Why “Uber for X” companies are struggling even as Uber thrives
Most &quot;Uber for X&quot; companies are not actually &quot;Uber for X&quot;. That&#x27;s why they&#x27;re struggling. &quot;Uber for X&quot; does not mean &quot;on-demand for X&quot;. On-demand has always been a tricky business. SpoonRocket, one of the companies mentioned in the article, is clearly &quot;food on demand&quot;, not &quot;Uber for food&quot;.<p>What are the essential differences? Uber delivers a simple product, a car ride, that even a minimally skilled contractor can complete. SpoonRocket delivers pre-made meals. Complication is added in having to design, cook, and package pre-made meals.<p>For SpoonRocket, overhead costs exist in the forms of delivery fees: for Uber, no such fees exist. The delivery itself is the product. For SpoonRocket, the real product is the (instant) meal, not the delivery. SpoonRocket had so many costs that in order to turn a profit, they ended up trying to save on meal quality -- and in turn promptly lost their userbase.<p>SpoonRocket cannot meaningfully differentiate itself from its competitors: who really wants to try another service for delivery meals when you could just order GrubHub or Seamless? The folks at SpoonRocket were effectively trying to start a restaurant, which is a hard business with tons of near-equivalent competition. On the other hand, Uber clearly and meaningfully beats taxis, both in terms of price and experience.<p>We know that on-demand businesses are hard. We know that food businesses are hard. Combining them, guess what? Not easy.<p>Let&#x27;s talk about an <i>actual</i> &quot;Uber for X&quot; companies that is doing well: take Airbnb. Airbnb allows you to take your existing property (spare room, couch, whatever) and with extremely little effort begin renting out access to that property, but only when you want. This is similar to Uber, which allows you to take your existing property (car) and make some extra money by driving every now and again.<p>The conclusion here is that Uber is an on-demand service from the customer side only. From the service-providing side, Uber is among the very first of its kind (you can tell that from the fact that Uber has completely subverted the employee&#x2F;contractor distinction -- there&#x27;s extremely little legal precedent for a business like Uber).<p>Thus, it is a severe mistake to look at other businesses that provide on-demand services from the customer side, and to conclude that such a business is &quot;Uber for X&quot;. It&#x27;s only &quot;Uber for X&quot; if it&#x27;s similar from the service-providing side, which very few businesses are.