Uber-proofyour company

Creating value withdigital platforms.

Yves EychenneCarolyn Strong-Eychenne

UberisationPlatforms such asUber,Booking,Airbnb,AppleandGooglehaveupset entire economic sectors.

Theelements ofuberisation:• Thetransformationofusage• The« Wow »Effect• Disruptiveinnovation• Rethinking thetechnical andeconomic fondamentals ofasector

Atthehead ofthis battle,digitalplatforms,firmly placetheclientinthecenter.

What are the issues companies face?

Passiveconsumer>>>activeclient >>>producer

Product,Service,Experience

• RollsRoycemoved from selling aircraft motors toselling available flying hours• From serviceto“clientexperience“ (smartphone,Google,…)• Theconsumer’s role changes:he is now connected,better informed,active,changeseasily between therole ofconsumerandproducer,andexpects tobelistened to.• Theeconomy ofsharing2.0(BlablaCar,Uber,AirBnB)

Ource image:https://datafloq.com/read/rolls-royce-shifts-higher-gear-big-data/514

New values ?• Sleep inthebedroom ofastranger?• Shareacarwith someone you don’t know?• Borrow moneyfrom private individuals?• Share,exchange,make bargains.

Newbehavior foraneweconomy:22 %ofFrenchpeoplehavealready tested aserviceinthesharingeconomy and30%think they will try it within thenext 12months.13%areready toproposetheir services.Source:OpinionWay « EcoScope – BaromètreOpinionWay pourAxys Consultants– LeFigaro–BFMBusiness »surl’adoptiondel’économiedupartage

The Wow Effect

• TheWowEffect:Thesurpriseofdiscovering aserviceorproduct whichsaves timeormoneyoroffers anextraordinary simplicity ofuse.• TheWowEffect is keytoacquiring newclientsanddeveloping their loyalty totheplatform.• Therepetition ofthis positiveexperience transforms theclientinto anambassador.• TheWowEffect pushes theexponentialgrowth ofthis kind ofplatform.

Sourceimage:www.usine-digitale.fr

Disruptive Innovation• Disruptiveinnovation– or“technological rupture“ – is anewtechnologywhich is radically different from those existing andwhich endsupreplacingthetheolder technology.Adisruptiveinnovationis notlimited todigitaltechnologies;nylondisrupted silk stockings,Gutenbergdisruptedmonestary copyists.• Thedilema forestablished companies is howtoallocate resources andmanagetheir financial priorities.• Themanagementofinvestments inR&Dtendstotarget establishedmarkets andthose market segmentswhich arethemost profitable.• Although companies avoid markets which aretoo small ormarket sectorswhich they donotknow,these arethemarkets which aretargeted bydisruptiveinnovation.Ex:Amazon,Uber,Netflix• The references onthesubject:ClaytonChristensen

The Plateform: the marketplace of modern times

The Network Effect• Thereason fortheremarkable speedwhich with markets arepenetrated:• Uberhasbecome adominantactor inthemarket oftaxisinthree years;• Instagram,inonly sixmonths inthecrowded market ofphoto-sharingsites,gained 400milliion users and75%marketshare.

• TheNetworkEffect andits hyper-growthcreate valueforalltheparticipantsoftheplatform (producers andconsumers).

Mettre unschema

Source:PARKER,GeoffreyG.,VAN ALSTYNE,MarshallW.,CHOUDARY,Sangeet Paul “Theplatformrevolution” Norton&Company,2016

The client in the center• Reviews from other users helpusers make their choice andalso reassure those who give their opinionthat theplatformcaresaboutthem.Anewform ofcustomer service.• Clients’reviews allow suppliers toknowwhat theuserthinks aboutthem andhelps them improve their service

• Intheinformationera,theconsumeris connected,informed andactive.• Companies andbrandsmust• listen totheclientwhen he expresseshimself onsocialnetworks,• understand him,accompany him,andcapturenewtrends

Sourcewww.marketing-professionnel.fr

Creating value via a digital platform

Often thecompany who managestheplatform does notmanufacturetheproducts nor furnish theservicesexchanged onhis platform.Hisvalueconsists of:• thebreadth anddepth ofhis catalog,• quality control(curation),• clients’reviews andcritiques,• theexclusionofbad suppliers…andalsobadclients.

