- Geekmaster
- 2021-12-14 09:55:05
- 20 minute(s)
Five Key Business Lessons You Should Bear In Mind from Uber
Uber is a phenomenon that has disrupted multiple industries all at once. Its practices have made it one of the most valuable and well-known companies in the world. Despite its success, it has suffered some setbacks, but any business owner can learn from those mistakes. Have you always wondered about the success of Uber? This post is just for you to know the five key business lessons to be learnt from Uber!
Uber revolutionized the public transportation industry, and forever transformed the way it does business.
Uber has redefined the public transportation category and they’ve made it about what customers care about getting there safe, a clean car, a courteous driver, someone who speaks your language, and the ease of doing business right at the tip of your hands, with your smartphone. They kicked taxi and limousine companies to the curb, and while there are many other copycat companies who have entered the marketplace, Uber is still the gold standard.
Uber was founded in San Francisco, California in 2009.
It started as a transportation network company that utilized licensed taxi drivers for its ridesharing services. The idea behind the business was to integrate a mobile application into its practices to connect passengers with drivers with vehicles for hire. By looking at how Uber transformed the old way of doing business, from hailing a taxi to a newer, easier, better way that is not even considered the new way, but rather, the norm and expectation, you can learn how to transform your business, and capture your elusive leadership position.
There is plenty of business lessons a new startup can learn from Uber.
The general habit of entrepreneurs is to look at successful businesses and founders and marvel at their achievements. Seldom does anyone take away any real lessons from the mammoth success of such companies For entrepreneurs, learning and absorbing marketing and business lessons is vital. Uber is a good point to start talking about entrepreneurship and startups because it fundamentally changed the way people approach a certain part of their life.
Have you ever wondered about how Uber has become successful? If you plan on knowing more about it, read on!
Uber has taken the transport industry by storm and is continuing to expand into new cities at a rapid pace. With an estimated value of $70+ billion, it is clear that there are a number of business lessons we can take away from its global success story — see below for our top five.
Uber Lesson #1: Find Genuine Solutions to Real World Problems
Every business exists to serve a need for its customers. However, most companies employ the same limited set of business models — which are rarely enough to solve all the different challenges customers face. Companies that provide unique services and offer better solutions will grow much more quickly. Uber has demonstrated this by addressing many of the problems that customers have faced with traditional cab companies.
Customers give their business to the companies that solve the problems they’re facing.
Make it your priority to provide genuine solutions to problems your competitors have overlooked. If there’s only one thing that startups learn from Uber it should be this: the only way to grow rapidly is by offering a product or service that’s unparalleled by any of its current competitors. Customers will happily work with a company that offers something better — even if it’s more expensive — but that company needs to be passionate and clearly communicate the benefits of its services over competitors.
If you’re someone building a startup, you might be hearing people say, ‘Your product must solve a problem.’ Though clichéd, the statement is true.
Every successful business must solve a fundamental problem. Google solved a problem. Amazon solved a problem. And yet, there is one little thing many people miss. Before a problem is solved, it is not apparent and clear. Before Google came along, there were no internet campaigns speaking of the importance. Everyone was happy with Yahoo and AltaVista. It was only after people used Google did they realize how much more comfortable their life could be with Google. The same is true for Amazon. People were not on the street demanding that a website deliver books to their doorstep. And yet, it is difficult to imagine life now without a company like Amazon. Uber is the same. Before it came along, people used public and private transportation to get where they need to. If they wanted to take a cab, they’d book one through the many independent cab companies. The companies would overcharge, but no one would really complain.
Someone has saidThis is how all great inventions and startup businesses are born — from a problem or need.
From electricity, to the telephone, to the Internet, and more recently to PayPal and Facebook, great businesses are built on big problems. The desire to change the world drives successful entrepreneurs. They are the ones who love the journey more than the destination. Want to experience fast growth and immediate success as a startup? Then you’ve got to bring something new to the table! Sure, businesses can do well following tried and true principles within their industries. But in this competitive global climate, it takes something truly unique, truly big, to make customers sit up and take notice.
The purpose of a business is to create a customer, declared Peter Drucker.
