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In February 2013,
my wife and I moved to Singapore.

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Exactly at the same time,

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Uber has announced
it started operations in the country.

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Now, my wife and I
agree on a lot of things,

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but using Uber was definitely
not one of them.

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While I was excited about the technology

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and how maybe we don't need
to own cars anymore,

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she felt that every Uber car
is here to steal jobs from taxi drivers.

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And Sarah was not the only one.

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As the Ubers, Airbnbs
and Amazons of the world --

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what we call "online marketplaces" --

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as they started expanding their presence,

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we have heard, all of us,
countless policymakers

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worried about how to deal
with these new risks

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of job destruction, lower wages
and tax leakage.

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We've also heard company leaders

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worried about aggressive competition
from global platforms

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eating up their local businesses.

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And on the rational level,
of course I understand.

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After all, this is basic
supply and demand economics.

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If, in any market,
you dramatically increase supply,

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you should expect prices, profitability
and growth to go down

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for existing players.

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But in my personal experience,

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I've also seen
the other side of the story.

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Where online marketplaces,

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like Gojek in Indonesia
or Jumia in Africa,

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have helped their business ecosystems
and the communities around them.

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The positive side I have seen

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demonstrated itself in a woman,
a taxi driver in Egypt,

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that now had the opportunity to work

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without the harassment
she faced in the taxi business.

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It demonstrated itself
through a village in Kenya

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that got an economic boost,

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because the nearby beautiful
but completely unknown lake

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is now becoming
a national ecotourism spot.

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Online marketplaces will continue to grow.

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And they will transform the way we shop,

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the way we travel

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and the way we transact with each other.

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So we really need to understand

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where is the truth
between those two stories.

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Should we expect more of the bright side

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or more of the dark and worrying side?

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And is there a way to get
the first without getting the second?

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I believe there is.

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As a strategy consultant,
I study businesses for a living.

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And as a mathematician at heart,

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I couldn't live with something
and its opposite being equally true.

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So, I went back to fundamentals,
and I asked the question:

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What do online marketplaces really do?

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What do they do?

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Well, at their core,

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they're doing something very simple.

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They match sellers and buyers.

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That's it.

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For drivers and passengers,

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you get Uber, Grab in Southeast Asia

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or DiDi in China.

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For matching merchants and consumers,

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you get Amazon, Alibaba
or Jumia in Africa.

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And for housing, you get Airbnb;

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for fundraising, you get Kickstarter --

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the list goes on.

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What all these examples have in common

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is that they transition
this basic functionality

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of matching sellers and buyers

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from the physical world
to the digital world.

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And by doing so,

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they can find better matches,

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do it faster

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and ultimately, unlock
more value for everyone.

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In fact, online marketplaces' core benefit

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is that they get us more
from the same amount of effort.

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For example,

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if you're a taxi driver in San Francisco

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and you decide to work 10 hours per day,

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then you're actually having
a paying passenger in your car

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for four hours out of the 10.

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If you take the same car
and put it on a platform like Uber,

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you can have paying passengers

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for an additional one and a half hours.

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This is the same car
becoming 40 percent more productive.

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And the same has been proven true
for other online marketplaces.

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By design, they create
more value for the economy.

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Now, we need to figure out
who gets this additional value.

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You can give it to the drivers --

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more passengers, more income.

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You can give it to consumers,
if you reduce prices.

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Or you can decide that the platform
gets to keep all of it.

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What usually happens
is that all three of them

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would somehow split it.

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But what about the rest of us?

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We can also be impacted

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without being on either sides
of this business.

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If my neighbor decides
to rent his apartment on Airbnb,

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and we have more people
coming in and out of the building,

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more noise than usual,

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then I'm getting an unpleasant side effect
of this productivity magic.

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This is what economists would call
a "negative externality."

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The negative externality
of Uber cars becoming more productive

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is taxi drivers seeing the value
of their licenses drop

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by as much as 30 percent
in New York, for example.

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This is the dark side.

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And this is what sparks
street demonstrations

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and sometimes,
sometimes, even violence.

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I profoundly believe this is avoidable.

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And it became clearer to me

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the more I have spent time
in emerging markets.

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In fact, during my time in Singapore,

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I spent half of any given week
traveling in the region,

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between Malaysia, Thailand, Indonesia,

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and I became a user --

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actually, more of a fan --

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of online marketplaces
that were not that well-known back then.

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But some of them made
interesting strategic trade-offs

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that dramatically reduced
their side effects,

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their externalities.

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Take Gojek, for example.

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They're basically Uber for motor bikes.

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They are one of the most liked
online marketplaces in Indonesia,

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and this has a lot to do
with the role they chose to play.

