Uber – On-demand business model
Gone are those days, near or far, we pre-book a cab may be a week or a day in advance. It was a no easy deal to take a cab and they were not pocket friendly as well. However with the dawn of digital revolution, technology has been hooked to support our day to lives. Uber, the trailblazer of such on-demand businesses with a valuation of at-least $1 billion, has definitely exploited the power of technology into bits to benefit the common people to have an easy go ride. It connects passengers with taxi drivers who own their cars.
Currently, Uber has unveiled cab service in 200 cities covering 55 countries. Uber with an idea to fatten its business and to treat its happy customers better, has stationed an option as to call an ice-cream truck to buy an ice-cream or even a helicopter for a ride – How cool is that!!
Features that Outsmart Uber’s Business
- The user can also track the driver’s location.
- The driver can either accept or reject the ride.
- Once the driver accepts the ride, the driver’s information is sent through SMS to the user with the Expected Time of Arrival (ETA).
- The User needs a Smartphone with an internet connection to place a cab request through Uber app.
- The driver can also use maps to track the exact location of the user.
- Uber gets involved with the payment procedure.
- Payment can be either done through ready cash (in some countries like India) while the users are also given an option to add money in the Uber wallet – which is then deducted once the ride is over.
Who are Uber’s Customers?
- They do not have their own a car
- They are not comfortable driving to a party with their own car
- They – who want cheap cabs with a doorstep pickup
- They like to travel at ease
1 million rides a day – that equates to fat numbers
The Trio Combo defines the 1 Million Number
It is not just the business model that is on-demand but its revenue model as well that gives an equal hand to Uber’s success story. The 3 unique yet a simple combo can be explained as follows:
Rates Priced Depending on the Cab Models – Uber provides a lavish range of cabs to help various segment of people. Right from cost-efficient hatchbacks to luxury SUV lines, Uber is armed with a fleet of cabs that caters the needs of all types of users.
Price Surge Technique – Here comes the twist – cab fares are varied in accordance to the demand. With an increase in demand, there is an instant rise in price/mile. The price is hooked to a simple math technique – Surcharges depend on the number of requests made by willing passengers and the number of cab drivers available at the locality.
Other transportation Service – Cab service is not just the limit. Uber transport service has been beefed up in some countries with a lavish spread of transport service that accommodates boats, motorcycles and helicopters to the list. To mention a few such countries – Paris has seen a launch of Uber motorcycle pickup, while San Francisco gets a delivery service option from Uber. Brownie points for ice-cream lovers in few cities – people are pampered with ice-cream truck delivery service.
Uber took its avatar, six years ago to help freelance drivers and customers who were looking for cheap cabs to stand a liaison between the passenger and taxi driver, while it takes a percentage of the fee from the taxi ride fare.
Technology Overtakes Convention
A look back at few decades when people were feeling inconvenient with sky rocketing cab rates and the wait time to mention was beyond tolerance with local taxis. The scarcity of cab drivers and with no control over the rates while people were left with no alternative option gave birth to Uber, which revolutionized the cab industry overlapping technology over convention.
The Uber launch
Uber was launched as a solution to overcome the existing taxi booking problem. It outsourced and connected freelance cab drivers and made them available to the users even to the remotest part of the globe through a mobile app. While the launch happened in 2010 unraveling enormous benefits and values to meet the needs of people of various segments. A single tap – and there you go to find a solution better than the conventional taxi booking method.
Throwing the market presence of a new-bie service or product is not easy as a pie. Uber handled the launch with so much care – technology was the hype about Uber and San Francisco – the habitat of tech savvies, is where Uber unveiled its launch. So Uber was very much careful in choosing the crowd with the aim to be the people’s choice. Uber got access to its initial customers through social media marketing and other marketing techniques online.
Free rides, flat discounted rates which made users to look at Uber as a jaw-dropping tech creation and convinced users to try the new service in the city. Uber made most of the cabs available at eye-catching venues that wooed willing customers and induced them to travel in style to their doorstep. The hunt for customers didn’t cease, the next in the list were customers from the corporate sector – while Uber helped them save their time.
Initial Customers Share their Experience
Initial customers were impressed by their cab ride experience and they are now regular customers as well. The early adopters shared their experience to their families and friends and by this way Uber has embarked its market presence to a global reach as people’s favorite.
Uber Deploys the Maximum of Technology
Uber formulated a simple business hack – buckled freelance drivers over the Smartphone network to define the business equation. The back room boys have deployed technology to help customers get connected to the drivers with just a few clicks.
Factors Connecting the Dots
Simple yet effective on the business deal, helping passengers to opt for a hassle free cab ride to their destination at high standards and low costs – Uber has been the most sought after option for cab owners and customers for each other’s mutual benefits. Some of the factors that bankrolls to set Uber on the rise amidst the on-demand business statures are
- Registered Users/Passengers
- Taxi Drivers
- Profit to the driver’s pocket
- Profit to Uber’s pocket
Cab Driver – A cab owner with a driving license should be right person to work for the brand Uber. Upon screening the driver’s details, he would be enrolled in the Uber system and would be given a Smartphone to get connected to the customers.
