Much chatter lately has been devoted to, “Whither Uber?” Is its famous unicorn valuation justified and defensible? If it can’t, or shouldn’t, continue to give its middle finger to regulatory authorities on every major continent, will its growth slow or even reverse? How bad is it—that is, should we all uninstall the app—because it seems to have a record of short-changing its drivers, furtively tracking its users, and hiring star talent that just may have brought 14,000 purloined files with him? Is its (now we are learning) caustic and misogynist internal culture a fundamental business challenge or “merely” a PR nightmare?
Most of this strikes me as gossip-meets-the-business-pages, with perhaps a bit of schadenfreude fuel behind it as well.
But as I’ve reflected on the larger question of “whither the auto industry?,” I’d like to believe that we might learn something about the future place of law firms in the “whither the legal services industry?” debate by thinking about Uber’s strategic and competitive posture vis-a-vis the other major players in that arena.
Let’s step back and agree for purposes of what follows that the existential issue for the auto industry, and all the planets circling it, is whether people will want to continue to own their own cars. Or is all people really want “personal transport on demand, 24/7?” According to the AAA, American drivers spend on average about 45 minutes/day behind the wheel; meaning if they own their own car, it sits idle about 97% of the time: Pretty low utilization for what’s typically your second most expensive purchase (after your home).
We’ll bypass what are for purposes of today’s piece second-order issues such as whether pure plug-in, hybrid-electric, or yet another generation of the durable internal combustion engine, will be the centerpiece of future powertrains. That’s less important to you and me (while admittedly of surpassing importance to car engineers and CFO’s) than whether we will prefer to buy-and-own or rent/subscribe to-and-summon our “mobility services.”
Stipulating that a large proportion of us will opt for “services” over our own little bubble of steel and glass, which category of companies that’s out there today is best suited to sell those services or to most quickly grow into it? Uber? The traditional car companies? Google? Tesla? A combination of two or more of the above?
To figure this out, I’d like to introduce the notion of “the harder competence.” This is my own coinage standing for the notion that if providing a product or service requires competence in a couple of things, the company(ies) furthest along in developing and optimizing the harder, or hardest, of those competencies are best positioned to win the day.
You could think of it, and I would invite you to do so, as a special case of the familiar notion of a barrier to entry.
Now let’s imagine how it might apply to the “mobility services” industry of 2025 and which category of incumbents today is best set to be at the core in the future. At the very least, mobility services that one could rent or subscribe to will require distributed fleets of cars, preferably autonomous, and an app to summon them, enter information needed to select the proper vehicle (no micro-urban Smart car if you’re moving furniture or taking five friends along for the ride), meter usage and collect payment, record feedback, keep you up to date on progress during your trip, etc.
Which is the harder competence?