How do you create a customer? You provide something — a service, a product, a solution — (referred to as the Product in the Marketing Mix) they need AND want. Creating a solution before identifying the problem can have devastating consequences. Even if you’re convinced that you have the next best idea ever; it is a good idea to validate there is a need in the market. For your organization to position itself and develop a compelling value proposition, you must be able to clearly articulate the problem and understand how you are better and different from alternatives, including the alternative of doing nothing.
Uber Lesson #2: Experience Matters the Most
Its apps are developed and designed to make them extremely user-friendly for the users (both the rider and the driver). The user experience is key when it comes to app-based business. Uber has received a user rating of 4.4 out of 5, on average based on 84,57,610 total reviews on the Play Store and that is something that Uber is constantly working on, to be the number one.
Customer service is the main differentiator. We’ve all sat in a traditional taxi and heard the driver complaining about how hard business is.
Uber is a total experience, not a cab ride. You’re slayed by the technology, your ease of doing business is remarkable, the service is friendly and helpful, the car is clean, your trip is safe, the transfer of payment is seamless, everything is totally reliable, and at the end you rate your driver and the experience. Its beyond brilliant, its dominant. How 5-star is your customer experience? In a world where there are many options, a bad experience for one product is detrimental. If Amazon disappoints its customers, it stands to lose them to Flipkart. The experience a customer has while using a product can define its destiny.
Think about it. There are only a few restaurants in every city that are really famous. That doesn’t mean that the other restaurants are bad.
The best restaurants realize that they are not simply in the business of serving food, but in the business of fine dining. Fine dining and serving food are two different things. Any restaurant can serve food. All one needs is a kitchen and a few tables. Fine dining is challenging. The people arriving at the restaurant must feel their stay at the restaurant is special. Little things like lighting, internal décor, cordial staff, and ambiance make the most difference in making a restaurant belong to the fine dining business. Before working a product, entrepreneurs at startups must ask themselves: what is my customer feeling? Even if the feeling is something as simple as comfort or ease, an entrepreneur must make sure such a feeling as intensified at every turn.
A positive customer experience is crucial to the success of your business because a happy customer is one who is likely to become a loyal customer who can help you boost revenue.
The best marketing money can buy is a customer who will promote your business for you — one who’s loyal to your company, promotes your business through word-of-mouth marketing, and advocates for your brand and product or service. Many noted the success of Uber came from the friendly and quality experience they received from taking part in the services, and how it stacked up better than its competition. Uber also noted that most of the growth associated with the business comes from word of mouth by the customers who take part in utilizing the services offered. The ease of pressing a button and a car appearing within minutes was, and still is amazing. Even celebrities have taken part of the Uber experience noting that the service offers an amazing experience to users.
Your brand’s reputation is just as important — if not even more important — than the products or services you offer.
So, creating a great customer experience doesn’t just make generally good business sense, it is the key to driving long-term business growth. A great customer experience, one that’s not only rooted in the quality of the products and services you offer but also in how you invite customers to engage with your brand across multiple touch points, can generate great customer feedback via positive word-of-mouth (WOM) that can propel your brand in ways you never imagined. That’s why providing a truly stellar customer experience is a valuable — and dare we say, essential — investment in the future success of your business. In many ways, it’s the key to driving long-term customer satisfaction, happiness, retention, loyalty, and advocacy.
Uber Lesson #3: Always Think Ahead
Self-driving cars are the future and sooner or later they’re going to take over. Uber has already anticipated this and they signed a deal with Volvo to sell them thousands of self-driving cars starting in 2019. This is the sort of vision any successful company needs. They have to be able to look at things that have yet to even become a thing. When self-driving cars do appear Uber will be able to immediately take advantage of this revolution. It does mean you must take a gamble, but when things like that pay off they really do pay off.
Over the centuries, many philosophers have pointed out that change is the only constant in life.
That position couldn’t be any more true for growing business startups — especially in the 21st century. Capitalism is a constantly evolving ecosystem, which means that companies need to respond to changing customer expectations, new technology and regulatory uncertainty. This is particularly true for companies like Uber that operate in nontraditional markets like the sharing economy, as consumer preferences are radically different than previous generations and because many government agencies feel compelled to create new laws addressing any problems that come to their attention.
