Growth by Value Proposition: How Did Uber Make a Huge Win in the Market? Dorea Team, June 13, 2024June 13, 2024 Uber was founded in San Francisco in 2009 by CEO Travis Kalanick and Garrett Camp. They devised the software app that enables the system to work, recruited drivers in San Francisco, and launched the site in 2010. Since then, Uber has spread to 250 cities throughout the world. it was started with very little money, on 15 May 2014 the Financial Times reported that Uber had raised $1 billion of funding at a $10 billion valuation.1 Seven months later, the firm raised a further $1.2 billion, but now the reported valuation was more than four times higher $41 billion. And in May 2015, the company was reported to be raising a further $1.5–2 billion. By then, the valuation had increased to $50 billion, and in November 2015 is said to be up to $70 billion. What was the Most important Strategies by Uber? Word of Mouth In September 2011, one of its blog posts reported: “Uber spends virtually zero dollars on marketing, spreading almost exclusively via word of mouth. I’m talking old school word of mouth, you know, at the water cooler in the office, at a restaurant when you’re paying the bill, at a party with friends — ‘Who’s Ubering home?’ 95 percent of all our riders have heard about Uber from other Uber riders.” Our virality is almost unprecedented. For every seven rides we do, our users’ big mouths generate a new rider. Imagine if twitter got a new user every seven tweets? Increasing the Size of Market But word-of-mouth is only one aspect of Uber’s growth potential. Other figures imply that the company is not only capturing market share but also increasing the size of that market. Travis Kalanick stated in early 2015 that the traditional taxi market in San Francisco is about $140 million per year, while Uber’s gross revenues in that city are now approximately $500 million per year — a good three times larger than the traditional market. How Did Uber Make a Huge Win in the Market? Something interesting is happening. Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Tom Godwin Uber works well for the drivers, too. They rate the service’s clients. The time and energy they would otherwise spend cruising the streets for fares is eliminated and their uptime is increased. Several drivers have credited Uber with improving their potential earnings substantially. Fares may be cheaper than in a normal taxi, depending on location, but the big advantage of Uber is the proposition, not the price. Ease of use: Simplifies the ordering process — no hailing, no phoning, no searching. Reduces uncertainty of when the car will arrive and the type of vehicle. Simplifies the payment process — the system is entirely cashless. Usefulness: Security and peace of mind through tracking. Better quality through rating driver and passenger on every trip. Saves time through seamless on-demand dependability Art: The experience is a revelation when compared with traditional taxi. In sum, it is a joy to ride in an Uber cab. The system itself is extremely simple, not least for the company itself. It owns no cars. It is just an intermediary that uses technology to connect riders with drivers, then takes a slice of each transaction. The internet and its mobile extension through the smartphone are surely two of the most powerful simplifying platform technologies today, as they can create global access to billions of customers. So don’t forget to consider the potential of tech tools in your business! Articles