Uber – On-demand business model
Gone are those days, near or far, we pre-book a cab maybe a week or a day in advance. It was not an easy deal to take a taxi, and they were not pocket-friendly as well. However, with the dawn of the digital revolution, technology has been hooked to support our day to day lives. Uber, the trailblazer of such on-demand businesses with a valuation of at least $91billion, has exploited the power of technology into bits to benefit the ordinary people to have a smooth ride. It connects passengers with taxi drivers who own their cars.
Currently, Uber has unveiled cab service in 200 cities covering 94+ 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 track the driver’s location.
- The driver can either accept or reject the ride.
- Once the driver accepts the ride, the driver’s information gets dispatched through SMS to the user along with the Expected Time of Arrival (ETA).
- The user needs a Smartphone with an internet connection to place a cab request through the 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 made through ready cash (in some countries like India) while the users have an option to add money in the Uber wallet from where the payment gets deducted once the ride is over.
Who are Uber’s Customers?
- Those who do not have their car
- Those who are not comfortable driving to a party with their vehicle
- Those who want cheap cabs with a doorstep pickup
- Those who would 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. Uber valuation crossed $91B
Rates Depend on the Cab Model – Uber provides a lavish range of cabs to accommodate various classes of people. Right from cost-efficient hatchbacks to luxury SUV lines, Uber has a fleet of cabs that caters to the needs of all types of users.
Price Surge Technique – Here comes the twist. Cab fares vary with the demand. With an increase in demand, there is an instant rise in price/mile. The price is using a simple math technique. Surcharges depend on the number of requests made by passengers and the number of cab drivers available at that particular locality. It purely depends on demand.
Other transportation Service – Cab service is not just the limit. Uber transportation services have 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 a few cities where people get pampered with the 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.
Technology Overtakes Convention
A few decades ago, people were feeling inconvenient with skyrocketing cab rates and the wait time for the pickup was beyond tolerance with local taxis. The demand for cab drivers has no control over the rates while people have no alternative option which gave birth to Uber. It 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 connects freelance cab drivers with the users through their mobile app. The launch happened in 2010, unraveling enormous benefits and values to meet the needs of people of various segments. A single tap to find a cab solution better than the conventional taxi booking method.
Uber handled the launch with so much care. Uber unveiled its start in San Francisco. Uber was very much careful in choosing the crowd. Uber got access to its initial customers through social media marketing and other online marketing techniques.
Free rides, flat discounted rates attracted 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 charmed customers and convinced them to travel in style to their doorstep. The hunt for customers didn’t stop; the next in the list were customers from the corporate sectors.
Initial Customers Share their Experience
Initial customers were impressed by their ride-hailing experience and became routine customers. The early adopters started to share their experience with their families and friends. Thus, Uber has embarked as people’s favorite and took its market presence to a global level.
Uber Deploys the Maximum of Technology
Uber formulated a simple business hack buckled freelance drivers over the Smartphone network to define the business equation. Uber techies have deployed some latest technology to help customers get connected to the drivers in just a few clicks.
Factors Connecting the Dots
Uber is helping passengers to opt for a hassle-free cab ride to their destination at high standards and low costs. Uber has been the most prominent choice for users and cab owners. Some of the factors that bankroll to set Uber on the rise amidst the on-demand business statures are:
- Registered Users/Passengers
- Taxi Drivers
- Profit to the driver’s pocket
- Standard and regulated commission to uber
Cab Driver – A cab owner with a proper driving license is the first essential requirement to become a cab driver. 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 on Uber-enrolled cab drivers need to install the Uber application on their smartphones and get logged. With a single click on the app, you can set your ride instantly. Customers can track the drive with an in-built GPS.
Taxi Fare – Fare depends on the taxi type customers choose. The pricing is minimum for hatchbacks, premium pricing for luxury cars, and surcharges during peak hours when there is a high demand for cabs in that locality.
Payment Options – Users can go on a cashless ride by adding money in the Uber wallet. If the user is ready to pay hot cash to the driver, then uber gives an option to pay via cash method as well.
Profits Shared – Uber gets paid for connecting the driver and the customer! Uber shares 80% of the ride fare with drivers they deduct 20% of the ride fare as commission. However, the stats reveal that even after a 20% deduction, drivers get paid better than the standard cab services.
The 5 Step Business Model
Step 1 (Cab Request): Creating the demand is the first step of Uber’s success. Users Request for a cab through Smartphone and the Uber app schedules the taxi for pickup.
Step 2 (Driver matching): While the user places the request, the nearest cab driver gets the alert with the user details. If the driver rejects the offer, the details get passed on to the next nearby driver in that same locality.
Step 3 (Customer Ride): Customers can check the ETA and track the cab in the user’s app. Once the customer gets into the car, the ride starts and the price begins to calculate based on time and distance
Step 4 (Customer Rating): Once the ride is over, the customer has the option to rate the driver through the app. It is a critical component that adds a star value to Uber’s Business Model as it lets the users know about the driver before booking the cab.
Step 5 (Payment): After the trip, a notification will pop out in the user’s app. The user can pay the amount either by cash or from the prepaid wallet.
Customers who gave a hand to Uber’s Fortune
- Party lovers – People who went to parties, clubs, and events
- Business travelers
- Customers demand doorstep cab during lousy weather
- Late night travel
- No long time waiting hours
- Discounts, Deals, and Offers at regular intervals
- Ride fares cheaper than the conventional taxi companies
- Customize rides
- Fixed prices for certain locations
- Drivers can earn extra money on Tips
- Flexible Working hours
- Instant payment
- Part-time drivers
- Drivers can still get paid even if they don't get any rides
Uber is Flexible to Serve Vast Customer Segments
Uber always looks into the bigger picture. It is well organized and can cater to broad customer segments. Customers can choose from a bunch of cab options like Uber X, Uber SUV, Uber Taxis, Uber Black, etc..
Uber tied up with many corporate companies for everyday trips to their work from home and vice versa. In some countries, Uber caters customers who are willing to pick up their kids from school through Uber cabs.
With 30% to 40% of the rides opted by senior citizens, Uber target senior citizens by giving specific features that would cater to their needs and make them comfortable while they travel.
Key Facts to Ponder from Uber Business Model
- Look into common man’s problem, Venture it with a solution along with technology in place.
- Attract initial users with offers and discounts. It is one form of advertisement where your brand gets known to the world through the existing users.
- Treat your stakeholders properly because they are the main ingredient for your success.
- Look for a step by step expansion. Stack all the business plans and implement them one by one as you grow better.
- Make use of the opportunity that creates space for users.
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 Maps Integration
Driver Registration Facility in Website
Automatic Fare Estimate & Calculation
Stripe Payment Gateway for Credit Cards
In-app notification for riders and drivers
Facebook Signup and Sign-in feature
Pay by Cash option
Basic Reskin / Personalized branding for Web & Mobile App
Emergency Contact Sharing
Book a Ride with the destination
Favorite Ride Option for the Rider
Dedicated Support via www.basecamp.com
30 mins Skype Support Per Week
Single domain license with 100% access to the 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 bugs2 Months2 Months6 Months