Registered Users – Users who are willing to travel by Uber-enrolled cab drivers are to install the Uber app on their smart phones and get registered. With a single click on the app, you get to set your ride in a wink of an eye. The taxi can be tracked through the Uber app as it approaches.
Taxi Fare – The type of fare is fixed depending on the type of cars – minimum pricing for hatchbacks, premium pricing for premium cars and surcharges during peak hours when there is a high demand of cabs in that locality.
Payment Options – Users always stay intact with businesses that make them convenient to settle down with convenience. So they are with payment options, users can go on cashless ride by adding money in the Uber wallet, while the ride fare is deducted from the wallet. If the user is good to pay hot cash to the driver in hand, Uber makes the users stay comfortable too.
Profits Shared – Well, it’s the driver’s own car and how does Uber get paid for connecting the driver and the user!! The math is here, with 80% of the ride fare to the driver and Uber gets the 20% of the ride fare. However, the stats reveal that even after 20% deduction, drivers are paid better than the conventional cab services and other alternatives.
The 5 Step Business Model
Step 1 (Cab Request): Establishing a space to demand is the first step to Uber’s success. Users Request a cab through Smartphone Uber app that schedules the cab pickup.
Step 2 (Driver matching): While the request is place by the user, the nearest cab driver gets the alert with the user’s details. If the driver rejects the request, the details are then sent to the other driver in that locality.
Step 3 (Customer Ride): ETA of the cab is shown in the user’s app; the customer can also track the cab as well. Once the customer passenger starts the ride, the meter is on to calculate the distance of travel.
Step 4 (Customer Rating): Once the ride is over, the customer is given an n option to rate the driver through the app. This is a critical component that adds a star value to Uber’s Business Model as it lets the users know about the driver prior to booking while it also helps to build trust on the service as well.
Step 5 (Payment): Once the cab trip is over, a message pops out in the user’s app. The user then pays the amount through cash or the money is deducted from the prepaid wallet.
Customers who gave hand to Uber’s Fortune
- Party lovers – People who went to parties, clubs and events
- Business travelers
- Customers demand for doorstep cab during bad weather
- Late night travel
- No long waiting hours to get a taxi
- Discounts, Deals and Offers at regular intervals
- Ride fare cheaper that the conventional alternatives
- Customized travel
- Definite prices for certain locations
- Extra money to the driver’s pocket
- Working hours are flexible with no strict timings to be followed
- Quick and instant payment
- Driving a hobby?? – Earn while you enjoy your hobby
- Drivers who are just logged in without any request are still paid
Uber Flexible to Serve Vast Customer Segments
Uber looks into a bigger picture – it is well organized to cater a mammoth customer segments, giving it’s best to each and every user. Customers are pampered with options – From Uber X to Uber SUV and Uber Taxis to Uber Black.
Uber patched up with companies to benefit corporate professionals to travel to their work destination and vice versa. In some countries, Uber caters customers who are willing to send and pick up their kids through Uber cabs.
With 30% to 40% of the rides opted by senior citizens, Uber has inclined to target senior citizens with specific salient features that would cater their needs and make them comfortable while they travel.
Key Facts to Ponder from Uber Business Model
- Be a mediator and do not opt for ownership business model.
- Look into common man’s problem – Venture it with a solution with technology in place
- Attract the initial users with offers and discounts. Users are to be treated royal. They are one form of advertisers – your brand gets known to the world through existing users and there you grow.
- Treat your stakeholders well as they are the main element of success.
- Look into a step by step expansion. Stack all the business plans and implement it one by one as you grow better and better.
- Make use of the opportunity that creates space for users to choose only you out of the alternatives with fair deals and pricing.
Native IOS App for Driver and Rider
Native Android App for Driver and Rider
Mobile Responsive Front End Website
God’s Eye – Real Time GPS Tracking
Promo Code Management
Book For Later with Dispatch
Google Map Integration
Driver Registration Facility in Website
Automatic Fare Estimate & Calculation
Stripe Payment Gateway for Credit Cards
In-app notifications to rider and driver
Facebook Signup and Signin Facility
Pay by Cash option
Basic Reskin / Personalized branding for Web & Mobile App
Emergency Contact Sharing
Book a Ride with destination
Favourite Ride Option for the Rider
Dedicated Support via www.basecamp.com
30 mins Skype Support Per Week
Single domain license with 100% access to source code
One time Free Server Installation
Separate Dashboard for Drivers
Trip History details
Social Sharing Feature
Schedule Booking Feature for Rider
Review and Rating
SEO Settings in Website
SEO Friendly front end Website
User Friendly Admin Panels with User Privileges
Accept / Decline trip request
Call Rider Option
Easy Commission Tracking Management in admin
Free App Installation Service
Free Support Period2 Months2 Months6 Months
Free Updates for the bugs within the feature list provided2 Months2 Months6 Months