Match-maker in mobility
The growth of ride-sharing service Uber has been remarkable, to say the least. From Argentina and Azerbaijan to Uruguay and the United States, Uber is perhaps the first word people think of when they think of the ‘sharing economy.’ It is one of the few companies in this space to have successfully expanded its offerings beyond the original ride-sharing platform, as evidenced by Uber Eats, the restaurant-meal delivery service, and other Uber-oriented services.
A variety of ways to measure success
As the company has grown, the kinds of metrics it uses to measure success or failure have changed dramatically. In the early days, the company struggled to bridge the gap between the high number of app downloads and the lower number of rides booked. Streamlining that process became a priority, with success measured by the number of orders relative to downloads.
With expansion into other markets (the company is now in nearly 800 cities worldwide), management turned its attention to the number of cities in operation. And then to the number of rides per city. With Uber Eats, which is constrained by the locations of the restaurants on its list, the key is the number of people who have access to the service and who can get their delivery in a timely manner.
Today, measuring Uber’s success is more complicated. Much depends on the market in question. “How we think about a market depends on its size and maturity,” says Andrew Byrne, the head of Public Policy for Europe, the Middle East and Africa (EMEA). With some markets, getting people to use the app to book rides is the key, with others it’s the number of rides per day (or even hour). Others still might be measured relative to ‘curb space,’ which is the availability of pick-up and drop-off spaces for Uber drivers.
Trust and transparency
From the beginning, Uber recognized that it would have to overcome the natural hesitancy people have about hoping into a private, unregulated car with a total stranger. It took time to build trust and today, the company sees this as a potential competitive advantage. “We’re trying to overcome the trust deficit with a collaborative approach,” Byrne says. “We also take the feedback we collect very seriously.”
Uber builds trust as it builds its brand. To work through the company, vehicles have to be of high quality and certified safe.
Transparency extends to Uber drivers. After focusing for the first three-to-four years on the rider experience, the company turned its attention to making drivers more active participants in the platform. In fact, Byrne credits Uber’s dispatching system with winning over many former taxi drivers who had been unsatisfied with the way routes and rides were allocated by that industry’s dispatchers. Sweetened commission rates and other benefits have answered critics and helped maintain a strong stable of drivers. A driver app debuted in Britain in 2018. It helps Uber drivers track earnings, calculate drive times, and avoid speeding.
Furthermore, to keep lines of communication open with drivers, the company has established panels that allow drivers to express their concerns to the company.
A wider platform
While the brand Uber is still primarily identified as a ride-sharing app, Uber Eats is quickly gaining recognition. The evolution was natural one, says Byrne. “We realized early on that we had a network of people moving around the city and customers who knew our app as a way to summon a car,” he says. “So why not put take-out food in that car?”
“It got us thinking about who we are and what kinds of unique offerings we could make,” says Byrne. “Are we a transportation company? Are we a technology company? Are we a customer-service company?” After much consideration, it was concluded that Uber is a matching company. That is, its competency lies in matching people (and things) that need a ride with drivers who have empty seats.
Hence Uber Pool, which is the same as the flagship Uber service except that drivers may have more than one passenger along the same (or similar) route. Because the ride is shared with other passengers, Uber Pool is naturally less expensive than the individualized service. Also JUMP, an Uber electric bike-sharing company.
With low barriers to entry, competition in the ride-sharing space is fierce. Uber dedicates resources to developing and improving its platforms. It has found that small changes can make a difference. Customer retention can vary, for example, depending on when, during the car-summoning process, the customer learns the price of their potential upcoming ride.
Keeping ahead of the competition also means finding new platforms to meet customer needs. Uber Eats is one good example. The company is also looking at new services to make getting around easier. Bicycle- and scooter-sharing programs are natural extensions of this goal. The future may well see Uber as a player in flying taxi services. The brand extension is called Uber Elevate and it expects to roll out vehicles (designed and built by Textron) as early as 2023. Using electric or hybrid engines, these flying taxis (or VTOLs, for vertical take-off and landing) can travel at up to 240 kilometers per hour and serve both local and inter-urban markets.
Regulation as advantage
Regulations also provide an opportunity for advantage. Uber watches and listens as the public and regulators discuss issues around the ride sharing industry and tries to be the earliest adopters of regulations. “We want to be the first because that means being able to comply on our own terms and in a way that we can control,” says Byrne.
The aforementioned driver app was devised in part to address concerns raised by the London transport authority, which had temporarily suspended the company’s right to operate in the city. Other jurisdictions have clashed with Uber, over licensing, rate structures, labor practices, taxation, insurance, among other issues. Despite vigorous protests from licensed taxi drivers, Uber prevailed in most cases, often by reaching a compromise with authorities.
Making cities smarter
The future for Uber also includes playing a role in cities’ adoption of smart digital strategies. To be sure, transportation is one of the key areas of interest for cities as they seek digital solutions to problems, including ever-increasing commute times and road-choking congestion. Byrne acknowledges that while the company is keenly interested in smart-city developments, it has only begun to scratch the surface of understanding the kind of role it might play.
Given the traditionally regulated nature of the public transportation industry, Uber’s continued growth in that area will involve relations with regulators and governing bodies. This might include partnering with other transit agencies to share and analyze data that can help planners design and optimize bus routes or decide where to place Uber pick-up and/or drop-off points. As the age of driverless vehicles draws closer, input from companies like Uber (which will account for a significant portion of these cars) will be essential for municipalities and city planners determining the future rules of the roads.