Despite currently being shunned by the City Of Miami political establishment and Taxi drivers citywide, Uber just received some crazy good news. Previously, the company was valued at $4 billion (which is high enough). Now, the company is worth up to $17 billion dollars with a new wave of investments received. That’s a $13 billion increase since its last round of funding.
Uber is less about taxi service and more about efficient use of logistics. Imagine that a company seeks to ship goods on an on-demand basis to the marketplace. In a connected world (where social media is utilized as an efficient method of connecting businesses), nimble shipping services could compete for that business on a more timely basis. Scheduling deliveries would be less rigid and more flexible. Costs would be reduced and goods could be transported more efficiently.
This is the world we are headed toward. FedEx and UPS are all focused on providing logistics to companies enabling them to be more efficient. Uber is seeking to be an entrant into this space and use its technology know-how to differentiate itself from the competition. There’s no guarantee they will succeed, but it’s a reasonable speculation that they will be on the cutting edge of an emerging trend and a worthy entrant into this space.
And, while the current taxi-replacement strategy isn’t a business model that can justify a $17 billion valuation, there’s plenty of money to be made in consolidating services in a fragmented industry. Taxicabs and limousines are about as fractured an industry as you can get. If technology can eliminate layers of excess costs (inefficient taxi and limousine services), Uber can make money in this space. It’s the low-hanging fruit and provides the financial foundation for more lucrative business-to-business services.
Niiice right? Original investors must be quite happy right about now.