I have always loved the expression “Ride the Horse in the Direction it is Going.” And for those of you who have tried to turn around a horse that is determined to go back to the barn, you know exactly what I mean.
So, why do so many companies insist on fighting macro-economic forces?
The record industry was notorious for fighting digital music delivery. It took the pandemic for the motion picture industry to embrace streaming of movies to homes on the same date they were released to theatres.
Uber is different. Despite all of the money previously invested into their ride hailing platform, they have now concluded that the delivery of goods is what the market wants. So they shifted their focus. Decisively. The extent of their pivot in the last twelve months is astounding.
- In August 2020, Uber announced a partnership with on-demand prescription delivery platform NimbleRx to help deliver medication
- In December 2020, Uber completed their acquisition of Postmates
- In February 2021, Uber announced it would buy Drizzly, an alcohol delivery start-up for $1.1 billion
- Uber Eats now owns 22% of the delivery market in the United States
It’s no secret that, in large part because of COVID and increased comfort with remote vs. in-person engagement, the delivery horse in 2020 has been going in the direction of delivering things rather than people. And Uber’s earnings reflect that shift.
Uber’s 3rd quarter 2020 mobility gross bookings (people) were down 50% and their gross bookings for delivery were up 135%. Just reported 4thquarter 2020 bookings were similar: People were down 47% and delivery was up 128%.
Many people mistakenly think that COVID marketplace corrections are an aberration. A dramatic and reversible response to an unprecedented pandemic. That is often not true.
In many industries, COVID has been an accelerator of change that was already going to happen rather than an a short-term deviation before things will ultimately return to “normal”.
Is your industry one of them? As a result, your business may be at an inflection point without your knowledge.
Inflection points sometimes present themselves as a choice between two options, similar to a fork in the road. COVID has changed that. Inflection points as a result of COVID accelerated changes, are often similar to the choice Uber had to make – making a change or staying the course. With staying the course frequently being the wrong direction to take.
It may be time to saddle up and reassess in which direction your business is going. And, what you are going to do about it. Before it is too late.
Read past editions of New Revenue Now that you may have missed:
focuses on new thoughts and ideas that can be used by companies
to strategically make more money.Mark Jaffe