UberEATS – A tax on Hipsters

Posted on : 28-09-2017 | By : richard.gale | In : App, Consumer behaviour, General News, Hipster, Innovation, Uber, UberEATS

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It was Friday night, we’d all had a long week and so family decision to order a fish and chip supper seemed the right thing to do. I called in the order with the local chippie and popped down the road to pick it up.

 

All was well, the place was warm, buzzing with people and the sight and smells of frying fish. Then I noticed one of the guys packaging up food, printing off labels and placing it to the side of the counter. Then it got really strange, men with enormous beards, checked shirts wandered into the shop looking intently at their phones, walked to the counter, picked up a package, placed it in their shoulder bags and walked straight out again without a word to anyone. The shop guys didn’t even look up.  Had we been invaded by a gang of hungry, kleptomaniac lumberjacks I wondered…

 

I had to ask the guys. No. They said. The fish bar has signed up with UberEATS and they now have a whole new set of customers. They used the UberEATS app to order and then used their phone to find and pick up. Now I thought UberEATS was all about delivery but the guys said a lot of people picked up too on the way back from the station.

 

All seemed pretty logical and I was thinking about yet another use of tech to make our lives easier until one of the guys told me they have a different price list for Uber. It’s about 30% more expensive to cover Uber’s take and, because there is no mechanism to NOT do this, they have to charge for small items like ketchup etc (otherwise no one could order them…).

 

This really got me thinking, I get the convenience angle but is it REALLY worth an extra third on your meal just so you don’t have to pick up the phone? Are there other areas where this is the case and what’s the reasoning behind it?

 

I believe it’s the disconnect between the purchasing and the paying which enables this model to succeed. Once this is broken then the cost of buying becomes less important. It first really began with credit and credit cards where you could buy things you couldn’t afford but now I think the distance has become even greater.

 

I don’t like to use Uber myself but each month money comes out of my card for Uber journeys by various other members of the family. They effectively have a free, on demand, always available transport system whilst I have various amounts of random expenses. I get the convenience factor – out in town on a rainy evening and it’s great to know a clean car with a friendly driver is close by – but for most other journeys then a quick call to our local minicab firm ensures the same service, often at a better price and we’re supporting a local business too.

 

Once I started to think about time value vs. cost aspects of this then the new model started to break down. But pretty quickly, the scale, the tech and service plus the obscuring of costs outweigh any pricing concerns.  As these disruptive concepts grow into the mainstream, Uber and other disrupters still need to learn how to operate within the existing rules. Maybe….