A word on the Uber Business Model and how it generates revenue
|We now know Uber as the granddaddy of on-demand apps. It’s aspiration to remaining at the top of the competition in providing the best customer-oriented taxi services is what that had made it achieve phenomenal success.
The way how it functions is by offering its application as a platform for people to book cab rides effectively.
Now let’s have a word about its Business Model which now has made its presence spread across more than 600 major cities across the world.
Founded by Travis Kalanick and Garrett Camp, the now billion dollar company has 7 million drivers and 50 million riders all over the globe.
Speaking of how it functions, the user can book a ride as per his convenience via the app. Next, the drivers can opt to select the ride or reject it. If the ride is chosen then all the driver info is shared with the rider. The payment for the ride can be done in advance or post the ride. Once the ride is complete, the opinion about the ride can be registered via the app.
Uber caters to the needs of the people who don’t have a vehicle, those who are not able to drive their vehicles, tourists and the such.
There are also some special services like Uber for Kids catering especially to parents who don’t prefer school buses to pick and drop their children. Then there is one service for the Senior citizens as well as for professionals who want to commute to and fro from work.
To answer the million dollar question as to how Uber carries out its work, it begins with customer acquisition. For a given city where it enters, a General Manager is appointed to regulate the services from that city. Then following that is hiring drivers who have a car and are very good in terms of the related profession as well. Next is getting the media powerhouses in that city to get a ride via Uber and then collaborating with major companies in regards to providing services to their employee base. Finally, the citizens now know that Uber has come to their city
Uber Value Propositions
Let’s speak about this from a Customer perspective as well as that of the Driver as well.
Customers can avail rides which are cheaper than the normal taxis and there is no concept of waiting time as well. In some occasions, there are free rides as well as amazing discounts too. Customers can have their rides the way they want and with style too.
Drivers, on the other hand, find Uber as a great source of income with greater flexibility in work.
Uber Financial Analysis :
When it was conceptualized, the brainchildren behind Uber invested only 200,000 dollars and by the beginning of this decade, Uber raised 1.25 million. By the next year, this swelled to nearly 45 million. Now it is valued at 68 billion dollars as per reliable surveys.
Uber Revenue Model :
As with all types of taxi services, the rider pays the driver once the ride gets completed and Uber is no exception to this case. However, it is the number of rides which makes Uber different from all the other services. For a start, Uber has 1 million rides on a daily basis.
Getting into detail, the Uber pricing model varies accordingly to the size and the luxury offered through its vehicles. Also if there is an increase in the demand for rides, so does the pricing as well. This makes Uber even more favorable for drivers and ultimately there are bigger revenues. What’s more, Uber is now expanding its prominence to services offered via Boats, Helicopters etc and also for delivery based ones as well.
What made Uber a symbol of unprecedented success?
Location-based services are now mandatory in the app development world for tasting great success. Uber’s team wanted to carry out its work in serving its users with passion. Uber realized the importance of the Location Based services and acted quickly before its rivals could realize what was going on. Uber’s options in cab services made the word about Uber spread far and beyond. The rest is history.
This is why several enterprises are now inspired by the Business Model that Uber employs in generating astronomical revenue.