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Uber wants your data to support its own (ghost) kitchen business

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This is one of the most interesting articles I’ve read in a past few weeks. Nick Abouzeid’s article on Medium is a excellent, well researched article that sheds light on trends in the shared economy business that are yet unknown in Europe.
Abouzeid starts with a 3-part analysis of Uber’s recently launched own credit card and the strategy behind it

Part 1 : Uber has its own credit card

You may not know it but Uber launched its own credit card in the US, something that for us in Europe may seem awkward (why would an online platform or retailer launch their own credit card ?) but which is not uncommon in the US.

Part 2 : Uber’s credit card is very competitive

In a second step Abouzeid explains how competitive the credit card proposed by Uber. It offers up to 4% of cashback (once again this is a mechanism that isn’t much known outside of the US ; in Europe only a handful credit card offers to collect “points” that can be redeemed within a loyalty scheme; see for example the market research we published on airlines’ credit cards).
As Abouzeid explains

“it beats nearly every credit card on the market for restaurant rewards spending”.

Americans being very keen on dining out, you can imagine how many transactions it’s likely to generate. This leads us to the 3rd part : the Big Data strategy.

Part 3 : Uber wants to use the data collected throught its credit card

Abouzeid argues there is a data strategy behind the rewards offered by Uber and I must admit his theory is pretty compelling. He writes :

“Uber’s insistence on beating the market rate for this spending data (by paying more than nearly every other card’s rewards) lends credibility to the argument that Uber really wants your credit card data. […] Uber wants to own the entire restaurant industry. Armed with data about your eating habits, Uber will be able to predict and satisfy your every craving.”.

This data strategy would support Uber’s move into promoting the right food, to the right person, at the right time and the right place; this in turn would support Uber’s ghost kitchens.

My take

First there is a bank card I knew nothing about ; and second there is disruptive model of ghost kitchens to change the way food is made and proposed.
Despite my first delightful experiences with Uber, I must admit that my resistance to Uber has grown. Using Uber has societal costs because people are exploited o the one hand, and profits flow to tax heavens on the other hand.
I understand the logic behind the “ghost kitchens” (see also this article by the Guardian on Deliveroo’s ghost kitchens in London) : reduce the fixed costs associated to satisfying demand and turning them into variable costs. It makes perfect economic sense. But are we understanding the societal consequences of such a bold move in the restaurant industry (which works already with thin margins) : isn’t it going to lead to worsening of work conditions ? Will restaurants in cities eventually close their doors and outsource the cooking to those containers ?


Author: Pierre-Nicolas Schwab

Pierre-Nicolas est Docteur en Marketing et dirige l'agence d'études de marché IntoTheMinds. Ses domaines de prédilection sont le BigData l'e-commerce, le commerce de proximité, l'HoReCa et la logistique. Il est également chercheur en marketing à l'Université Libre de Bruxelles et sert de coach et formateur à plusieurs organisations et institutions publiques. Il peut être contacté par email, Linkedin ou par téléphone (+32 486 42 79 42)

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