Uber and the On-Demand Economy

| Author: Ane Ohm

Who loves the “next big thing?” I’m so tired of hearing about mobile, cloud, big data. And yet… it’s true these have all had a profound influence on us. So what’s the next “big thing?” I’d argue it’s the On-Demand Economy and it’s coming, fast.

Uber launched its first car service five years ago with a few cars in San Francisco. Today it has a valuation of $41.2 billion. Let me pause a moment for that to sink in. It’s not a typo – that’s billions of dollars. For a point of comparison, that’s higher than Delta Airlines, Salesforce.com, or Kraft Foods. The combined market cap of the three largest global staffing companies—Adecco, Randstad, and Manpower—is $25 billion.

Now another critical point: Uber’s total addressable market for car services is $11B. If car service domination is their ultimate objective, the math doesn’t work. So what’s going on?

To figure this out, first let’s look at what they’re actually doing: matching a job that needs to be done (someone needs a ride) with someone who will do the job (driver willing to provide the ride).

Matching a job that needs to be done with someone who will do the job. Does that sound like something we do every day in our businesses? Recruiting, watch out.

 

Perhaps you’re a bit doubtful, which I understand. I mean, really – what could that actually mean for us? It reminds me of another little Internet company: Amazon. At first, it was simply an online marketplace for books. Five years after Amazon’s launch, if you asked grocery chain CEOs whether they thought Amazon was a threat, they’d probably think you were an idiot or simply crazy. Ask those same CEOs today what they think about Amazon.

 

Of course, it’s not going to be easy for Uber and its competitors to move from what’s basically a consumer-to-consumer (driver-to-passenger) application to a business-to-consumer (hiring company-to-job seeker) app. Understanding the complexity of organizational decision-making is a distinctly different animal. As we know, corporate recruiting and staffing aren’t as simple as a car service (just like books for Amazon). At the same time, Uber and similar cohorts have raised billions of dollars to solve this problem. With a vision, the financing, and solid iteration, they’ll get there.

 

Keep your eyes open for the On-Demand Economy. The future is coming, whether we like it or not.

 

Ane Ohm Bio:

Ane Ohm is the CEO of HarQen, a Milwaukee-based recruitment technology company. She also serves on the Boards of The Good Jobs, a turnkey solution for attracting and retaining talent, and the Bread of Healing Clinic, a free clinic in Milwaukee. She was recognized as 2010 Woman Manager of the Year by Women in Management, Fox Cities chapter.

 

Ane is passionate about using technology to help organizations identify, attract, and retain the right people for the right job. Her career experience designing recruitment strategies for Fortune 100 companies has given her invaluable insights on how technology can best be integrated into recruitment processes to hire the best talent, faster and more efficiently.

 

In prior positions, Ane was President of LaserNet, Inc., a statement print/mail company, and Vice President at Pinstripe, Inc., where she played an instrumental role in the company’s rapid growth in recruitment process outsourcing. Before joining Pinstripe, Ane held various leadership roles at Strong Financial Corporation, including Vice President and Director of Mutual Fund Administration. Ane started her career as an auditor with Coopers & Lybrand (now PricewaterhouseCoopers) and graduated with a BBA-Accounting from the University of Wisconsin-Madison.