How does a platform work?

Key technologies for uberisation• Amobileapplicationrequires geolocalisation capabilities,asthemainsupporttonumberous interactions.• Thecloudallows webandmobileplatforms rapid growth,globally,atalower price.• ApplicationProgramming Interfaces(APIs)areused toconnect andbuild anetworkofpartners.• Big data andartificial intelligenceallow theplatform tomake relevantpropositionstoconsumers.• Theinternetofobjects helps tobuild newvalue-added services.

Source IBM

The importance of the business model….

Les géants numériques vs l'économie traditionnelle

Capitalisation Economie CapitalisationEconomie nouvelle Région (milliards), 2016 Secteur traditionnelle Région2 (milliards), 20162

Apple USA $583 éléctronique Sony JPN $45

Google USA $516

Facebook USA $340 publicité Publicis USA $13

Baidu CHN $281

Microsoft USA $439 logiciel Oracle USA $170

Salesforce USA $50

Amazon USA $281

Alibaba CHN $192 commerce Walmart USA $221

Priceline USA $65

eBay USA $27

Yahoo! USA $36 actualités News Corp USA $7.6

Uber USA $40 taxi Medallion Corp USA $220m

Taxi G7 France

LinkedIn USA $15 recruitement Manpower USA $6

Netflix USA $45 média Vivendi France $24

Business model and two-sided business platforms

Ameetingplacewhere some economic actors cometoconsumeaserviceorproduct andother actors cometoproposetheir services.Often,thelattergroupsubsidizes theplatform.

Exemples of two-sided business platforms:• In a newspaper or TV service, the readers / viewers come looking for news and distraction.

Advertisers pay for the opportunity to expose the readers/viewers to their brand, product orservice.

• Google’s search engine: searches are free for users, but here, too, advertising subsidzes theservice. Google had over $50 billion in revenues in 2015.

• Apple goes even further: everybody pays. The user pays to have a terminal (iPhone, iPad,Mac, iPod) and pays to see content (Apps, music, books). Suppliers of content pay an averagecommission of 30% to Apple (in its role as marketplace).

Uberisation of the future• Above andbeyond digitalapplicationsandmobileapps,platformswill be built around 3Dprinters(additivemanufacturing)• With 3Dprinters,themanufacturercan listen tohis clientèletoimprove anddevelop his product moreoften (thecustomer inthecenter).• Products can be built byconsumers:• FabLabs arebeing created inFranceandthroughout theworld.• Serviceprovidersandusers,who inturn become suppliers ofthisservicetotheir neighbors• Newplateforms will also be built around robotsanddrones

Transportation and hotellery• Hotellery is themost activesector among digitalplatforms:Expedia,Trivago, Booking,andTripAdvisor.• TheSNCF(Frenchnationalrailway company)started its e-commercevery early on.Ithasdeveloped webandmobileapps toimprovecustomer experience andaninternetofobjects tohelpmake thetrainsrun ontime.• Transdev is onthefrontlines against Uberforits taxiactivities intheU.S.Ithascreated DigitalFactory tospearhead innovation.• ThegroupAccorHotels hasreacted toBooking andExpediabycreating its own reservation platform,opentooutside partners.AccorHotels hasalso puts its focusonsuperb customer experience.

Transdev• Transdev is intheprocess ofinventing alayerofintegration for“Mobility asaService“,thus moving from therole ofpublictransporttomobility.• Moblity asaservice:anagregator ofallmodesoftransportation

• Physicalplateform:thetrainlines,thebusnetwork,shuttle buses,taxisandVTC• Plateform ofdata,tohelptheuserchoose thebestcombination oftransportationmodes.

