I often wonder about losing my job to disruptive technologies like Uber that could potentially change the real estate business model.
Uber is an unbelievable success story that started in NYC in 2010 and took the taxi industry by storm Globally. The Uber mobile application connects riders with drivers that use their own vehicle to provide essentially the same on demand service as taxis. It solves a lot of problems like unemployment and cheap fares for the users. Versions of this underground cab industry called “Gypsy” cabs have been in existence in big cities like NY, Chicago, etc. for as long as I can remember. The app is very cool, service is fast, and rides are half the price.
Keep in mind that this disruption is not like Netflix forcing Blockbuster out of business. There is no regulatory or licensing Govt entity that required regulation of how DVDs are rented to the public. Viva la Netflix. The taxi industry (unlike movie rentals) is governed strictly by the City’s licensing commission and operators must obtain expensive licences and follow strict vehicle, training, and insurance rules. The taxi industry has lobbied against Uber in major cities. City of Brampton and City of Mississauga have now banned Uber. City of Toronto Mayor John Tory is still on the sidelines. His argument is that 10,000 people have part time jobs and 300,000 riders have an alternate option to taxis. Hello! Don’t our tax dollars subsidize TTC and GO transit?
In any case, I believe that Uber is here to stay, albeit a “little” illegal.
You smoke pot illegally long enough, the Govt will eventually legalize it. So, there is hope for Uber yet.
Real estate has its share of disruptive technologies that have challenged the traditional model. It is a highly regulated and organized licensed trade with minimum standards, education, and adherence to a strict code of ethics. TREB reports over 100,000 transactions per year with over 60,000 registered agents in the GTA. Competition is stiff and technology is on the hunt for what it can change next. Just like Uber, home sellers want convenience and savings. And, homes sell themselves, right? Many alternate business models have sprung up to fill this void by offering no frills listing services. You can pay a small fee to have your home listed on MLS. You handle all the showings with buyer agents and negotiate whether you will pay commission or not with each buyer agent. Yet another company offers leads to agents by having them bid based on commission.
For Sale by Owner companies that charge home owners to put their listings on MLS actually sell 2% through that model. The rest of the sales are agent assisted. This very profitable model gives the seller all the control and work but in the end, way less in net price and a much longer sales cycle, if successful. I suppose eBay would be the closest to agentless transactions.
If someone offers to uberlist your home for $999 know what you’re getting. If your home is a commodity, by all means. If it is your most valuable asset, hire the most knowledgeable and competent agent to realize the highest possible net value of your home.
I wonder if I can get an Uber Doctor – maybe someone who’s watched all seasons of Grey’s Anatomy.