Super-Apps Go West!
By: Bruce Burke - Applefanboi
Tags: PayPal, Fintech, Super Apps, Uber, Ridesharing

Super-apps are all inclusive apps that integrates a volume of services together. One such example is Alipay, a mobile and online payment platform, established in China around 2004.

Alipay users can accomplish many tasks within the app without ever leaving the app. In China WeChat provides an all encompassing mobile experience. It’s more than just another app on your smartphone.

Tencent, WeChat’s parent company, has unbundled the traditional desktop operating system. It’s a customer-centric app for media sharing, social media, movie tickets, ride-hailing, payments, video calls, e-commerce and much more. It has an account akin to Slack for corporations and Chinese government agencies use WeChat.

It is the very definition of super-app.

With more than one billion monthly active users, WeChat is the sort of phenomenon that hasn’t been replicated by anyone, anywhere else in the world … or has it?

Source: clem-onojeghuo-127166-unsplash.jpg

I read — — a lot … I consider myself current in tech news, especially related to payments. Sometimes all this information runs together for me forming a larger narrative. In these bigger landscapes I look for threads running across multiple channels to spot trends and glean the inside story.

My recent discovery of this common thread running through many different stories indicate that super-apps are coming to West, and will be a game-changer for both consumers and industry.

Think about your smartphone’s capabilities today, that’s a miniature, super-powerful, full fledged computer in your pocket. It contains processors and memory that rival laptops and can run full-sized incredibly complex applications. It has power that far exceeds it predecessors and when connected to 4G & 5G networks it can perform miraculous tasks.

The latest flagships from Apple and Samsung can run very large-scale applications — especially if you’re using just one application that does everything!

Source: goran-ivos-274485-unsplash.jpg

At this point you’re saying … OK enough buildup — So what’s the story who’s building this super-app? Where did you come up with this cockamamie conspiracy.

And the answer is simple — Uber!

Now for the record let me state that I have several friends who work at Uber, some in the payments division — I don’t have any insider scoop through them. The information I’m providing here is strictly speculation after noticing some common themes being repeated. No Uber associates have provided me with any information whatsoever to create this blog.

So here’s the evidence I’ve uncovered so far — I’ve posted many of the articles in my social feed with the hashtag #superapp — but here I’ll attempt to bring them all together in hopes of validating my claim. But first some observations about Uber, and how it versus many of the other companies — ride-share and otherwise — is poised to deliver and has the influence to drive the uptake of a super-app in the West.

First, the name … other rideshare companies have selected brand names associated with providing rides, Lyft is one example of this — it indicates a getting a lift — whereas Uber is more of a ubiquitous lifestyle brand — it is Uber … meaning superior or better in most people’s mind.

Source: Merriam — Webster Online Dictionary

Uber has established itself in the American lexicon as the default name for rideshare services. Even if they are requesting a Lyft many consumers still say they are calling an Uber. As Kleenex did with tissue, Uber has become the brand associated with rideshare.

And then there is Uber Eats, a service that is currently being folded into the Uber app — which is the first clue that supports my theory. Originally launched as UberFresh in 2014, the service started life as an integrated capability, then spun out a separate app, with the UberEats brand in 2015 — however it’s now being re-integrated back into the main app.

On June 5th, 2019, The Verge ran a story saying the company is currently rolling out a way for customers to place Eats food delivery orders inside the main Uber app.

Source: robert-anasch-1660639-unsplash.jpg

According to the article “If a customer does not already have the standalone Uber Eats app, and lives in one of the hundreds of cities where Eats operates alongside ride-hailing — but, crucially, one where there are no scooters or bikes available, meaning New York, Los Angeles, or San Francisco are not included here — the Eats logo will now show up in the top right corner of the main Uber app.

Tapping the logo will bring up a fully functioning web browser version of Uber Eats, where customers can place an order just like they would in the main Eats app. Uber says this integration is now live in those markets on 100 percent of iOS devices, while the Android rollout is up to about 17 percent. Now we have transportation and food integrated into Uber.

In a TechCrunch article entitled ‘Uber eats Uber Eats … CEO Dara Khosrowshahi was reported as saying cryptically on the company’s first earnings call last month “Suffice to say we are starting to experiment in ways in which we can upsell our ride customers to Eats deals in a way that — you know, to be plain spoken — isn’t annoying . . .

I will tell you that we are very, very early in the stages of exploring the many, many ways in which our Ride business can help continue to build our Eats business and vice versa by the way . . . I don’t want to give away too much.” Uber CEO — Dara Khosrowshahi

Then I read a story about a partnership between Uber and PayPal. Right around the time of the Uber IPO there was a story on TechCrunch about the tie-up between these two giants.

