6 Key Success Factors Behind Uber Growth

Eugene Suslo
Sep 21, 2016

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Uber growth

History of Taxi Industry

Taxicabs were invented to provide easy travel solutions to everyday working class people who either had limited transportation options, or a need to ride in style without having to drive themselves. The industry has been around since the 1600’s when the horse and buggy were used to transport individuals in Paris. It wasn’t until the 1800’s when the trend carried over to the US and other countries, becoming most popular in the city of New York. The trend started after mass development of the automobile came into play. People saw an opportunity to loan automobiles out to create competition for the horse and buggy industry, in which they ultimately succeeded.

Oldtaxicars

Evolution of Taxis

Today we still use taxicabs in a variety of major metropolitan areas across the country, and other similar countries. Taxis have been integrated into our culture, being a major symbol many associate with the city of New York. It also has become a faucet in the entertainment industry and news media. While the yellow taxi cab has been integrated into many societies, there now exist an extension of the traditional taxi, that seeks to revolutionize the industry. This new extension is called ridesharing, which are applications in which it becomes easier and more convenient to get rides in an untraditional manner.

The concept is fairly easy. Such applications allow you to hail a ride from a stranger, and save cash at the same time. To most individuals who use such service they see ridesharing as economic freedom, in that they no longer have to pay outrageous prices to hail a ride. Such apps came into existence around 2010, and now Uber has integrated ridesharing within its business model. Businesses like Uber are also green. They are green in that they fill more seats in people’s cars. This leads to fewer cars on the road. In turn, there is less pollution and a decrease in the amount of traffic on the streets. All of which are positive impacts on society as a whole.

Understanding Uber

Uber

Uber was founded in San Francisco, California in 2009. It started as a transportation network company that utilized licensed taxi drivers for its ridesharing services. In recent years the business has introduced non-taxi driving rideshare services into its business model. The idea behind the business was to integrate a mobile application into its practices to connect passengers with drivers of vehicles for hire. The drivers within their network utilize luxury vehicles for passengers to ride in style like Lincoln Town Cars, Escalades, BMW 7 Series, and Mercedes-Benz’s. Users are able to reserve vehicles by sending text messages or through the use of the application on their mobile devices. The customer can also track the vehicle as it makes its way to their location.

Key factors:

Benefits for Customers

Uber is a problem solver for riders. It is a problem solver first because the service provides a ride for those individuals who need taxi cab services at reasonable prices. There are millions of people, across major cities who utilize such services and Uber has de-monopolized the taxi cab service and reinvented it in every way. Uber is also fixing up the structure of the taxicab industry and making the industry more reputable. It is doing this by providing rides that are clean, offering up quality customer experiences, and accepting different forms of payments. They have also made the experience more customer oriented in that they allow the customer to track their vehicle as it is in route to them. They have also allowed customers to pay with their credit cards from the inside of the vehicle.

Benefits for Uber Drivers

Customers aren’t the only ones experiencing positive effect from the implementation of this service. Uber drivers are also benefiting. The company is creating jobs for drivers and limo companies that are having difficulty finding work in the city. As the company does not employee the drivers through the service, they do connect qualified drivers with customers who need rides located within a specified geographical area.

Early Adopters:

Uber had much success when the early adopter tech community began to take notice and use of the technology. They knew opening in the San Francisco area was a smart move on their part as they would have access to a highly interactive tech community who would take an interest, and be looking for services that would improve their quality of life. They also found success because they found that the taxicab market in the area was not the best quality and was not widely used by the inhabitants, so their business structure and services would seek to improve the quality and taxi cab service. Uber began to market to these individuals and promote in different ways and channels. They did this by hosting tech events. One of their prime ideas was to give members of the community free rides through the services and host awareness meetings for those who would most likely take part in utilizing their services.

Word of Mouth

The early adopters of Uber in the tech community saw that Uber provided a solution to the failing taxicab industry in San Francisco. As they enjoyed the free rides and tech events sponsored by the service, they began to spread the news. The tech community took to social media sites like Twitter and their blogs to tell their friends and fans about a new way to catch a ride in the city. As they began to spread the news, Uber saw growth in its business.

Uberdriver

Many noted the success came from the friendly and quality experience they received from taking part in the services, and how it stacked up better than its competition. The company itself also noted that most of the growth associated with the business comes from word of mouth by the customers who take part in utilizing the services offered. Even celebrities have taken part of the Uber experience noting that the service offers an amazing experience to users.

Price Surging

Another factor that has added to the growth of the company is price surging. This means that as the demand for rides in the city increase, the price for Uber services increases as well. While some riders do not appreciate such increases its great for Uber. Keep this in mind, major cities have major nightlife. Say if a storm broke out, or ice was on the road, people would more than likely want someone else to take the responsibility of getting them home safe, without having to hail a taxi, that can be unreliable. In such situation, one could press a button and have an Uber driver show up with instance and hail them away. It’s a matter of convenience. Such convenience and luxury can often come at a hefty price.

Although high prices resulting from increased demand can be a major problem for some riders, Uber has put in place some caveats. Uber is sure to release a warning before prices of fare begin to increase as demand increase. Even after prices surge, Uber reports that there really has been no change in the amount of riders taking part in the service. They also were afforded free publicity and advertising in such instances. Also while price surging does occur, rarely, Uber’s pricing is still fair when it comes to riding in luxury at the press of a button.

Disrupting Old Industry

Today Uber is disrupting the market for taxi cabs and transportation in general. The company is changing the face of taxi services. They are doing this by transforming car ownership and transportation, and re-inventing and introducing it in a whole new way. Uber has more black cars in San Francisco today than it had before. Uber is bringing ridesharing services to parts of the country, and even the world who have never had the luxury of utilizing transportation services in this way. The business has exponential growth potential, as investors are racing to them to get a piece of the pie.

Uber is making it less of a need to own a car and instead purchasing rides. Investors feel as if the service could have huge implications on society as it stands at this very moment. In an effort to expand it services to other markets Uber has experimented in several areas to include Uber ice cream services, bbq, and roses for valentines day. Uber is just one step in the direction of a new taxicab like experience. As they may have made a huge imprint on the world of rideshare you have to be on the lookout for competition. Think Uber is the next best thing, you may just need to think again.

Regards,
Co-founder, Eugene Suslo