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Disruption is today’s buzzword which is heard every day and at every place. Disruptive businesses, disruptive technologies, even disruptive thinking is talked about these days. Let us look at this term and what does it imply.
As the name indicates, Disruption occurs when a usual smooth process is interrupted. It is not just about interruption; it is about changing the course from an age old, tested process to a totally new and different course. Disruption is not about destruction either; it is an improvement over what was being done before.
Let us look at some examples to understand the phenomenon.
Uber/ Grab/ Careem
Uber started officially in March 2009 in San Francisco USA. The company, Uber Technologies Inc. was founded as UberCabs. The Original, beta version of UberCab deployed only black luxury cars and the ride price was higher than cab ride. The Ride-Hailing App caught on quickly and became public in 2019. The entire story is quite interesting, but we shall do without it.
In a short span of ten years, Uber has become available in more than 80 countries. It has a global market value of 72 billion US$. There are 75 million active users worldwide and 93 million active users in the US alone. Uber generated 26.61 billion US$ in gross bookings in 2020. 1.44 billion rides are completed through Uber every quarter. Uber has 68% share of the US rideshare market.
Grab is Southeast Asia’s popular ridesharing app from a company headquartered in Singapore. It is much more popular than Uber in Singapore, Malaysia, Thailand, Vietnam, Myanmar, Cambodia etc. The company reports a revenue of US$ 1 billion and a valuation of US$ 11 billion. It is estimated to have 36 million users and 2.6 million drivers, who provide 4 million rides a day.
Careem is a ride hailing service company based in Dubai. It was founded in 2012 and has operations in over 100 cities in 14 countries including Middle East, North Africa, Turkey, and Pakistan. The company was valued at over US$ 2 billion in 2018. Careem was acquired by Uber in March 2019 for US$3.1 billion.
Before Uber, Grab and Careem, the taxi cabs were in operation since more than a hundred years. Taxi cabs were owned by various taxicab companies, and by individuals in some cases. Uber disrupted the model totally. It does not own a single cab, people drive their own cars, not cabs, and it has become a source of part-time/ full-time work for millions of people who were not professional drivers. People have found an income generating opportunity from their cars which would be standing idle otherwise.
Airbnb is the alternative to regular hotels, motels, guesthouses. It enlists people who have one or more spare rooms in their house, or who wish to enlist a whole property with Airbnb. Airbnb does not own a single room anywhere in the world.
Airbnb was born in 2007 when two hosts welcomed three guests to their San Francisco home. The two hosts were Brian Chesky and Joe Gebbia who founded Airbnb alongwith Nate Blecharczyk.
Today, Airbnb reports 4 million hosts in over 100,000 cities of the world, and it welcomed over 900 million guest arrivals.
Airbnb generated 3.4 billion US$ in 2020, which was 30% less than 2019 due to COVID restrictions on travel. Its revenue comes from the percentage it charges from the hosts per guest arrival. Airbnb had 150 million users and in 2019, and 272 million bookings were handled.
Before Airbnb, the guests always stayed at proper hotels, motels, guesthouses, or other such designated places. Airbnb disrupted and offered that people could stay with regular families and feel more comfortable.
There are many more such examples of disruption. Airlift, Food Panda, Grocers, Cheetay, Daraz and the list goes on.
These disruptions have changed the way we looked at these businesses or segments. It has opened new allied businesses also which could never exist before.
Technology is at the heart of all these disruptions. It clearly shows the power of technology when it is applied through innovative thinking.
Pakistan, fortunately, is also emerging in this area, thanks to the young people who are disrupting. We have still a long way to go in this direction.
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