Uber: A cautionary tale in banking’s fintech battle
What Uber did to the taxi industry offers important lessons about innovation and regulation for traditional banking providers.
On first blush, banking may not seem to have much in common with Uber, but the speed with which the scrappy “ride-sharing” startup stole market share from taxis provides insight into the fallout financial institutions can expect from fintech’s intrusion into a similar legacy industry — banking.
In ten years, Uber has grown from a one-office shop in San Francisco to operations in 570 cities worldwide. Despite a loss of $3 billion last year, it boasts a valuation of $70 billion and 2016 revenues of nearly $6 billion.
Uber is a disruptor in the truest sense of the term — a firm that upset the taxi industry by completely reimagining the personal transportation business model. They completely shook up the status quo with creative ways to lower costs, add convenience and speed up service.
Uber achieved market dominance by marrying technology with the basic need for short trips in passenger vehicles. And millions of consumers love it. Paired with a mobile phone, they found it easy to call for a ride, monitor its arrival and pay the fare. Uber even provided a feedback loop for building confidence in their drivers. They researched consumer sentiment toward cabs, tapped into a milieu of discontent, and made ride-hailing as simple as a few taps on a phone.
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