• Amonthlymobilityplan,justlikecellphone/data.• Thedataplatform will be accessibletoalltransportcompanies,localauthorities,aswell asdevelopers andprogrammers who wish tocreate applicationsformobilitysolutions.

• Transdev started this project inFinland:maas.global

Aplatformcanhideanother…andanother...Andanother

E-commerce• E-commercewas oneofthefirstactivities tobedeveloped when internetwas opened tocommercialactivities in1992.Despite this longhistory,it represents only 6%ofcommerceinFranceandhasnothad thedestructiveeffectoncefeared.

• Thelargemajority ofactors ine-commerceinFranceare Frenchcompanies who havesucceeded intransforming themselves,growingtheir salesviaawebsite,bettering theirprofitibility,andincreasing customer loyalty.

• Carrefourhasadigitalprogram toincrease its salesinstoresviamobileapplications.Carrefourhaspurchased RueduCommercetostrengthen its e-commerce.

• Clickandcollect vs.homedelivery. Having ahomedelivery includescertainconstraints,which makes “clickandcollect“ attractive.Theclientpurchases his products on-linethen goes tothestoretopickthem up,ata timewhich is convenient forhim.Thisallows thestoretotake advantage oftheclientbeing onsitetoincrease theamountofhis purchases.

Carrefour

Retency: transforming in-store visits to purchases

• Retency usesnewtechnologiessuch asbeacons andbig datatoanalysecustomers’behaviors within thedepartments oftheretail storetransforming asimplevisit into apurchase.• Towin thebattle ontheshoplevel,Retency analysesinrealtimethepercentage ofsalesperdepartment.Theresult can be advice onrestocking orreorganising thedepartment’s displays,special salespromotionsortargeted marketingtoclientswhowent tothat department without purchasingproduct.• Theshopshelves become aplateform.

The service sector• Uberisation ofenergy?Private individuals invest inmini-generators andhighcapacity batteries,foronly ten ortwenty thousand euros.Sciencefiction?Elon Musk’s companies arealready proposing fullsolutions.• On-linebanking,with 4 %market-share inFrance,is apractical servicebutnotrevolutionary.Uberisation is coming from newplatforms forpayments,cooperative loans,andthere-invention oftheaccountingledger (blockchain).• Insurance companies arereinventing themselves with policies linked toabehavior:aconnected carcan deliver dataondriving stylewhich thenallows theinsurer toproposeindividualised pricing.

E.on• E.on is working asanagregator,mastering thetechnologiesofsmartgrids,smartmeters,andon-siteenergy production.• Theelectrical networkbecomes aplatform with atwo-sided marketwhich linksproducers ofenergy with consumers.• Aconsumercan decide toinstall solar panelsontheroofofhis houseorawind turbineinhis garden andbecome aproducer.• E.on hastomanagetheimpactofthese newproducers onthetotalityofthenetwork.• When we knowthat high-tensionelectricity lines lose 40%oftheenergythey carry,we better understand theneed fora revolution ofenergyplatforms.

Sourcehttp://www.eon.com/en/business-areas/energy-networks.html

The role of Fintechs

• Payments with PayPal.Googleisentering thefray with GoogleWallet.Applealready hascreditcard informationfor800 millionclients.

• Other FinTechs areentering theloan industry such asLending CluborAmazonwho offers loans withlow interest ratestosmallcompanies.

Blockchain:

Public Service• Postofficesworldwide were among thefirsttoconfront aprofoundtransformationoftheir sector:thedevelopment ofemails,digitaladvertising,dematerialised invoicing,amovefrom printed todigitalpress.• Educationis seeing arapid digitalisationwith thepopularity ofMOOCs (MassiveOpenOn-lineCourses).• Forthemedical sector,several platforms such asDoctolib.fr offer alist ofdoctors with additional informationandallow theclienttomake anappointment on-line.Doctissimo.fr allows forauto-diagnosis,while Deuxiemeavis.fr inFranceandtheClevelandClinicauxEtats-Unisoffer servicesforlong-distancediagnoses.

