Amazon, Uber, Netflix, Facebook, and Instagram are all changing, and not for the better. While I usually try to find the bright side of technology, I can't ignore the fact that these services are worse than many people think. In this article, I will explain why and what we can do about it.
The pattern that these companies follow is simple. At first, they offer a superior service to solve a key problem and attract users. For example, Uber provided a more convenient, cheaper, and better taxi service. However, once they have a solid user base, they shift their focus to the other side - the drivers. Uber, for instance, started offering sign-on bonuses, cashback on fuel, discounts on car maintenance, and surge pricing to attract and retain drivers. This strategy helped Uber build monopoly power and make it harder for users and drivers to leave the platform.
The third stage of this master plan is to take all the surplus for themselves. This is when true monetization occurs. Companies like Uber and Amazon start charging users and suppliers more, while providing a lower quality service. This is often done through tiering - splitting the base service into multiple tiers at different price points. For example, Uber now offers Priority, Comfort, Exec, and Lux tiers, which can lead to longer wait times and a lower quality service for users who don't pay more.
Netflix is another example. When it first started, Netflix felt revolutionary, offering a large library of movies and TV shows for a low price. However, they have since introduced 4K quality and ad-supported tiers, which have made the service more expensive for many users.
Subscriptions, in general, can be a good thing. They can make services more accessible and force companies to continue providing value and updates over a period of time. However, the way these big tech companies are using subscriptions now has meant that we're often paying both the monthly subscription and the bigger upfront costs, while getting a worse service than before.
Amazon Prime is a prime example of this. The entire purpose of Amazon Prime was unlimited one-day deliveries. However, now users often have to pay for the fastest delivery and meet a minimum spend to get that perk. Uber has also increased its prices significantly over the years, making it more expensive than traditional taxis in many cases.
In conclusion, big tech companies are changing, and not for the better. They are using tiering, subscriptions, and other strategies to charge users and suppliers more, while providing a lower quality service. We need to be aware of these changes and push for governments to enforce smoother switching between platforms, and for companies to continue delivering on their initial promises beyond the initial honeymoon phase.