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Instead of picking a fight

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with every other transportation
option out there,

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they choose to gradually integrate them
within their own platform,

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so that without leaving the Gojek app,

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you can check the public
transportation schedule

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and choose to take a bus
for a long distance.

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Then, maybe, a motorbike
or a traditional taxi

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that you can order and pay for
from within the same app.

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If you look at Gojek today,

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nine out of 10 previous motor taxi drivers

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believe their quality of life has improved
after joining the platform.

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And nine out of 10 consumers --

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nine out of 10 --

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believe that Gojek has a positive impact
on society in general.

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Now, this level of trust
is what allowed Gojek to grow

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into what is today a super
online marketplace for everything

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from food to grocery

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even massages and laundry pickups.

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It all came from a deliberate trade-off

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to be an orchestrator
of a bigger ecosystem

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where others also have their role to play,

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instead of a single winner, a hero,

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that takes for himself what would,
at the end, be a smaller pie.

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Another interesting example is Jumia.

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Jumia is the equivalent
of Amazon in Africa.

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But they don't generate
the same level of fear

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in the small-business community.

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And one of the reasons for that

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is because they have decided
to actively invest

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in African entrepreneurs,

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to grow them into the digital age.

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Now keep in mind,

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Jumia is operating in countries
with some of the lowest digital literacy

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and digital connectivity
scores in the world.

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Now they could have dealt with that

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the usual way, through
lobbying for reforms --

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and they probably do that --

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but they have also built Jumia University,

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an e-learning platform

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where merchants can come and learn
basic digital and business skills.

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We have studied online marketplaces
in Africa last year.

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And during that study,
we have met one of Jumia's merchants.

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His name is Jomo.

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He was fired from his job in 2014,

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and at that time, he decided
he wanted to become his own boss.

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He wanted to be independent.

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He also wanted to never be fired again.

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So at that time,

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Jomo had no clue what a business is.

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So he needed to go through
a series of trainings

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to learn how to select products,
how to price them

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and how to promote them online.

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Today, Jomo has a 10-employee
online business.

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And as of a few months ago,

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he just opened his very first
brick-and-mortar shop

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in the suburbs of Nairobi.

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Now, through its university,

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Jumia has the potential
of helping a huge number of Jomos.

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And we have estimated that together
with other online marketplaces

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on the continent,

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they can generate three million
additional jobs by 2025.

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And they would do that either directly,

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or through their impact
on the wider community.

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And sometimes,

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taking that wider impact
into consideration

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or forgetting about it

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can make or break a platform.

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To illustrate that,
let's go back to Singapore.

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So, when we decided with my wife
to leave the country last year,

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Uber decided to do the same.

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At the same time,

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again, we started to see that pattern,

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but maybe it's a coincidence.

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In reality, Uber lost
the ride-hailing battle

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to a Malaysian-born start-up called Grab.

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Now, interestingly,

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my wife didn't have the same
level of concerns with Grab,

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because when Grab started,
it had a different name.

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It was called MyTeksi,

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and as the name suggests,
it started as a platform for taxis.

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So when Grab started expanding
the driver pool beyond taxis,

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it was seen as gradual and reasonable.

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They were also very careful
while doing so.

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They thought of what kind
of social safety net

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they should bring to all drivers.

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So they put in place
special insurance packages

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and even financial education programs.

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Now, compare that
with what happened in London,

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in New York, in Paris,

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where taxi drivers didn't feel
that the platforms understood

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they had to pay 200,000 euros
for their license --

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and mostly in loans.

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When you don't take that kind
of social environmental information

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into account,

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you get strong reactions.

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I'm not trying to argue
that the trade-offs

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by either Grab or Jumia
or Gojek are risk-free.

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Did they slow down growth
at some point, temporarily?

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Maybe.

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But look at them today.

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Gojek is worth 10 billion dollars.

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Jumia is one of only three unicorns
in the whole of Africa.

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And Grab, well, they pushed out Uber

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out of the whole region of Southeast Asia.

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And I also think these trade-offs
have nothing specific to emerging markets.

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Amazon or Uber or others
can learn from them

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and adapt them to their own realities.

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In the long run,

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this doesn't need to be a zero-sum game.

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In the long run --

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and this is maybe the Asian
side of me speaking --

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it pays to be patient.

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It pays to reconsider
your goal and your priorities

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in the light of a much bigger equation

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that includes you
and your users, of course,

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but also it includes regulators,

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policymakers, your communities.

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And I would argue, above all,

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it includes the very businesses
you are meant to disrupt.

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Thank you.

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(Applause)