be aware of. Let’s say you already own your own, relatively nice car but you don’t feel like being an Uber driver to make extra money. How about the idea of renting your car out on a short-term basis on days when you don’t need it? It’s being described as the Airbnb for cars and the established car rental companies are infuriated over it. (Washington Post)

[I]n the rapidly shifting transportation landscape, even the Goliaths of the rental car industry — some of the best-known brands in the world — worry about being left behind.

That may explain why some of the largest rental car companies have spent several years waging a quiet legislative war against start-ups led by a company called Turo that are trying to change the way people rent and own vehicles. Turo is a peer-to-peer car-sharing company — think Airbnb for cars.

Like Uber versus the taxi industry before them, this fight is a clash between an old-school business model and a modern technology platform inspired by the sharing economy.

Companies like Turo are allowing car owners to act as an Airbnb agent. But instead of renting out a room for the night they offer up their car for the day and are paid for the rental through a phone app similar to Airbnb. People can establish an account proving that they are licensed and insured, browse the available cars in the area and pick one. The owner drives the car to their location, drops it off and then goes about their business. (Probably using an Uber.)

Advertisement

The big car rental companies are being driven nuts. And just like the taxi companies before them, they are pressuring state and municipal governments to try to shut down this service based on trumped up claims that the Turo users aren’t regulated properly or pose safety dangers, etc. But the Turo user isn’t a company. It’s some person offering to basically let somebody borrow their car for the day and pay them a few bucks for using it.

Uber and Lyft are looking more and more like they will be the end of conventional taxi companies unless those cab companies really up their game. I have to wonder if Turo will do the same to Enterprise and Hertz.

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Beege Welborn 5:00 PM | December 24, 2024
Advertisement
David Strom 1:50 PM | December 24, 2024
Advertisement