Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You: How Networked Markets Are Transforming the Economy―and How to Make Them Work for You

by Geoffrey G. Parker

In classic platform style, Uber performs a matching service. It helps riders find drivers, and vice versa. As drivers sign on and coverage density rises within a city, a number of striking growth dynamics are set in motion. Riders tell their friends about the service; some even start driving themselves in their spare time. Wait time falls for riders, and downtime falls for drivers. Less downtime means that a driver can make the same amount of money even if fares are lower, because he has more riders during the same number of working hours. Thus, less downtime means that Uber can cut fares and stimulate even more demand, which creates a virtuous cycle that increases coverage density still further.