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Why Uber could power our on-demand future

Back in June, I wrote about the widespread criticism of Uber’s $17 billion valuation.

I pointed to the potential for the company to become far more than a platform for taxis. Investors have placed their confidence in Travis Kalanick and his team because of a bolder vision to become the underlying architecture for on-demand deliveries online.

The company has experimented with magicking up burritos, picnics, instant ice cream and even weddings but the past week saw its most significant moves yet.

Opening up

First up, Uber began opening up its API to other apps.

So far this allows third-parties to pass a destination address to Uber, display pickup times, provide fare estimates and access trip history. However, it’s clearly the first step towards establishing Uber as the infrastructure for other transport and delivery services.

Expensify, Hyatt Hotels & Resorts, OpenTable, Starbucks, TripAdvisor and United Airlines have already partnered with Uber and integrated it into their apps.

The second interesting development came in the form of Uber’s latest trial service, a feature called Uber Corner Store.

Rolled out to a limited number of users in Washington DC, the option lets customers order from a selection of more than 100 items and have them delivered to their doorstep in minutes. The feature harnesses the company’s current network of drivers.

It follows experiments running a courier service in New York and offering a removals option called UberMovers in Atlanta and Nashville.

Uber for… everything

Since Uber launched in 2010, there have been countless startups couching their elevator pitch as “Uber for…” but life is about to get a lot more difficult for those companies.

By opening up its API and using its experiments to demonstrate the breadth of applications for its platform Uber is making it harder for new startups to justify building their own systems.

Why invest in developing your own logistics back-end when you can simply tap into Uber’s tried and tested model? And that’s before you take the company’s brutal tactics and massive $1.2 billion in funding into account.

Kalanick clearly articulated his vision at a Fortune conference last year: “We will be the cross between lifestyle (give me what I want and give it to me right now) and the logistics to get it to you.”

The strategy is reminiscent of Amazon’s expansion from bookseller to “everything store” and Facebook’s decision to open up the social network as a platform for app developers. Rather than having to enter every new market itself, Uber could end up powering and profiting from a new generation of on-demand services with “Uber inside”.

Though Kalanick has previously said that competitors should expect Uber itself to enter any on demand space which fits its combination of lifestyle and logistics, creating a platform for new businesses could be the smarter move. Becoming the underlying architecture for new apps and profiting from them will allow Uber to justify its massive valuation without having to deal with the regulatory hurdles of every new market.

However Uber executes on its strategy, the breadth of its vision and the depth of its pockets mean you’d be foolish to bet against it. In the next few years Kalanick and his team will go head-to-head with Amazon in the race to realise truly scaleable on-demand delivery.

Building an army of apps and services to achieve that goal could be how Uber outmanoeuvres the giant.