In this blog, we will look at how Uber attempted to capture the market during their initial launch, as well as how it addressed each problem and devised a solution.
How They started
Uber is a Taxi booking app that acts as an intermediator between rider and driver. They provide platforms for drivers and customers and charged them both as commission and made revenue out of it. Uber was founded by garret camp and Travis kalanick. Garret camp is a computer engineer and a co-founder of stumble upon. Travis kalanick was a co-founder of Red swoosh before joining Uber, he sold red swoosh for $19 million in 2007.
You might get bored of hearing histories. Let’s move on to the next part!
How Uber survives its Initial stages
In the initial stages, every company must go through a lot of cash burn for customer acquisition unless you have a super-demand product. Because the idea of Uber is completely new to the market. People have practiced the traditional way of doing Business. If I discuss Uber's business plan before its official launch, you may think of me as mad, because there is no Uber at the time. And there is no other way to survive in this market. Uber has done its initial campaign with its referral marketing strategy. where users can give free rides to their friends while earning credits for themselves. Drivers also get referral incentives, thereby acquiring both driver and rider sides faster and easier. Something has to drive the user to get used to the product. Referral marketing is one of the hits among both drivers and riders.
Address the main problem
Before the Uber revolution, people used to pre-book their taxis in a traditional way to get on rides or have to wait for long hours. There is no app to book a cab with the convenience of just one click from mobile phones. So, people had to wait. Yes, wait!
And the increasing adaptation of people to digital, there created a need, that someone to fulfill the market demand. Garret camp persuades his friend and co-founder Travis kalanick to join him. Both founders grasp this opportunity and come up with a great solution.
Now Uber is in 72 countries and 10,500 cities as of 2021. By the end of the fourth quarter of 2021, Uber had 118 million monthly active users and 19 million trips on a daily average basis.
I hear you, What’s next?
Convenient Booking
How does Uber disrupt the traditional taxi business?
Riders can book rides from the comfort of their homes using mobile phones. The simple app interface helps the user to adapt easily to the growing market. Even in a dense urban location, a driver usually arrives within 1-3 minutes. If riders need to cancel their rides, Uber has the option to do so whenever they want. Convenient booking alleviates the customer's pain point.
Rating system
Sometimes there is a misunderstanding between riders and drivers, which can lead to serious issues. To overcome this problem, Uber launch a rating system for riders. The riders can rate their drivers from the aspect of their service and behavior. As a result, the rate of complaint has remained low, as every driver actively seeks positive ratings from riders. It also makes it easier for riders to choose. Finally, the relationship between drivers and riders improves.
Offers a wide range of products
As Uber expands into the global market, they realize there are numerous customer segments to target. Take any product, and the customer is divided into price segments. Every brand caters to a different customer segment. To capture the entire market, they develop a diverse product line. This helps Uber to reach every customer possible.
- Uber x = Four-seat sedan
- Uber XL= XUV or van
- Uber pool = Share rides with a person who is headed to the same destination.
- Uber moto = Bike taxi
- Uber Auto = Auto rickshaw
- Uber premium = High-end luxury vehicle
So, Uber reaches as many customers as possible, and there is no other area where Uber falls short.
Surge Pricing
Uber launched surge pricing in 2014. What exactly is surge pricing? It is an Uber algorithm that charges you more than your usual fare. This is used to manage supply and demand. This occurs during Festivals, night rides, and in bad weather.
How it impacts supply and demand?
Higher fares encourage drivers to travel to high-demand areas and take advantage of competitive pricing. Riders must pay an additional fee if they are in desperate need to travel. So, it cools down the high demand. As a result, supply and demand are well balanced. During the busiest time, it is not uncommon to see the multiplier 3x or 4x from the regular price of a ride.
End note
We come to the last part. Every section I mentioned above has an impact on uber growth and is a takeaway for business enthusiasts. Hope I covered everything. And there are a lot of controversies around Uber, like data theft, work culture, IPO, and driver issue that I don’t want to get in. This article isn't about it.
I have another piece of information to share. If you are an entrepreneur interested in developing an app similar to Uber or starting a taxi booking business. It isn't too late. Nonetheless, Uber is missing out on some markets and audiences. Conduct your research to determine what is missing.
We are a team that assists entrepreneurs in starting their taxi businesses. How? We build a clone app exactly like Uber using Flutter technologies. Uber clone is 100% customizable in which you can adapt to the recent trends and current market demand.
I Hope, you enjoy reading this. See you all in another blog.