Uber speed and ability to horizontally grow its markets and expand its product line represents a meaningful competitive advantage.
In rapidly changing times, this can turn in to a meaningful competitive advantage. The market for ride-sharing around the world is growing and changing so rapidly, that numerous market and non-market forces are coming into play at lightning speed. In addition moving fast to reach liquidity, Uber uses speed in innovation to quickly test, iterate and add new services. Examples include its bear hug embrace with Carnegie Mellon (and others) on autonomous self-driving cars, finding resourceful ways to accept cash payments in India, forging innovative partnerships with Capital One, Starwood, Spotify et al, and launching Uber Eats, Uber Fresh, and other services.
When Uber first began, it offered a simple transport experience in only one city — San Francisco.
To date, Uber operates in more than 300 cities around the world as it continues to innovate and grow. It also offers a variety of transport options to suit the style and budget of the rider. These range from Uber X, which uses everyday cars and is marketed as ‘cheaper than a taxi’, all the way to Uber Lux, boasting ‘the finest cars with prices to match’. Despite business going very well, Uber has not become complacent and has continued to make innovation a priority.
While revolutionary changes often spring to mind first, the truth is that evolutionary changes can also move the needle significantly for an organization — and can be achieved more frequently with far less expenditure and effort.
Ask yourself: What other ways could you be providing value for your audience? While many firms tend to focus on single business models or solutions, there are often many ways to reuse resources in clever combinations, as well as more alternative approaches to doing business that you could be capitalizing on. So when it comes to planning an innovation strategy, in addition to thinking big, don’t forget to make a point to think small as well. As each of the following insights and strategies for fueling creativity and forward momentum prove, all it often takes to go from stuck to success is just a passing change in perspective.
Uber Lesson #4: Monopoly is Not a Bad Word
One of the major concerns among platforms that are into multiple sides is to reach the critical mass and entrepreneurs work hard to get to this point. Once the critical mass is reached, it means that the customers of a startup are not denied of any of their services and the workforce of the startup is engaged above a pre-decided level. When this is attained, a company is said to have attained its critical mass.
By extension, and discussed extensively in Peter Thiel’s Zero to One, monopoly is an interesting concept if entrepreneurs study it carefully.
In the book, Thiel explains that the ideal stage a startup must seek to reach is that of a monopoly. Generally, ‘monopoly’ is considered a bad word in the market. It is considered anti-competition, which it is by definition. And yet, from a startup’s perspective, becoming a monopoly is the only way to develop an ultra-successful business. Uber might not be a monopoly, but the level of awareness it has managed to generate amongst the general public exhibits similar traits to how a monopoly behaves. Having a monopoly basically means a startup can put all its effort into taking the company forward. Many startups fail because they enter highly competitive fields. This means they use all their resources to beat the competition, instead of growing the company internally and ensuring unfettered growth.
While beginning the journey of a startup, it might be difficult to envisage an area or field where a monopoly can be generated.
However, given enough time, an entrepreneur can find such an area in the market. For instance, the best products Google has to offer are in fields where it has no competition. Thus, it can use it resources to keep improving its products while trying to find other fields to enter. Google also understands the value of being the only real player in wide markets. A startup must not be good at competing. Instead, it should be good at finding areas where there is little to no competition. To build a monopoly, you need vertical progress, the act of creating something that wasn’t there before. A monopoly built upon the fastest car will never exist, but a monopoly built upon the first flying car may very well become reality.
Someone has said
Expanding into new markets is, obviously, one of the most effective ways to grow a business.
Startups need to consider every possible avenue for expansion, which may include penetrating new markets and/or regions, using demand generation marketing tactics, growing a base of repeat customers and/or expanding what your service entails. Uber has grown by focusing on all three of these strategies. While it’s never a good idea to grow into markets where expenses exceed revenue, Uber recognizes the value in expanding into markets with more marginal growth opportunities. For instance, the company has focused on growing their business in China even though potential revenue is limited, simply because they want to boost their company’s reputation across the globe.
Never being one to shy away from taking on new opportunities, Uber has recently expanded what their service offers.
