Uber Growth Strategy Broken Down (Lessons In Entrepreneurship)
This blog post is useful for taxi startups or ride-sharing companies that are planning to build a successful business model like Uber. In this article, we only talk about one such strategy, that was used by Uber for its exponential growth.
The concept of ride-sharing apps has become extremely popular ever since 2012. Uber, has become one of the most widely recognized ride-sharing services across the globe.
You may be aware of the idea behind Uber. It is: A transportation app, Uber enables people to book a cab through the app. The replacement of old public transportation services into on-demand taxi services – is the main idea behind the Uber app.
In the year 2016, Uber successfully completed its 2 billionth ride, according to a report by Reuters.
Currently, Uber has changed the way people use transportation. In the past, ride hailing was an extremely manual process requiring upfront planning and physical effort. At the very least, you had to call a cab company for all your needs.
Now, Uber has made it possible to hire a cab in a fraction of the time. In a few minutes. If we look at Uber’s growth between 2009 and 2016, the total amount of money raised was approximately $11.5billion from multiple private equity investors and venture capital.
According to a recent report by Crunchbase, “Uber has raised $2 billion in debt financing, at a valuation of $120 billion.” Uber is worth around 11.1 times revenue.
Let us look back at the growth of the on-demand taxi business – Uber.
- The Uber service is available in more than 83 countries and 760 cities across the globe.
- Uber accomplishes 40 million rides per month and 77% of those are of the US ride-hailing market.
- In the following graph, you’ll see the comparison between Uber, Lyft and Yellow Taxi. It is clear that the growth of Uber has been steady since 2016.
Apart from this, it becomes imperative to dive into the strategy that is followed at Uber, and how you can use it to develop your own app like them.
Uber’s Growth Strategy – Study Users’ Problems and Requirements
For any startup, before the actual development of any application, it is important to understand the users’ current challenges and what they want.
Here, we’ve compiled the top challenges that were faced by users before the emergence of Uber and Uber-like services.
Challenge 1 – Unfamiliar Drivers
Uber noticed that people were uncomfortable and had a lot of issues with the unfamiliarity of drivers. More people were discomforted with the idea of riding around with an unknown driver.
Solution: To create a partner profile where everybody could see the profile and rating of their Uber partner as soon as a booking has been made. Through the Uber app, users could see drivers profile, past trips, and other vital information, making them more familiar with their driver.
Challenge 2 – No Real-Time Notifications
Before Uber, you would only be able to make a booking with a taxi company, and then have to keep calling them back to see if they’ve actually assigned someone. On top of that, you had to continuously call the driver and monitor their location through manual effort.
Solution: Uber noticed these issues and allowed the ability to check the location of the vehicle in real time after making a booking. This completely revolutionised the way we look at ride-hailing services and made this the de facto standard.
Challenge 3 – Users Wanted To Go Cashless
By observing users patterns, and listening to their concerns, Uber realized that cashless payments were something that a large majority of the people wanted while booking taxis. This is mostly only a convenience, but by listening to your market, you often find that satisfying their needs is easier than what you imagine.
Solution: Uber noticed this issue and implemented cashless payments through the Uber application. This was a great step for the reason of convenience and also the B2B opportunities in which companies could directly create lines of credit for travel expenses and give them to their employees.
2 Important Lessons for Startups
In the above post, we’ve carefully analyzed the common concerns which are faced by users who seek an ideal taxi booking service.
As long as the perfect lesson is concerned, here are some important lessons:
- Always listen to your users and understand their challenges. Uber did this extensively before taking their app to the world.
- Come up with innovative solutions that are flexible and rewarding.
At Teqsense Technologies, we’ve worked with 15+ startups and encouraged them to make continuous enhancements as per their users’ requirements.
If you are a startup owner who wants to build a successful business model, no matter what are the conditions. We can help you with the optimal solution.