According to the article PayPal is making a half-billion-dollar investment in the company, paying $47 per share. Neither Uber nor PayPal gave much detail about the $500M investment. Uber’s S-1 and a short statement on LinkedIn from PayPal’s CEO Dan Schulman both used the same wording, noting the deal would help the two work on “future commercial payment collaborations, including the development of Uber’s digital wallet.”

Source: PopTech, Kris Klug — Dan Schulman, CEO PayPal https://www.flickr.com/photos/poptech/10484780034

This half-billion investment in Uber firmly places PayPal in the role to provide Uber’s version of WeChat Pay. According to PYMNTS.com WeChat’s eWallet is boasting a daily transaction volume of more than 1 billion last year. In fact, merchants that used WeChat Pay on a monthly basis grew more than 80 percent year over year.

So now we have transportation in many different form factors, think of all the variations of vehicles you can order using Uber. Now the company has made strong moves into e-scooters and other alternative methods of transportation including the recent announcement that Uber was taking it’s grid 3-D with UberCopter and drones delivering Big Macs -

This new service is being dubbed Uber Elevate. According to their website Uber is developing shared air transportation — planned for 2023 — between suburbs and cities, and ultimately within cities. They’re working with their Elevate Network partners to launch fleets of small, electric VTOL (vertical takeoff and landing) aircraft in Dallas, Los Angeles, and a to-be-announced international market.

In my mind the other thing really missing here is lodging, another commodity industry that Uber has yet to address. Of course there is plenty of partners that Uber can initially integrate into the superapp. Uber already moves people, providing accomodations at the end of your journey makes as much sense as booking a hotel with your flight.

But I haven’t seen any stories about Uber’s foray into this territory yet … If you’ve seen something that hints of this let me know.

Source: elias-castillo-747678-unsplash.jpg

But a recent Quartz article by John Detrixhe really drives the point home, stating Uber is looking to hire dozens of staff in New York, drawing from the city’s pool of engineers with experience in financial services, according to CNBC, citing unidentified sources.

The team could, over time, expand to more than 100 workers and may focus on payments (reducing transaction costs) and providing financial services for drivers and contractors. Even more radically, the company is debating the feasibility of launching bank accounts, according to the report. Uber already operates the Uber Cash app and launched a branded credit card a few years ago. And then there is that tie-up with PayPal.

“It seems like the trend is going toward the Asian model,” said Asad Hussain, an analyst at PitchBook. For Uber, which reported a $1 billion loss last quarter, bundling new services like fintech and food delivery could help the company keep up momentum as the ride-sharing business slows. “We’re expecting to see continued bundling of these services across both fintech and mobility,” Hussain added.

Source: austin-distel-1485543-unsplash.jpg

The article goes on to say tech executives have realized that fintech can be a lucrative opportunity once they’ve built a big platform. But American tech giants have been comparatively slow to pursue this strategy. While there’s been much focus in recent years on titans like Google and Facebook making a bigger play for finance (mimicking Tencent’s WeChat, the chat service that became a payments giant in China), any company with a large platform of users can conceivably go full fintech.

Uber is the company best positioned in the industry to accomplish this feat and introduce the US to superapps. It has a more global view than Lyft, and has the public’s trust to introduce new products and services. If these services were introduced in a contextual, needs driven way where they are “aren’t annoying” as Uber CEO Dara stated, they could drive adoption of an all-encompassing, lifestyle super-app under the Uber brand.

Reducing payment friction to make the app seamless across the various product categories is crucial. Regardless if you’re ordering a burger or a helicopter it needs to be fluid and as invisible as it is when ordering a car. Social integration and messaging is also a key component that Uber has already made inroads with, having integrated Facebook contacts. Of course furthering this with an integrated messaging and sharing will better the service.

Source: austin-distel-1462323-unsplash.jpg

But rides, food and payments are just the beginning — there is still a ton of other products and services that Uber will have to integrate before Uber is truly a super-app. But when consumers adopt the Uber super-app service and start using for all their daily needs, and the cost of receiving and making payments is reduced — product companies will be calling Uber.

So there you have it — again, this is bunch of threads I pulled together … But if you forewent the Uber IPO you might want to reconsider. Uber is a different animal than Lyft, it has bigger aspirations, and is the one company genuinely poised to claim the title of the first super-app company in the West.

If you are in the banking, fintech or payments industry and you find this article interesting, I’d like to invite you to join us at our upcoming #PAY Symposium & Exposition. It’s being staged August 20–21, 2019 at Caesars Palace, Las Vegas. Learn from and meet industry thought leaders and disruptive innovators creating the next decade of payments.

Register today using code SAVE for a 30% industry discount at www.paysymposium.com