How did Uber become the global powerhouse it is today?
- October 11, 2022
Founded only in 2009, Uber has achieved what many companies founded decades before have never been close to achieving. With over 29,000 employees and more than 1,000 stakeholders from different nations of the world, Uber remains one of the most closely monitored companies in the world. Thanks to its success in such a short time, Uber has become the epitome of successful business growth and has been privileged to be matched side by side with giant companies such as Amazon, Google and Microsoft.
A short profile
Uber Technologies, Inc., popularly known as Uber, is an intercontinental company that provides a platform for its users to have ease of access to transportation and food services. Initially, Uber started out as a company providing transportation services only. In 2014, the company introduced its food ordering and delivery service Uber Eats. Today, Uber Eats alongside two other food delivery companies accounts for 80% of the food delivery sector, with Uber Eats taking 25% of the total share.
Uber shares all of its operations in two segments. The first segment, which is the ‘Core Platform’, comprises Uber’s ridesharing services and Uber Eats. The second segment, known as ‘Other Bets’, comprises Uber Freight and other New Mobility services.
Uber’s ridesharing services connect users with drivers of different kinds of rides, ranging from motorbikes to cars, minibuses, rickshaws, and even electronic vehicles. Uber Eats works with restaurants to help consumers find and deliver meals they order online. Uber Freight connects shippers and carriers of goods with trucking vehicles, while the New Mobility platform is involved in the supply chain of the latest vehicles that follow technological trends.
Interesting facts about Uber
Uber’s history does offer us interesting insights. The company as we know it today started with a simple thought: what if rides could be requested from the phone? In 2008, during a cold winter evening in Paris, two friends, Travis Kalanick and Garrett Camp, were set to attend a tech conference. Perhaps due to the weather, the duo was unable to get a ride. This triggered the idea of designing an app through which users can tap a button and order a ride.
In 2009, Uber launched as UberCab in San Francisco, and the first ever Uber trip took place in 2010. The company’s name changed to Uber in 2011. This was the same year that the company gained international recognition as it launched in Paris, the city where Kalanick and Camp had first conceived the idea.
Since its first ride in 2010, Uber has introduced several mini services that work directly in hand with its rides, from the opportunity for riders to request on-demand ice cream delivery, to UberKITTENS, a service that allows riders to request a furry companion in their ride, to UberPool, which allows riders heading in the same direction to share a ride in order to save costs and keep streets less congested.
In 2015, Uber experienced its first recorded ‘Uber baby’, a baby that was born on an Uber trip on the way to the hospital in New York City. A month later in April 2015, Uber Eats made its debut in Los Angeles, Chicago and New York City.
Uber clocked 1 billion total trips in December 2015, five and half years after its very first trip. By May 2017, Uber had made a total of 5 billion trips. In 2020, the count doubled to make a total of 10 billion trips since Uber started. Uber now runs its services in more than 80 countries and 785 metropolitan areas across the world.
How did Uber rise to become the success it is today?
Uber has been graced with a close following since its inception. It has ranked high, if not first, in many commendable market listings and has disrupted the transportation industry more than any other company. On the other hand, Uber has also been hit with major controversies and business miscalculations. Yet it has been able to maintain its prestige and favor with investors. The growth of this company is indeed fascinating and should be explored every now and then.
Keep reading to find out more about how Uber has been able to rise to become the global powerhouse it is today.
Leveraging on partnership with other companies and sectors
From companies in the health sector to the hospitality, manufacturing and environmental sustainability sectors, and the governments of several countries, Uber has learned to initiate partnerships to its own advantage. While some of these partnerships have resulted in a larger market share for the participating companies, Uber has also participated in partnerships with several NGOs and governments where it invested a lot of money. These are appreciable moves that have put the company in a good light to the masses, thereby encouraging patronage and recommendations to friends and families.
Take, for example, the #UberSpringCleaning initiative that was a huge success in May 2014, where riders were able to request pickups for clothes that were donated to Goodwill. Later, in September 2014, Uber partnered with former Secretary of Defense Dr. Robert Gates to create uberMILITARY. This partnership resulted in more than 500,000 military personnel and their family members driving with Uber to earn money.
Uber also partnered with healthcare companies in 2018 to introduce Uber Health. This partnership made it possible for healthcare companies to schedule rides for their patients and staff in order to create ease of access to healthcare. Who wouldn’t love such ease? This was a partnership that automatically increased the number of orders that Uber got.
In 2018, Uber initiated a partnership with MV Transportation to incorporate more wheelchair-accessible vehicles and their drivers into the Uber community. This partnership granted riders in wheelchairs more willingness to order a ride from Uber as they knew that their chances of getting a suitable vehicle were now higher.
In 2022, Uber took Uber Eats a step further by launching autonomous delivery, a service now available in California and Texas. Uber has been able to achieve this by partnering with Nuro, an autonomous driving organization. The aim of the partnership is to help Uber Eats get the upper hand by becoming a pioneer in autonomous food delivery in the US.
Ability to jump early on emerging technology and introduce novelty
We can’t deny the fact that Uber does have a good eye for recognizing future technological trends and has been able to jump on them faster than most of its competitors. Just before the COVID-19 lockdown, Uber was able to successfully establish its feet in the supply chain of New Mobility vehicles, featuring scooters, electric bikes, and many more.
In 2020, Uber came up with another novelty – Uber Green, a ride option that allows riders to connect with drivers of hybrid and fully electric vehicles. Uber Green not only aims to provide its clients with the thrill of mobility in electric cars, but also aims to provide low-emission ride options that are compatible with a sustainable Earth, hence the name ‘Uber Green’.
