Unbundling Channels in Travel and TransportationIt is all over the tech news – transportation service provider Uber launched their API. That means Uber now allows programmable access to their core services including passing a destination address to the Uber app, display pickup times, fare estimate provision, and trip history access. More services are to come. Clearly, this  move allows Uber to tap into a range of new opportunities.

By opening their services via APIs, Uber addresses the following API Economy use cases:

1. Developing Massive Reach By providing an API, Uber makes the critical move from being a service to becoming a platform provider. The benefit being that Uber can leverage network effects and access a multitude of new channels by doing so As Gartner vice president Nick Jones told VentureBeat, “Opening up an API is a good move from Uber’s perspective because it embeds them in a wider range of apps and processes and increases their sales potential because they have more channels.” (source)

2. Customer and Partner Ecosystem Growth Uber launched their API with eleven launch partners already in place. They are: Expensify, Hinge, Hyatt Hotels & Resorts, Momento, OpenTable, Starbucks Coffee Company, Tempo Smart Calendar, Time Out, TripAdvisor, TripCase and United Airlines. United Airlines is one of Uber’s first official partners in integrating with their global transportation service. United’s mobile app shows its passengers Uber’s fare estimates and ETAs of the closest drivers. (source)

3. Driving Innovation – No Pun Intended A third API use case Uber is certainly banking on is to drive innovation, as they clearly understand that it can’t all come from them — as a quote from their newsletter confirms, “We’ll never conceive of every great idea, though, and we could certainly never build them all.”

A great example of what can be done with the Uber API is what our APItools product team and evangelist came up with here – a cool way to get info on when the price drops (during peak times) to the price a rider is willing to pay.

(Incidentally, in our ebook “Winning in the API Economy” we identify and go into detail on five typical API use cases, including the three noted above.)

This opening of organization’s data or services isn’t just a strategy, it’s also very good business. And there is clearly a trend in the sector.  Hailo — a taxi hailing service and Uber competitor — announced the release of their own Hailo API on the same day as Uber. A similar service is Carma, which has provided APIs for quite some time through their Carma API program – though Carma is slightly different in that it allows users to find and share trips.

Digital Revolution, APIs, Travel and Transportation

In their article The Trouble with Travel Distribution McKinsey & Company describe the disruption and opportunities that the digital revolution brings to the traditional travel sector. The authors outline four imperatives that can help organizations in travel and transportation deliver outstanding customer experience and stay ahead of the curve:

  1. Focus on customers, not channels
  2. Win in the era of big data
  3. Unlock the power of partnerships
  4. Master the entire customer experience

Without explicitly mentioning it, McKinsey underlines the effectiveness of APIs in realizing all four imperatives. At 3Scale, we agree that customer focus will naturally lead to an unbundling of channels where being customer-centric becomes more important than being channel-centric. In fact, by providing APIs and transforming from a service company to a platform company, a multitude of channels emerge.

For example, third parties can create API mashups combining the services of various API providers into more fine-grained and targeted customer-centric offerings to travelers. The case of Uber and United is a perfect example. Potentially any app with a map could be a prospective Uber API partner extending their channel.

Further evidence that digital revolution is afoot is in the 17th annual global CEO survey conducted by PwC that included 1,344 business leaders in 68 countries. It reveals that technological advances such as digital economy, social media, mobile devices and big data will drive business transformation the most in the coming five years according to the CEOs surveyed. Yet at the same time, these business leaders admit they don’t feel their organizations are well prepared to tackle and leverage technological advances appropriately. Most believe the key is in technology investment, and focus on innovation and partnerships.

PwC global CEO survey -- 3scale

3SCALE API Management in Travel and Transportation

3scale Transportation Partners3SCALE provides an API management solution that covers the core aspects of exposing an API including usage policies, rate limiting, access control and security, analytics and reporting, API documentation, a developer portal, and monetization and billing. In particular we have a strong track record and satisfied customers in the Travel and Transportation sector. We work with the sector through various activities and support hackathons. 3SCALE is also the official API partner of the Startupbootcamp center for Smart Transportation and Energy.

Interested?  See for yourself by signing up for our free Base Plan or request a demo.