With intricate technology and a research-driven business plan, Uber is disrupting the status quo of the personal transportation industry. A chic, technology-driven car service that provides rides to users at a tap of a screen, Uber is easy to use and gives customers the ability to select a type of vehicle and location to be picked up at any time. If you have an iPhone or Android device, the company's mobile apps let you do all of this from your smartphone; otherwise, the service is available via SMS or on the web.
Initially limited to customers willing to pay higher prices, Uber is now taking aim at the masses by adding less luxurious and more cost efficient cars in a service Uber is hopping will appeal to the money-conscious clients. With a great business plan appealing to various socio-economic ranges, clever testing tactics, and intricate scientific analysis of data, Uber is set up for success.
From Then to Now
The integration of technological advancements into Uber’s platform enables drivers to have an idea of popular geographic locations appearing on their smartphones, which helps them predict when and where to wait for customer’s calls. Uber automatically charges the fares on credit cards with tips included. Although Uber does not provide the drivers, they work with freelance drivers who piggyback off of their technology and make a commision on every ride that is given. This enables limo drivers to have their own business and make a few extra dollars on their down time.
Now, Uber is adding hybrid cars to lower the price of their service. The original cars Uber used were black town cars, which cost passengers 40 to 100 percent more than a regular cab ride, but now with hybrid cars in circulation, rides only cost 10 to 25 percent more than a regular taxi ride. With more efficient fuel usage, hybrid cars significantly cut costs for drivers. On top of that, on July 4, UberX was released. UberX enables Uber partners to dispatch a diverse variety of cars ranging from the Toyota Prius Hybrids to Cadillac Escalades. The fascinating part of the service is that a car can be waiting to pick you up just from a tap on a smartphone.
In a TechCrunch interview, Uber CEO Travis Kalanick explained, “Our motto is ‘Everyone’s Private Driver’.” Given that a limo service must have TCP license in order to transport people, it does not state that it must be a limo per sé, hence Uber’s ability to revolutionize the transportation industry by integrating hybrid cars into circulation. With a software that rides to predict the areas where rides are likely to be in high demand at different times of day, Uber is able to offer quick response time to requests from anywhere.
In order for Uber to be able to go into a city and successfully match the supply of freelance drivers to the demand of rides needed, “secret Uber testing” phases must be enacted to scope out the new city that is being added to the Uber map. According to the Uber team they need to ask themselves four questions in order to successfully run their operations:
- Where are people coming from?
- Where are people going to?
- Where are the drivers at?
- When do these patterns change?
For instance, when Uber came to New York City, a few secret Uber vehicles were put on the road. Although there was a limited supply and the service was not comparable to when Uber is fully launched, it still gave the Uber team an idea of how the city compared to other locations. Uber is, for the most part, highly regarded by its customers who shared their views on Yelp. Although a common complaint is Uber’s relatively high price and vehicles not always being available, most people seem to agree that the service is efficient and that the drivers are very courteous. More importantly, most users remarked that they would use it again.
Uber’s presence in nine major cities enables them to compare trends and modify Uber supply to successfully meet consumer demand. A team of neuroscientists puts to use scientific analysis on all data recorded. Trends and conclusions can be made with detailed maps showing the results and findings of the studies.
For instance, Uber creates maps to see how riders flow from one part of a city to another, and they track the probability that a ride starts in one neighborhood and ends in another. By doing so, the company stated, “Not only can we get a pulse on the ins and outs of the city, but we can get a feel for how people move from place to place.” For instance, through testing and collecting data, Uber found that NYC’s demand is skewed towards weekdays, whereas San Francisco’s Uber demand increases on weekends.
A perfect example of this can be seen in Uberdata, the mapping of San Francisco. In San Francisco 39 percent of all Uber rides move between six neighborhoods: Soma, Downtown, Financial District, Missia, Marina, and Western Addition. Through analyzing instrength and outstrength (rides coming in and out), the Uber team can deduct that Soma is the main hub of the San Francisco area. All these details may seem trivial to the average person, but when one’s business is matching consumer demand to supply, every bit of data helps make the process less expensive and helps give the user a better experience.