Education• MOOCs havereceived alotofattentionsince HarvardandMITannouncedtheir attentiontoreach 1billionstudents.MOOCs will represent 10%ofallclassesgiven worldwide by2020.70 %ofstudents enrolled inaMOOCdonotreside inthesame countryastheplatform.• Theinversed classroom:

• Ecole42 rejects thetraditional notionoflecturesandbasesits classesonpeer-to-peer learning.Instead ofaprofessor giving alecture,studentscomplete projects which vary insizeanddifficulty,leading the“learner“ totake initiativeandbe ingenious andcreativeinorder toachieve his goals.

Sourcehttp://www.lepetitjournaldesprofs.com/blog/2013/04/16/classe-inversee/

Healthcare

• Theplatform Honestica targets doctors allowing them tosharepatientmedical informationamong healthcare professionals andtoparticipate inpublichealth research projects (viadataanalysis).• Platforms ofconnected objects viawatches andbraceletswithsophisticated captors which can follow physical activity butalsoconditionssuch asdiabetes.• 3Dprinters arealso going totransform thehealthcare sector,fromdentalimplantstoprosthetics (hands,legs),medication andevenbodypartscreated from human tissue.

Manufacturing industries

• The uberisation ofmanufacturing industriescomes toplay intwoaspects:distributionchannels andthetransformationofproductsinto services.Asplatforms gainmoretractionindistributing productsinamarket,themanufacturermustbe careful toretain directcontactwith his clientbase.• Industry 4.0 is atransformationofthefactory inwhich thevaluechain is completely digitised,from supply,production,delivery…allthewaytotheclients.

Michelin• “MichelinMan-as-a-Service“:Instead ofbuying histires,atransportercan now lease them.Michelinremains theowner ofthetiresandhandlesinstallation,inspection,andmaintenance,andintervenes intheevent ofdamageorbreakage.• Michelinpurchased Tyredating, BlackCircles.comandAllopneus.Themanufacturernow hasdirectaccess toclientdata.Itcan study users’searches onthewebsitesandbuying trendsinorder toimprovecustomer experience andanticipate marketevolution.

Sourcehttp://blogpneu.com/puce-rfid/

Trumpf,industry 4.0• Trumpf hasalready integrated smarttechnology into its machinetools,thusallowing datacapturewhich can beagregated from adistancetodevelop newservices(maintenance,inventorymanagement)ortooptimize factoryplanningandproduction.• Thisplatform is based onaninternetofthings,the“things“ being machinetoolsfrom Trumps andother companies,bothpartners andcompetitors. Source:Trumpf

Societal impact

• Francehasbecome ahostcountrytotheneweconomy.Assuch,shemustnavigate theissuesbefore other European nations,since theimpactofthis changewill be felt morequickly andstronger here.

• What is theimpactonwork andthestatus ofworkers?

• What is theimpactongovernmental finances andsocialprograms?

• What aretherisks related tothemonopoly that certainplatformssucceed increating incertainmarkets?

France is a host country to uberisationSociovision – “Frenchsocietyis amirror toUber“. Uberisation develops following fivebasictrendsinsociety:• Gaintimeandsimply one’s life :54%ofFrenchpeoplewant tosave timeand70%lookforthemeans tosimply their lives.• Wheelinganddealing :Crossing thelineis notaproblem fortheFrench,wheregovernment is seen asasastickler fordetails,wanting toregulate everything.Publictolerance forundeclared work hasincreased from 42%in1997to61%in2015.• “Respect“ is aword dear toFrenchpeople’s heart (62%),infrontof“freedom“ at46%and“trust“ at43%.TheFrenchwant tobuy products atafair price.• Shortsupply chain:46 %oftheFrenchalready useshortdistributionchannels (amorepositiveterm than desintermediation!)and56%areready tousethem inthenearfuture.• Aworldof entrepreneurs:71 %oftheFrencharefavorabletoasocietyinwhich peoplecreate their own companies ortheir own employment.50%areready totake theplungethemselves.