They took their already available tracking technology and packaged it together as a service for commercial delivery teams called Uber Fleet. This app works as a project management and data tracking tool in the SaaS industry. It’s pretty clear they have no limits when you consider their high involvement with latest technology that most other businesses haven’t yet touched. Driverless cars, flying taxis, the list could most certainly go on. To build a modern monopoly you need to seize these opportunities. Said another way, what you want to build is a creative monopoly, one that does not overtake and strangle an existing market, but rather creates an entirely new one all for itself.
Uber Lesson #5: Make People Your Priority
A study from Benenson Strategy Group attributes Uber’s growth to its flexibility. Since the company’s infrastructure is more limited, it doesn’t require the same amount of manpower on hand. As a result, Uber can offer more flexible schedules to employees, which are attractive to people that need additional streams of income. Many Uber employees like they idea that they can make money on the side while working a regular job.
In June 2017 its board of directors unanimously approved a set of recommendations by Eric Holder to dramatically revamp the ridesharing giant’s troubled management and culture.
Uber’s chief human resources officer Liane Hornsey sent an email to the staff to address the changes that will be made. Responding to the report, Uber hired Bo Young Lee to be its first-ever chief diversity and inclusion officer. Since then, company leaders are specifically assessed on their efforts to build an inclusive, happy, and diverse team. From focused efforts to improve upon diversity and inclusion, to working around the new cultural norms, Uber has been driving this change from all directions.
As a frequent customer of Uber, one thing which stands out most is that the business model supports its people.
Rather than the standard 50/50 split of taxi fares in Australia, Uber gives its drivers 80% of the fare, keeping 20% for themselves. This profit margin is not standard for businesses — as we know, most retail stores mark-up at least 50% on products. Putting its people first has certainly paid off, as Uber has no shortage of both staff and customers. For employees, the breakneck pace they constantly face can be grueling, they admit, but they say Uber offers unique opportunities: rocket ship growth, the chance to solve real-world problems and a culture that frees them to experiment with radical solutions in a burgeoning field.
Uber uses bottom-up feedback and employee resource groups to inform its organisational culture, helping to create a sense of belonging for its employees across more than 60 countries worldwide.
Uber’s employee resource groups are like-minded employees and allies which can come together. The organization has approximately 12 groups in total, including Women of Uber and Uber Pride, for LGBT staff and allies. Uber’s diversity and inclusion strategy, which it started building few years ago, has five strands in total. Drivers of its approach include empowering managers to be inclusive leaders, making a difference in the societies employees serve, and using qualitative and quantitative data to understand employees’ motivations; this in turn is used for decision-making around HR strategy and benefits.
In order to be a people-first culture, you need to actually care about your employees.
Truly care about who they are as individuals, why they choose to spend a big part of their day working at your company, why you trust them to represent you to the external world, and their uniqueness. Your current employees may not be that critical in the success of your company – as a whole. Yes, key talent stands out and a few other people and players may be critically important, but if your company’s strategy does not value each cog in the wheel — each and every employee who works there in the same regard, then this isn’t a core value for your company.
Wrapping Up
Uber is one of the most valuable companies in the world. Its success, driven by its ability to help people book cabs with the ease of a mobile app, is another indicator of how insanely valuable companies can be built on simple ideas. Just as Amazon changed the way people shop and Facebook changed the way people interact online, Uber changed the way people commute. Places in major cities that were disconnected from public transport were brought into the fold by its deep-rooted reach.
The company has made a few blunders along the way, but for the most part, Uber has created an ingenious model that every startup founder should strive to learn from.
If your own growth feels stalled, look to Uber for the inspiration needed to drive your own business to new heights. It’s important to be able to look into the workings of Uber and to apply those same principles and strategies to your own business. It doesn’t matter what industry you’re in because these same principles still apply.
Which is why it’s important to pay attention to big trends — they create new opportunities for clever entrepreneurs.
With a little creative thought, you can look around and find ways to build lucrative businesses. The internet gave way to the world wide web. That attracted millions of people to various sites and opened the floodgates for advertisers, ecommerce, affiliates, and many more opportunities for everyday people to become entrepreneurs.
Be an authority in your industry and make your mark just like Uber did. It could make your dreams come true!
What do you think? Can you suggest any other business lessons which we can learn from Uber? I’m interested to hear what you admire most and why. Comment below and share your views.
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