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Logistics

June 01, 2013

I had the pleasure of using Uber for the first time this weekend while visiting a friend in the city; I was blown away. Most people think of traditional tech startups as an entirely virtual product: a new social network, a way consuming news, an eCommerce service, etc. Uber is perfectly tackling an enormous problem by leveraging smartphones: Logistics.

The GPS found on iPhones has given the company every competitive advantage a luxury car service needs over taxis.

  • They know where the customer is.
  • They can predict traffic patterns.
  • They give the rider an estimated total cost.
  • They estimate how much time until a rider is picked up.

These are the core competitive advantages that make the product worth a premium. They don’t need to compete based on price because the service offers so much more. More startups need to be like this.

Maybe someone starts a food service that leverages nearby markets to do home deliveries (track the dates of shipments to a given groceries store and offer discounts on food approaching the expiration date, thus eliminating food waste).

Maybe someone starts an on demand cooking service where people can request private chefs who are taking a day off from their normal job but would still like to work.

There are so many ways startups can disrupt traditional industries by offering on-demand physical services. The market is ripe for competition disruption.