Past, Present and Future Transportation Modes of Uber — from Black to Multimodal

Let’s walk through Uber’s history from the product that started an industry (UberBLACK), to the recent launch of ExpressPOOL,to some likely future launches.

UberBLACK

What started it all

Key innovations:

• On demand map
• Driver and passenger ratings that mattered

Key outcomes:

• This made it easy to hail a black car, which increased demand
• Because black cars now had Uber as their dispatcher, the costs of running a black car business also went down
• Both customers and drivers behaved better

UberX

The industry discovered that price matters more than any other factor, and the self-employed driver boom begins.

Key innovations

• Price goes lower
• Self employed drivers become a major new class of worker
• Made taxi licenses outdated, changing norms for how many rides for hire could be in a market

Key outcomes

• As price decreased, elasticity unlocks near-infinite latent demand
• The industry becomes supply-side driven, and competitors faced off not over riders, but over drivers

UberXL (and UberSUV)

The beginning of car type specialization. Drivers can make a bit more, and passengers can flex between # of passengers as needed

Key Innovations

• Guaranteed minimum number of seats on your ride
• Fleet optimization
• Split fare allows individuals to find their own pooling partners

Key outcomes

• The beginning of the increase in passengers per ride

UberPOOL

After a step change in software complexity (and being beaten to the market by Lyft Line, one of the only products besides brand reputation and driverless cars that could disrupt the core business model), Uber goes live with Pool.

By this time competitors effectively couldn’t compete because spatial network effects accelerated. However, the ubiquity of the market would later open up the market for next generation competitors, particularly abroad

Key innovations:

• Pairs you up with strangers so don’t need to make your own carpool
• Perpetual rides for drivers
• Flat fares

Key outcomes

• Got price point down enough to be in striking range of public transit

ExpressPOOL

One of the clunky parts of UberPOOL service is that it usually requires other passengers to go out of their way for the “to Door” part of Door-to-Door. ExpressPOOL streamlines pooling.

Key innovations

• Built network of millions of virtual stops
• Semi-fixed routes (and in some cities, actual fixed routes)
• Estimated walk times

Key outcomes

• Recent, but this one hits hard at bus service with another decrease in pricing
• Will launch the era of Uber as public transit. Uber largely avoided regulation through passenger advocacy and a truly bad competing service (the taxi industry). But mass transit is a far different beast

ExpressPOOLxl (doesn’t exist, yet)

An obvious next step. With logistics getting stronger and the semi-fixed routes getting prices lower, the move down the demand curve continues. Directly taking out city bus routes is now a major threat to municipal bus agencies (I️ studied a Fulbright on this. This happens regularly in other countries even without technology)

Innovations:

• Expanded number of passengers per vehicle

Impacts

• Deep cuts into bus ridership
• Some riders start self opting into Last Mile service by hailing a second Uber

ExpressBUS (doesn’t exist, yet)

The ruse is up. Uber is mass transit. I️ have no idea how the the politics of ADA and public sector unions will play out (two major influencers of public transit networks). Is Uber big enough to ignore regulators there as well?

Innovations

• Nullifying public transit laws?
• Step change increase in capacity

Impacts

• Economics of buses changed forever
• Policy becomes an even bigger part of Uber’s business

ExpressBUSRAPIDTRANSIT (doesn’t exist, yet)

Now that Uber is integrated with transit planning one way or another, it can integrate with existing and new infrastructure. BRT is true transit lovers’ holy grail. Almost the entire impact of light rail, but from faster to implement and less expensive buses. Uber used to be blamed for increasing congestion, but that was before dedicated lanes for Uber buses, Lyft buses, and city buses. After that, buses can carry so many passengers that roads are still faster than they’ve ever been. And a dedicated lane is much easier for driverless technology, accelerating how soon driverless vehicles can become a reality.

Innovations:

• Dedicated lanes
• Uber Buses allowed on dedicated lanes

Impact

• Congestion drops substantially
• Further moves down the demand curve as minutes per mile decreases

ExpressMULTIMODAL (doesn’t exist, yet)

Now Uber has multiple modes and coordinates multiple trips. Uber will now whisk you in an UberX to an UberBRT and then have an UberX waiting on the other side. Or Uber will add more planes, helicopters, VTLs, etc

Innovations

• Multiple trips with one trip
• Combine modes for either speed or price

Impacts

• Revolution in transportation as we get a perfect mix of speed and price
• Uber begins deeper infrastructure work including building cities

This is is of course speculative, but one thing is certain: this industry is only getting more interesting.