Saturday, 11 June 2016

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And that’s not the only way that Facebook has created a near monopoly in social networking. In the past decade, it has ramped up spending on new data centers, hired a lot more engineers, and turned its news feed into a powerful algorithm. The more we use it, the more data we give the company, and the more it is able to control where we turn our attention. The company has more than a billion users around the world, and it has figured out how to become a dominant source of our mobile addiction. Facebook, thanks to this loop of algorithms, infrastructure, money, and data, is a winner-takes-all company. Twitter is a distant second in the social web, about a fourth of the size of its rival down Highway 101.
And now Uber is building this tight loop of algorithms, infrastructure, and data, too. In June, 2014, in a column for Fast Company magazine, I pointed out that Google and Uber aren’t very different. Broadband was Google’s sun god; the smartphone is Uber’s. If serving up instant search results was Google’s goal, then Uber’s is to reduce the time to curb, or how long it takes for you to open an app, order a car, and have it arrive. The faster the car gets there, the less likely you are to think about Lyft or Flywheel or anyone else. So far, it’s become pretty fast, which is why you probably never thought about Sidecar.
Uber has also learned from Facebook: raise a lot of money and use it as a competitive advantage. Because Uber has raised about twelve billion dollars from investors, it has been able to flood markets around the world with Ubers. The more Ubers on the road, the more people are likely to use them. The faster they arrive to pick us up, the more we will forget about other modes of transportation. And the more we use them, the more data we give to Uber, which can then tweak their algorithms to optimize fleet usage and traffic routes. You start to see why food delivery and courier services are now part of Uber’s recent experiments. What was, at one time, an idea for an app to hail limousines for party-goers is now a company that is reimagining all kinds of transportation.
Meanwhile, Amazon has run away with online retail, leaving everyone else to fight over scraps. Microsoft, even today, controls the office-productivity business. Eight years into the smartphone boom, Google’s Android and Apple’s iOS are the two dominant players, and even in chips it is still Intel and some others. There are two companies that dominate the public cloud—Amazon, followed by Microsoft’s Azure. Google’s G.C.E. is a distant third. There are some competitive markets, such as mobile payments, where Square, PayPal, Apple Pay, Android Pay, Samsung Pay, and Walmart Pay are some of the bigger players. But, if I were a betting person, I’d wager that this, too, will become a battle between two or three companies.
Perhaps that is why it isn’t a surprise that Sidecar is part of the growing shakeout in the ride-sharing industry. We have seen companies such as RidePal and Leap Transit go under already. And we will see more failures on this road to transportation reinvention—after all, this is part of the technology cycle. Google, Facebook, and, perhaps, Uber are indicators of something bigger: in our connected age, data, infrastructure, and algorithms give companies a distinct advantage. With all due respect to Branson, it is a winner-takes-all world.
Correction: A previous version of this post misstated the name of the app Flywheel.
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