Imagine the last time you had taxi ride. Was it pleasant, neutral or unpleasant?
Currently operating in 35 cities, Uber has been rocking the transport space. It describes its mobile app as being able to “connect you to a driver with a tap of a button”.
You push a button, and in as little as 5 minutes, a black car, taxi or peer-to-peer driven car arrives to transport you from point A to B. Simple.
The typical sentiment towards taxi has been slightly negative due to safety and trust concerns. Examples include dishonest cab driver that might take detours away from the destination and drunk passengers who refuse to pay.
Uber beats this status quo by providing a consistently great service. Drivers often greet passengers with a bottle of water, and are incentivised through Uber’s ranking system.
This is reflected by its fiercely loyal fan base who fought a transportation bill that disadvantaged Uber’s usage. The result was a whopping 50,000 emails and 37,000 tweets with the hashtag #UberDCLove.
When was the last time you did that for your cab company?
Here are some factors that are leading to its massive success.
Riding Marco Trends
A huge factor behind Uber’s success was aligning with the marco trend towards collaborative consumption. For example, AirBnB facilitates room sharing while eBay facilitates commodity sharing. This allows assets to be better utilised, rather than sitting idly as an expensive deadweight.
With technology enabling real time data and smarter usage, collaborative consumption is only going to increase. Uber is poised to benefit greatly from it.
Use Data To Guide Decisions
Uber uses data to guide its market maneuvers. Through their innovative pricing strategy, real time feedback of the service demand is used to determine the cab prices. This beats the tradition cab system that has a more rigid pricing structure.
This also applies to its promotions. It experimented with offering discounted rates during non peak period (e.g. 2pm) but to no avail. A possible reason behind this is that users have no legitimate need for transport when they are at work. With this data feedback, Uber switched its focus to other promotions that may be more effective.
Supply Focused Strategy
Most businesses focus on increasing demand. Interestingly enough, Uber focuses primarily on supply to drive its marketing strategy. Their philosophy is that the penetration of smartphone and credit card usage will support the growth of demand. Hence the gap lies in the supply. This aligned with my observation on Uber recruiting driver via Facebook ads.
Trust via Technology
A key value proposition of the service Uber provides is building trust via technology. Taking taxi rides has traditionally been a less than positive experience. Both cab drivers and passengers are concerned at encountering an unsafe stranger.
With a rating system where both parties can rate each other, accountability is built in. Uber becomes a network haven for ‘safe and pleasant’ cab drivers and passenger.
Pro-active Customer Service
Rather than outsourcing customer service, the team at Uber stays in touch with their day to day operations by going through customer emails. This allows them to understand current gaps in their operation and correct it.
This also facilitates identifying possible partnerships from organisations who have been using their services a lot. Its a signal that they are advocates and and more likely to be keen for a partnership.
Which leads us to our last point…
Uber relies on early adopters to fan the word of mouth. One distinct channel was event sponsorship. During a recent event by Uber’s growth hacking by General Assembly, Uber offered a $10 voucher to those using its services to arrive at its event.
By targeting attendees who are well connected and social media savvy, they are able to generate low-cost word of mouth and increase publicity.
In a Nutshell…
So there you have it, a short coverage of six elements that are part of Uber’s business growth strategy.