Uber Looking Beyond Limo, Taxi Markets

Martin Romjue
Posted on September 22, 2015

Two magazine articles about Uber's long-term plans should give the limousine industry pause about whether the transportation network company will decimate it, as many operators fear. The TNC appears to have ambitions beyond ground transportation, and could be shifting its focus altogether. 

In the October issue of Fast Company magazine, a cover profile of Uber CEO Travis Kalanick states how the Uber founder is pursuing "a series of audacious initiatives, including investments in Uber's core offering that could eventually move it even further away from its roots in limousines and luxury."

My takeaway from this article is that Uber's $51 billion valuation now is so high relative to its lack of profits that it must spend time and energy going into more lucrative markets and services. Luxury limousine rides may not sustain it long-term, meaning it could leave that segment. . . to actual limousine companies connected via national and regional mobile apps. 

A Sept. 21 Vanity Fair article underscores that point: "Uber isn’t actually a high-tech taxi company; it just happens to be one right now. During an expansive interview with Bloomberg’s Emily Chang, noted V.C. and Uber investor Chris Sacca — a.k.a “The Unabomber” — explained that he expects the company to eventually plow into all manner of other sectors. Uber is already experimenting in food delivery, but some speculate that it may one day pose as a credible threat to parcel services such as FedEx and UPS."

There's more revenue-by-volume to be made on food and packaging/parcel deliveries, as opposed to non-taxi-style luxury limousine rides (Uber Black). While we can't predict how volatile technology sector start-ups and companies play themselves out, wouldn't it be interesting if "luxury limousine" will end up as a discarded phase for Uber?

Related Topics: client markets, Editor's Edge Blog, industry trends, LCT editor, Martin Romjue, Newspoints, TNCs, Travis Kalanick, Uber

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