Commuting from one place to another has always been an essential requirement of man, and different solutions have been proposed in different eras to fulfil this need. From navigating the city through physical maps to having the cab stop right in front of you with minimum effort, we have come a long way. New modes and technologies have repeatedly extended the boundaries of cities and changed the way we live, and definitely for the better. But what is Uber's significance in this transformation? How did it become the evident leader in this race? Read along to find out!
FOLLOW THE YELLOW TRAIL
Horse-drawn for-hire hackney carriages and hansom cabs used to rule the streets of Paris and London till 1834. But the neighs of horses were soon replaced by the horns of taxi cabs when the modern taxi meter was invented. By 1950, more than 12,000 taxicabs serviced New York. And as time passed, these vehicles spread like wildfire across the world. It was in 1958 that these iconic yellow ambassadors made an appearance in Kolkata, India. They quickly gained popularity and were crowned the ‘King of Roads’.
All was well until the beginning of a customer-centric economy when people began to yearn for a more personalised experience. Taxis did not fit into this scenario. No doubt the taxi service was way better than using public transport but the question was "can something outdo this too?" And the start of ridesourcing services answered in the affirmative.
THE NEW HOTSHOT IN TOWN
The advent of Uber significantly transformed the transportation landscape. Instead of standing on the curbside and flailing your hand in frustration, you can now get a ride by simply tapping on your phone.
Uber started when Travis Kalanick and Garrett Camp found themselves stuck in Paris on a snowy evening, unable to find a taxi, and decided to find a solution to this universal problem. The journey from this humble beginning in 2009 to a market leader has been quite rapid. Uber has seen its fair share of CEOs, from Ryan Graves and Travis Kalanic to Dara Khosrowshahi. Almost ten years later, with 75 million global customers and 3 million dedicated drivers in 83 countries, Uber has made black the new yellow by being a legitimate game-changer in the ride-sharing services market.
NAVIGATING THE SUCCESS
To put it simply, uber is an app that connects drivers with riders by using a multi-sided platform business model. Uber focuses predominantly on the customers and their satisfaction, which is its major differentiator from traditional taxis. To book a ride, all you need to do is enter your current location and the desired destination, and the platform will provide you with multiple vehicle options, from auto rickshaws and motorcycles to sedans and SUVs. Uber, like other ride-sourcing services, aims to have an organized driver base, which is again a revolutionizing aspect. As soon as you request a ride, the platform informs the nearby available drivers who then have the option to accept or decline your request, based on their convenience.
Avoiding the taximeter, the ride fare is calculated by an Uber algorithm, considering the distance travelled, elapsed time, and the fuel used. On Uber’s side of the coin, the total value of each ride includes the driver’s payment, fees, taxes, and company commission. Being a globally successful company makes it an attractive platform for brand promotions, adding to the revenue.
THE ROAD TO SUCCESS
Born in 2009, Uber started as a luxury ride with co-founder Camp's vision. By 2012, it democratized the service with UberX, letting regular cars join the fleet. Innovation continued with carpooling in 2014, followed by Uber Eats for food delivery (though later eaten by Zomato in India). In 2019, Uber dabbled in temporary jobs with Uber Works before sunsetting it in 2020. In the early years uber spent virtually no money on marketing, relying instead on word of mouth to spread.
Uber has not only captured but created its market.
A fun case story, in the initial stages of Uber, Uber drivers need not have any commercial registration, special licensing, or regular checks as traditional taxis require. All these expenses were curbed and Uber was able to charge a comparatively cheaper fare. But were they playing fair? Ditching regulations meant ethical concerns and legal clashes. "We're a tech company, not a taxi!" They argued, winning some courts over. This strategy did not work in all countries. Uber cooperated with the legal norms to some extent. Gradually Uber had to invest to compete with other players. Uber is today operating in over 70 countries and more than 10,000 cities.
WHO ELSE IS ON THE RACE TRACK?
Late at a party? Does the night owl need a ride? Uber's your guide,
From dancing 'til dawn to catching the dawn, on a sunny or a windy, Uber’s your buddy.
Looking at its competitors, Lyft is a competitor of Uber at a global level. However, Lyft only has its operations in the US and Canada while Uber is currently operating in 70 countries and over 10,500 cities worldwide. Uber, king of the ride-hailing castle with a 68% crown, and Lyft, its 31% squire, both galloped towards Wall Street in December 2018. While Uber, valued at a jaw-dropping $120 billion, secured its royal IPO, Lyft aimed for a $2 billion treasure chest.
Some other competitors are trying to fit themselves into the market that Uber has established. Ola is an Indian startup which is inspired by Uber. Ola has more revenue than Uber in India. Ola's ride-hailing sales (cab bookings) climbed 63% to Rs 1,987 crore, whereas Uber's revenues in the business grew by 75% to Rs 678 crore. Ola is like a local expert knowing the Indian market well. Uber, on the other hand, is an experienced traveller on a global scale.
Finishing Point
Uber's success highlights the potential of technology to streamline industries and empower users. It brings an end to the negotiations that we had to deal with the local taxi drivers. However, we cannot fully depend on Uber or such technologies because of unpredictable wait times and surge pricing. In many tier 2 and 3 cities, local drivers own the kingdom.
Uber became a company that brought major disruption to the commendable technology. Uber came out of the blue and splashed yellow all around. You need not be the navigator of your driver anymore, LET THE UBER NAVIGATE THE CHAOS.
SOURCES
Uber
Business Insider
Investopedia
Authors: Anshul Sethi and Yashika Choudhary
Illustration: Saket Malhotra