http://www.sociovision.com/sites/default/files/note_sociovision_uberisation_juillet_2015.pd

The status of the worker in the new economy as seen by…Thibaud Simphal,GeneralManagerofUberFrance:Inthemondialisationofthe21stcentury,which is fluid andagile,what matters is toprotect therights oftheindividual person,nottoattach those rights toacontract.DavidMénascé,author ofthereport“LaFranceduBonCoin“:Thequestionis moreaboutwhat form aninterventionbypublicpowers should take toregulate theneweconomy.Thisinterventionmustbe subtle,since breaking thedynamic ofcollaborativeplatforms,under theillusionofeliminating abusivesituations,risks marginalising even morethefragilepopulationswho havenoother way out(ofpoverty),andpushing them totheinformal economy.GaspardKoenig,founder ofthethink thank GénérationLibre:

We want toprepare fortheemergence ofapost-salarialdigitaleconomy.Thisimplies areform ofthelaborlaws,with thecreation ofastatus ofworker which includes acertainnumber ofrights,forexample therighttopaid vacation,forthis newform ofworkers who areneither salaried nor entrepreneurs,like thedriversofcars(forUber).Another majorreform concerns theinsurance systeminits globality ;we should create auniquesocialaccount which would allow each person tomanagehis timeandfusionthedifferent systems ofunemployment insurance,continued education andretirementbenefits.

http://www.usine-digitale.fr/editorial/exclusif-rencontre-avec-le-patron-d-uber-france-qui-prone-un-debat-national-sur-l-economie-a-la-demande.N398012Ménascé,David,Synthèsedurapport,« LaFranceduBonCoin »,Institutdel’entreprise.Lemarchand,Jean-Louis,« Pourl’abolitiondesprivilèges »,GenerationLibre.

Government’s role as a regulator• ThereportbyPascalTerrassegives many interesting ideas• Bridgethegapbetweenthestatusofself-employedor“autoentrepreneurs”withthatofsalariedworker:disabilitybenefitsandcomplementarypension,accesstorentingandbankloans.Itisbettertoprotecttheperson,byensuringthatthistypeofemploymentalsogivesaccesstocontinuededucationandallowsthevalidationofdiplomasandcertificationbygainingexperience

• Terrasse proposesthatplatformsautomaticallytransmitinformationconcerningrevenueearnedtoacentralizedplatformwhichwilltransmitthisinformationonceayeartothegovernment(ie,taxoffices)

• Managetheriskofanaturalmonopoly.Thenetworkeffect leadstohyper-growthinaplatform,creatingalargeriskforanaturalmonopoly.Whenoneplatformbecomestoopowerful,itcanimposeconditionswhichharmtheproducersortheconsumersontheplatform.

• Managetheriskofexclusion.Aplatform/monopolycanfixhighcostsandover-exploititsdominantposition.Itcanbenefitfrommarginswhicharehigherandhighercomparedtootheractorsintheindustryoreventhreatentoexcludecertainproducers.

How can a company manage the uberisation of its market sector?• Capturethe« weak signals »,theneeds anddesires

oftheclient,which areindicators ofopportunity.

• Thecompany mustmasterthenetworkeffect, those positivetrendswhich attract clientandsuppliers,andminimize thenegative forcesrelated toanimbalance between these groups.

• Thecompany mustlearn touseexternal ressources.

• Accept therisk anderror related tonewprojects andbe prepared toabandonsome ofthem.

• Stay receptive tohappyaccidents.