“Uber banks on world domination” and “Welcome to the Uber Wars” are recent headlines in popular US publications. Often touted as the ultimate disruptor, Uber has become the poster child of startups. Officially launched in 2010, Uber is a ride-sharing company that uses a mobile app to link customers with drivers for hire, thereby shaking up the global taxi and rental car industries. Valuated at $18B, Uber takes a cut of 20% for each ride, and fares are comparable to local taxi services with the added perk of digital personalization.
Loved as a digital business and hated among traditional businesses everywhere
Unsurprisingly, Uber has been faced with resistance in nearly every market they’ve entered (and conquered). Protests of traditional taxi drivers in Madrid, London, Washington D.C. and the forty other markets has transformed Uber from underdog to pitbull. Developing a reputation for being cutthroat, “[Uber] has defied local laws, shrugged off protests around the world, vilified the taxi establishment, openly mocked competitors and tried to undermine its rivals’ efforts at various turns.” Practicing highly unethical strategies, (like having Uber employees order and then cancel 5,560 Lyft rides), Uber has played to win against the competition. But the secret sauce of Uber isn’t all about aggression. The latest and unprecedented jaw dropping 1.2B funding round has provided Uber with the disposable income to offer consumers seasonal deliveries like Texas BBQ at SXSW, concert
promotions, helicopter rides, and affordable courier services. These are perks that their competition could never imagine being able to implement, and all are delivered with the ease of a GPS enabled app. Localization coupled with the instantaneous gratification has produced powerful word of mouth. Uber states that 95% of all riders have heard about Uber from other Uber riders. In fact, for every 7 Uber rides, word-of-mouth generates a new Uber user. The strength of their word of mouth strategy stems from a complete immersion and integration into a city. Uber plans each market entrance to be all encompassing and backed by research. Interviewing local taxi drivers, partnering with local and industry events, and customizing each launch per local regulatory topology makes sure that their marketing and business efforts are in full support of fueling that word of mouth engine, thereby driving local growth.
Uber to the People
Whether deceptively planned or genuinely exposing their softer side, Uber has launched charitable campaigns like “Ride for a Cause” that donates $1 per trip to various charities in the DC area. In Philadelphia, UberSCHOOL partnered with Education Supplies Fund and Global Citizen to host a back-to-school drive for school supplies. And a partnership with American Red Cross to help cities and citizens during disasters. Regardless of the marketing strategy, these initiatives do give back to the communities and spark the coveted word-of-mouth magnification. Uber has been handed a lot of flack around litigation and questions have been raised around the benefits of the sharing economy for drivers. But as we’ve discussed, it turns out Uber’s mission to disrupt traditional taxi services benefits its drivers as well as riders. The median income for an UberX driver in New York City is $90,766, a salary over triple the estimated median income for a typical U.S. cab driver. While the transportation industry might be threatened, Uber employees are promised higher fares, efficiency with less downtime because they don’t have to cruise around looking for riders, and money saved by not having to apply for expensive taxi permits as well as the perk of setting their own hours. They operate as a true digital business. The latest community outreach- UberMILITARY. Led by a former member of the Obama and Bush-era administrations, it’s an 18-month effort to recruit 50,000 service members, veterans and military spouses to join the Uber driver fleet. The idea is to help cut down on joblessness within the military community and get droves of new drivers for the ride-sharing platform. The UberMILITARY Advisory Board and select subject-matter experts are building out a team that will have a clear understanding of how service members’ skills can translate to civilian lifestyle. Uber presents a unique entrepreneurial opportunity to the military community. If we’ve learned anything from the darling of digital business, Uber is strategic and influential in their initiatives. Because when government is the largest obstruction to business, hiring the military to work for you is exactly how you play to win.