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June 27, 2017


James Glu

Fascinating. So Uber builds a business based on a free app...disrupts taxi industry across the world, garners a $60Billion market cap...all without SMS. But now they've seen the light on how real business is done on mobile...with SMS?

Am I missing something? Because it appears to me that Uber could not exist without the app. Uber could not have been launched as an SMS service. Uber can not exist now as an SMS service.

If you don't use Uber, you might not know that Uber has supported SMS for communicating between customer and driver forever, so using SMS is not something new.

What is new is that you can now request and pay for an Uber for someone else. You know, like a parent ordering an Uber for their child. For sending your date home safely after a one night stand. Sending a client back to the airport. Any scenario where someone with an Uber app (app absolutely required) wants to order and pay for an Uber for someone else.

If you don't have an app-phone, you can't use Uber yourself. If you have an app phone, you can use the Uber service, including ordering and paying for a ride for someone else, whether they have the app or not.

Barney Rubble

Welcome to the mobile stone age!

That's Tomi who still doesn't seem to understand how doing real business with mobile works.

SMS is good for one thing alone: To send notifications to your customer because it doesn't depend on a service app running to get the notification.

Building an entire business on SMS alone is like a fool's errand, unless you live in a country with such small smartphone penetration that any other route is closed by default.


I am pretty sure you have not followed the developments in the mobile market. SMS is actually making a growth spurt. The global revenues of A2P SMS alone are at the same level as gross global app store revenues (iOS+Android). And A2P SMS are growing 4% per year. If app stores are important, SMS are too.

A2P SMS Market (Application to Person)

"Application-to-person (A2P) SMS is an innovative technology that has gained much prominence in recent years. Rapid growth in the e-commerce industry, the availability of low-cost smartphones, the growing penetration of the Internet, and the resultant rise in cloud and web-enabled services such as mobile payments and mobile banking have been aiding the adoption of A2P SMSs in a number of sectors and applications. The further proliferation of mobile payments, mobile banking, and mobile health services, among others is also expected to fuel the A2P SMS market during the forecast period.

The global A2P SMS market revenue stood at US$57.27 bn in 2015 and is expected to reach US$83.03 bn by 2024, expanding at a CAGR of 4.2% therein. The volume is expected to reach 2,273.39 bn SMSs by 2024 by, augmenting at a 4.1% CAGR from 2016 to 2024."


@Barney Rubble
> real business with mobile
> a country with such small smartphone penetration

What an incredibly first-world-centric perspective. Real business with mobile has been done for far longer than the iPhone exists, using micropayment with prepaid mobile credit. But apparently not in your country, which is why you are uninformed about it.

James Glu

Hi Winter. I've not said anything about SMS being worthless. It's this quite odd stance the author of this post took as it relates to mobile apps, in particular Uber. I had trouble finding a source article to check out what he was referring to. Nobody else wrote an "Uber looks to SMS to increase revenue" or anything similar.

I finally found out that Uber had added the "you can send someone an Uber" feature. It's not about embracing SMS at all. I imagine that MOST of the areas that have Uber service are populated heavily with smartphone users. Has to be as Uber is an entirely app driven business. A business of such magnitude that Uber has a $60 Billion market cap. One company running on a free app.

I'd think the last company one would point to in making a case about how unimportant apps are would be Uber.

It's also fairly hard to imagine how this new feature will extend Uber service to people who ONLY have SMS. You can't call an Uber by text. You can't pay for an Iber by text. All texting can do is let you know a driver is on the way.

Tomi T Ahonen

Hi James Glu, Barney Rubble, Winter & chithanh

James - You are putting words in my mouth. I never said Uber could not succeed without SMS or that SMS was the only way to do mobile. I said even Uber has now noticed, that SMS reaches a far larger audience than an app does. This has been my argument from the start, this is what all majors of the industry teach, and even the apps people are getting it now. But I was the first to point it out when the App hysteria started, and once again, I was right. Even Uber takes my advise, directly or indirectly.

As to 'Uber could not exist with SMS' or that an Uber-like taxi booking service could not be launched on SMS, you are so wrong it is funny. Dozens of Uber clones have launched successfully on SMS. Just go visit India and see several in that country alone.

Barney - baloney. SMS is 2.5 times larger in total revenues than the global apps industry including its 30% tax that Apple and Google take. Premium-SMS alone, the part that third party service providers use to deliver services via SMS, that part is as big as the apps industry (see Winter's numbers for example). If you think that you cannot build a business on SMS, you are sadly mistaken. Visit Kenya for example (or Finland) and be amazed.

Winter - thanks. Totally agree with you. And thanks for posting the numbers already so I don't have to :-)

chithanh - agree with you and yes, a totally rich-world myopic view to this industry. This blog exists partly to help eradicate those mistaken views. Thanks for helping us see the full picture :-)

James - on your second comment - stop with the market cap argument. I mean literally - stop mentioning it. That is not real value, that is investor hype that Uber is actively driving, even as many analysts are warning that Uber is not sustainable and its market evaluation is massively overvalued. This blog will NOT allow stock market type of debates and discussions. I know who you are James, don't test me on this issue. No more mention of market cap. That is Wall Street speculation and has nothing to do with Uber's real commercial value. Talk about their revenues and profits (losses) if you want to talk about their business, not how on one given day, the Wall Street speculators have evaluated a new tech darling. This blog will not tolerate Wall Street speculation debates.

As to other articles? Oh, you REALLY think MY focus is to try to find articles where I can somehow 'agree' with what other tech writers (most of them fools) happen to write? This blog ATTEMPTS to add VALUE to my readers. Pointing out matters that others may not have. If the news is clearly understood by all, I will simply mention it and move onto something more relevant. Just because you were unable to find a few of your fave tech writers 'noticing' the relevant parts of this news, that is not MY fault. It is CLEAR that when Uber finds a way to sell tickets that give rides to consumers who do not have the 'required' tech on them - that EXPANDS the market - that means MORE taxi-travelers can use their service. That is textbook expansion of a business's customer base. And that is typical of how mobile finds customers and shifts the payment to someone else - like for example the 'Please Call Me' services they have in many places in Africa - where if you don't have the balance on your phone to talk, you send a PCM message to a friend, who can afford it - and now EXTRA voice business is generated, initiated by one consumer and paid by another. This is part of the economic magic that mobile enables. Uber has (finally) found this - what most major companies who get into apps have discovered long ago. That SMS reaches a larger total audience. Hence any app should really add SMS support, as for example explained in one of the best Apps books by one of the best authors of our industry, Peggy Ann Salz.

Tomi Ahonen :-)

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