Uber started as a ride service in San Francisco in 2009 and has since blown into 400 cities in 68 countries, rolling over local taxi companies with its very cheap, very fast, and (particularly for the 20s-30s age group) very cool service.
Now, a long list of start-ups are copying the model, hoping to be the Uber of doctors, veterinarians, florists, dog walkers, barbers, car washers and more. Your line of business may be next to get “Uber-ed” – and for that matter, so may your customers, expecting levels of service and price that are hard to meet.
Here’s a quick look at what makes Uber run:
Cool mobile app
Uber’s hockey-stick growth coincided with the growth of smart mobile phones, particularly among young adults, Uber’s most loyal base. Customers interact with the service exclusively through the app—and the company puts a lot of effort into making it a very satisfying experience. For instance, a customer who orders a ride immediately sees a picture of the driver and car and position on a map.
Super fast service
Uber cars reliably come in minutes in big cities, while waits for traditional taxis may be uncertain. How does Uber do it? First understand the staffing model: Uber doesn’t hire drivers; it calls itself a platform to connect riders to independent contractors. The biggest group drives for the lowest cost UberX service and they aren’t professionals, just regular folks using their own cars part-time—hence there are plenty of them available at any time.
Cheaper pricing, disclosed up front
Uber aims to undercut local taxi fares on UberX. The app shows the fare before the customer makes the order. All payment goes through the customer’s credit card on file so no money required at the end of the ride and Uber discourages tips (though drivers do accept them). On the other hand, at peak times, higher “surge pricing” kicks in.
Human face to the company
A big part of the appeal – and the marketing – is the UberX drivers operating their own cars. They could be your friends dropping you off somewhere. You can see the whole phenomenon just by watching this video, shot with a dash cam by an Uber driver who got all his fares to sing along to The Weekend’s “Can’t Feel My Face”. “This is the exact Uber ride I was expecting!” one young woman enthuses in the video. Uber reinforces this peer-to-peer atmosphere with a two-way rating system: Riders rate the drivers on the app but drivers also rate the riders (which supposedly could make it tough for an ornery rider to get future lifts).
Smart, surprising promotions
While Uber benefits from huge word of mouth advertising, particularly among the target young adult demo, it keeps up its image with fun stunts. Example: Drivers in 50 cities delivered kittens to Uber customers at work for 15 minutes of playtime. The company also offers more conventional promotions, like free rides for referring new customers.
Let’s be clear: Uber’s ride has not been one long dash-cam sing-along. California drivers sued Uber, claiming employee status, and the company has been tied up in more legal struggles with taxi commissions. Passengers have accused Uber drivers of assaulting them. Surge pricing can make the company look like a price gouger: In December, 2014, riders trying to escape a hostage crisis in Sydney were reportedly charged quadruple the normal fares (the company quickly offered free rides).
You’re the best judge of whether an Uber-style disrupter could hit your business with faster/cheaper/contract labor competition. Regardless, here are two action items for right now:
Uber shows a new certainty of local marketing: Customers will increasingly use their mobile devices as their do-it-all tool for finding and connecting with local businesses. So get your mobile presence in order. We have some advice about that here:
Focus on customers
It could come down to loyalty vs. convenience in the minds of your customers if you’re up against an Uber-like competitor. Now is the time to double down on customer relationship management. We have some advice on that, too: