Comment from Peter Saxon
When UBER entered the “taxi” market a few years back, it presented consumers with a viable alternative to what had been a closed shop for almost a century.
The cheeky but well-funded upstart forced the ancient taxi industry to lift its game to stay competitive. But UBER’s foray into the food delivery business, UBER EATS has not enjoyed quite the acclaim of its ride sharing predecessor.
Like so many innovations in this technology driven world, UBER EATS is a solution to a problem that didn’t really exist – at least not here in Australia where most of the population lives in a temperate zone. Sure, in the middle of a blizzard in Buttzville, New Jersey (yes, it exists) who wants to leave their cosy apartment to pick up pizza when someone else with a greater need of income will brave the elements for you?
While UBER can take some credit for rejuvenating the taxi business, it and others in the game, have severely disrupted the restaurant business, particularly at the mom and pop end, where owners struggle to make a living. At the heart of the problem is that food delivery services such as UBER take a cut of around 30 percent of the menu price of each meal it delivers and pays the delivery person out of that. It seems reasonable except that most ‘cheap and cheerfuls’ can’t make a profit from a $9 curry take-away in which the most expensive ingredient is delivery.
At first it seemed like a good idea. The restaurants that got in early enjoyed a surge of business at the expense of those who didn’t participate. Pretty soon, most of the others came on board.
The restaurant owners I’ve talked to, tell me it’s a classic case of damned if you do and damned if you don’t. The food delivery business may have experienced astronomical growth but the actual food business hasn’t. Most restaurateurs report that all that the delivery services have done is to cannibalise their established dine in clientele who now order take away instead. And for that, the delivery service clips the ticket along the way to the tune of 30 per cent.
Another one of these ticket clipping industries that have sprung up in recent years is hotel booking service sites which purport to find the best accommodation deals on the planet for you, the consumer. How handy! Now Shantelle from Tittybong, just north of Teddywaddy, Victoria (I’m not making this up) can book the cheapest room in the pub at Humpybong, Qld. all from the comfort of her media nook.
It’s a case of technology and big business solving a problem that the consumer never knew they had. Right? Well, not exactly. As it turns out, one of the industry’s largest players, Trivago, did solve a problem but not the one they advertised. The problem they solved was their own. How do we embed ourselves in the multi-billion dollar travel industry so we can clip the ticket along the way?
Last month Trivago was found guilty in Federal Court of misleading you, (and me) the consumer by not necessarilrevealing the hotel with lowest price but rather the one that paid Trivago the most money to be listed at the top. Very naughty!
News aggregators have been clipping the ticket for some time on content someone else created. That’s not to say that the carefully curated news that appears in my inbox each day from Apple doesn’t add value for me. It does and it should, because Apple knows more about me and my interests than anyone I don’t know. It’s that in-depth knowledge about me that they sell to advertisers. That’s the ticket they clip.
Now, Spotify’s rolled out a new Drive show. Called, Your Daily Drive, it features a personalised audio feed that blends music and news in one place. Is it just another ticket clipper that uses other people’s content curated into a show? Well, no. Spotify’s done deals with creators such as Mamamia and news.com.au to licence the content it uses. But is it a solution to a problem listeners have with radio? Perhaps. But I’m guessing that if it is a problem, then it’s one that listeners don’t yet know they have.
The idea is nothing new. When Omny launched in 2013, it was all about curation not podcasts. SCA even made a big investment in the start-up which promised listeners that they could build their own personalised station by selecting favourite bits from, say, triple j and Triple M, ABC News and the latest parody from Fitzy and Wippa.
Ultimately, the idea failed, perhaps because the system was too clunky and lacked the pace and continuity of a real, live radio show. A minefield of copyrights didn’t help the situation either.
I have long argued that radio has always shared listening with owned music, And streaming services like Spotify and Apple Music are merely the latest way of playing “owned” or rented music. But sooner or later, the streamers like Spotify, will find a way to jump the divide and compete with radio head to head.
As it is written in the Gospel according to Murphy 26:4, “Beware the ticket clippers for they will punch a hole in your revenue, if you let ‘em.”