Uber is a future-forward company. This trend of being able to beat competitors to the introduction of novel services is one of the reasons why it has encountered so much success. Its service gained wide and wild acceptance in such a short time because it was the first of its kind to help riders get access to rides with just the click of a button on their phone. In 2016, it swiftly introduced an option for riders to self-drive themselves to their locations. This innovation got such a huge welcome that by December 2017, Uber’s self-driven rides had reached 2 million miles, with 1 million miles of the count achieved within 100 days.
Other introductions such as the Uber Health scheme, the 180 Days of Change, UberKITTENS, UberPool, and the introduction of Uber Eats and Uber Freights are the big innovations that have contributed to the company’s speedy domination of the transportation industry.
Acquisition of other business units
Over the past 13 years, Uber has diversified and has acquired other business units. The most successful of all is Uber Eats, Uber’s mobile food delivery program, and the most popular service after its ridesharing services. Although Uber Eats launched fully in 2015, the company had started Uber Fresh a year before. Uber Fresh helped deliver lunches and dinners from selected restaurants to customers in California.
Uber Eats met with a sporadic embrace just like its mother ridesharing service did as soon as it was established. Uber launched the food delivery service in major cities and partnered with highly respected restaurants such as McDonald’s. The service also featured benefits such as no-limit order size, cheap delivery, and no restaurant charge, all of which helped it to gain ground against its major competitors.
In 2017, Uber partnered with Barclays to launch a credit card through which customers can claim rewards earned on any service they purchase from Uber. The credit card was also integrated with the Uber app so that riders can use it to pay for their rides and other Uber services.
In 2018, Uber revealed that it would be partnering with GV of Alphabet Inc. to invest in Lime, an electric scooter rental company. Through this partnership, Uber was able to incorporate electric scooters into its line of ridesharing vehicles. Customers can order a Lime ride using the Uber app or the separate Lime app. Similarly, Uber acquired JUMP, a bike-share startup, in 2018.
In 2020, Uber was able to leverage its acquisition of food delivery app Postmates in a $2.65bn deal to pull up its stock to an all-time high by the time the year was ending.
Leveraging external funding
Like many of the other giant companies, one of the contributors to Uber’s sporadic growth is its funding series. Ideally, businesses are expected to pick up with the resources of the founder and make their way to scaling up from profits made over the years. This is known as bootstrapping. If the company is lucky, it might be able to scale to the point of its Initial Public Offering (IPO) all by itself. However, only very few companies have been able to make it to stardom by bootstrapping. Most companies have been able to maintain their track record of success over the years only because they took advantage of external funding opportunities.
The unbroken flow of capital is a highly important factor in business growth. Otherwise, companies would be running on fumes. Since startups have little or no profit to pool back into the business, the venture’s growth remains at the mercy of the financial capacity of the founder. Funding rounds therefore provide a rich opportunity for companies to gather immense capital from willing investors. In return, the investors get an equity or ownership value of the company.
Thanks to Uber already starting on a good footing, it was able to win the hearts of investors who saw the potential for growth in what it was doing. On October 15, 2010, the same year that Uber kick-started, it initiated its seed funding, raising a total of $1.3m. Before this funding, the company was valued at only $4m. By February 2011 when Uber had its Series A funding, it was already valued at $49m. The company raised $11m in this funding session and later raised $37m in its Series B funding in December of the same year.
Uber’s Series A funding was instrumental in helping it expand from just San Francisco to Boston, New York, Seattle, Washington DC, Chicago, and outside of the US in Paris. The Series B funding may have been instrumental in getting Uber ready to launch UberX in 2012. UberX became the firm’s standard ride service. It provides ride options for four passengers and is not as expensive as the UberBLACK service.
Uber has had other funding series since then, including the whopping $3.5bn that came from Saudi Arabia’s sovereign wealth fund in June 2016. Uber would finally go public in 2019, after which the company began to sell shares to anyone who is willing to buy them.
Uber: the company that knows just what to do with data
If there is anything else we must commend, it is Uber’s prowess at rightly analyzing the market to identify opportunities and trends worth jumping on.
Despite Uber operating so many business units, it has been able to effectively manage its data pool. This again has helped the units to flourish conveniently. Take Uber Eats, for example. It leverages on data already obtained from the root ridesharing business and analyzes this data to identify cities where the Uber Eats service is likely to be embraced.
Beyond this, both units share an immense data lake, which is heavily contributed by the root business. The immense amount of big data available has helped Uber to deploy its artificial intelligence smoothly. Whether for transporting themselves from one location to another or ordering a meal from their favorite restaurant, it is easy for Uber’s customers to locate the drivers nearest to them – thanks to the company’s powerful business analytics model.
Uber’s business intelligence and data analytics have also been deployed in estimating delivery and transportation time, constantly changing traffic metrics and uneven food order preparation time, not to mention average restaurant load. Uber utilizes powerful software that is able to pull lots of data and unravel it in a matter of seconds.
By rightly analyzing the market, Uber has also been able to identify the best kinds of companies to partner with, the next kind of service to venture into, and the next city to spread its tentacles into.
Companies such as Uber understand the power of data, from its mining to its warehousing and analysis. They are big on employing business analytics professionals. As most companies are already realizing, data is the future of business growth, and more and more job positions are opening up for business analytics professionals.
Becoming a business analytics professional is easy with the business analytics master’s degree offered by St. Bonaventure University. Enroll in the program to learn for yourself what goes into collecting and analyzing data and how businesses can make key decisions from the data they collect.
In Q2 2022, Uber reported a total of 1.9 billion trips on its platform and $8.1bn in revenue. Although it has been heavily rivaled lately, Uber has managed to maintain its position as the king of ridesharing. On the other hand, the company has taken major leaps into the food tech and automobile ride industries. It maintains the same aim to lead the market using technological innovation and the ability to leverage data to drive artificial intelligence and gets solutions ready in no time.