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Uber in business of competing with car ownership

Released at: 13:54, 03/08/2017

Uber in business of competing with car ownership

Photo: Uber

Mr. Thuan Pham, Uber's Chief Technology Officer, talks about how technology changes our lives.

by Minh Tuyet

■ Uber is so popular in Vietnam that people believe it is a taxi company. Do you think it can change the consumer behavior of Vietnamese when using taxis?

Something very different and special in Vietnam is that less than 10 per cent of the cars in the Uber system are new cars. The remainder are older, and were largely sitting idle but are now being put to use. Over time, when you get to the point where people are just so used to taking transport as they need it, they will cease buying cars. And I think that will be great.

I think what we actually see happening around the world is that the product experience we deliver is very convenient and allows drivers to earn a living.

It actually generates more demand, so I think we create a market for ourselves. I can give you some examples. Years ago, when we started Uber in our hometown of San Francisco, many analysts said “Oh, Uber has a very limited upside because it is a taxi company. So, the best thing it could do is basically replace all the taxis.”

The same thing is said about the New York market. A few years later, you can still see plenty of taxis in San Francisco and they’re almost always busy. Of course, their business has gone down a little, but not because of us but because of the inferior services they offer, how they handle liabilities and complaints and everything else, and end up not being a competitor.

Because we offer a product that consumers really like, more people end up using our service. Now, when we think about this in the larger scheme of things, we are actually not in the business of competing with hire car transport businesses, we are actually in the business of competing with car ownership, right?

So, the people who may buy a new car right now will provide the service, OK? Because of the surge in demand in the short term, it feels like we’re congesting the road but, in reality, the new demand that comes to the market is taking those who have to buy cars and have to park them somewhere off the streets. So ultimately, that’s how this will play out.

What do you think about the competition for Uber in Vietnam?

Ultimately, competition is a very healthy thing. If you have multiple services to solve the same type of problems, then that sense of competition will lead to more innovation. And more innovation will lead to better experience, better services, and even lower prices, which benefit everyone.

So, my view of competition is ultimately that those who can provide the best services and create the most value for people will succeed. Now, in many markets, it is not a winner takes all situation, but how we add value. The differentiation between competitors is how well they can do that.

■ As a leader in the fourth industrial revolution (Industry 4.0), what is your advice for Vietnamese technology companies?

My view on any technology company is that they exist to solve problems. They exist to use technology to solve problems to improve whatever it is. And it all depends on what product you offer, what services you offer. I don’t think companies should exist just because they exist. There has to be a reason.

And I think this is part of Industry 4.0. I think the concept behind it is fostering innovation. With that spirit, all technology companies should think really hard about how to continue adding value, how to take the product you currently offer and make it better, consider what products you should be offering, and how to expand your services.

I think it’s just about making progress on the company’s mission, which must always be providing value and services. Otherwise, the company should not exist. If you build something that nobody uses, you don’t exist at all.

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