[REN #593] Uber All Over Real Estate

Picture of a White House Next to a Pond for Real Estate News for Investors Podcast Episode #593

Uber is throwing back the curtain on its plan to disrupt the real estate industry, although it’s not clear yet how completely disruptive it will be. The ride-sharing company issued a press release saying it will provide an Uber-like on-demand experience for buyers and sellers and reduce transaction costs by as much as 50%.

Uber has been at the forefront of the whole ride-sharing scene, which has been disruptive in the transportation world, especially for taxi drivers who’ve been fighting to keep Uber away from their most precious markets, like the airport and big cities. But it’s not clear yet how Uber will actually revolutionize the real estate buying and selling experience.
 

Uber Promises Real Estate Disruption

Uber registered the name “Uber Real Estate” back in 2009, so there’s been some forewarning about this alleged real estate tsunami. The press release was out September 4th promising to disrupt the “traditional real estate brokerage brick and mortar business model.”

Chairman Brent Ritz said in the press release, “You will never again pay a full commission using Uber Real Estate. We take the Jack Ma and Steve Jobs approach to business and supply the consumer with what they want. We will make Uber Real Estate the premium service it should be, provide the ultimate value and market liquidity. This is for the people.” (1)

The tone of the press release feels somewhat theatrical, probably because it’s not clear what Uber is bringing to the table that isn’t already taking hold in the real estate world. There are plenty of other online platforms that are cutting commissions for buyers and sellers. Forsalebyowner.com comes to mind. It’s been around since 1999. A few other more recent websites that are doing something similar include Opendoor, Redfin, and Help-U-Sell, to name a few.
 

Uber Promises Something Bigger and Better

But Uber is promising something bigger and better. The press release goes on to say, “Consumers will receive Uber-Like Execution with only experienced professionals, no more drama and only substantive yes or no, answers. Uber Real Estate provides Broker and Broker Attorneys with ten to thirty years of experience to the company’s clients. Associates have equity participation based on performance metrics. They have assets, skin in the game and perfect records. They are part owners of their firm and consequently, do not compete against others at their own firm. They actually do provide agency and work for the clients of the company as it should be.”

The website homebay.com offers all kinds of services and only charges a $2,000 flat fee to sell a home, which is probably less than the 50% discount offered by Uber. It also offers smart technology and a fast, first-rate experience. Is the Uber plan so different?
 

“Get It Done with Uber”

The press release states unequivocally that, “People are sick of fees and the boring drama of under-educated inexperienced Realtor cheerleaders. Uber Real Estate provides superior service with the unnecessary overhead, inefficiencies and bureaucracy removed.” It says, “Consumers just want to go online and get it done with Uber.”

What appears to be more unique is not just the equity participation among associates, but the website says that clients will also have access to equity options when they complete a transaction. And, it says, they become limited partners and lifetime clients by doing business with Uber Real Estate. (2)

Uber has already expanded its business model for transportation services. And that’s where it may get more immediate traction, but even within that realm there’s a healthy amount of skepticism.

A recent Forbes article had the headline: “Is Uber for Everything a Good Thing?” (3) Among Uber’s new transportation services, is the Uber Eats food delivery system in about 200 cities, with expansion plans for another 100 cities. Uber recently acquired bike-share startup Jump and announced plans to invest in an e-scooter company called Lime. And then there’s an ambitious Uber air taxi venture that’s underway. But those are all related to transportation services. The real estate branch of Uber seems to be a sharp divergence into something new, for Uber.

Uber is promising a mobile app for its real estate business in the near future but the website is up and running. I haven’t actually tried buying or selling anything on this site. If you’ve tried it and would like to share your experience, write to me. I love to hear about anything that’s radically different.

Links:

(1) PR Newswire Article

(2) Uber Real Estate Website

(3) Forbes Article

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