It seems these days that every new Californian company wants to emulate Uber. Zum, a two-year-old start-up offering on-demand nanny services, aspires to be the Uber of childcare; Lawn Love, a San Diego firm, the Uber of gardening; Wag, a Los Angeles start-up, the Uber of dog walking. And, there are at least seven companies in the state that describe themselves as the Uber of marijuana delivery. What is it that makes this mobile taxi business so special? It is simple: a quick rise to prominence and a valuation estimated at $62.5bn, both largely thanks to its aggressive model of global expansion.
“Uber has a very good market launch 'playbook' that helps them operationalise the build up of supply, anticipation and riders,” says Morgan Brown, a marketing expert and author of 'What's fuelling Uber's growth engine?'.
On top of that, Uber is proving that it is adaptable to local conditions. This was shown in India, where the company rolled out its service in seven cities, including Mumbai and Bangalore, in August 2013. With populations exceeding 12 million and 8 million, respectively, the new markets represented an immense growth opportunity. But they also presented a challenge to a company designed with cashless transactions in mind, given that 95% of the Indian population do not have credit cards.
Yet, as Matthew Moore, international growth design manager at Uber explains on Medium.com, an online publishing platform, after coming up against this problem, the Uber design team ventured out to Hyderabad to test the cash-based features of the Uber app.
“Having proven that cash was a viable option for a tiny group of employee-users, we rolled out a more expansive test to the entire population of riders and driver-partners in Hyderabad. With this data, we were able to justify that a cash option is needed for our Indian users and the experiment has now rolled out to every Indian city that Uber operates in,” says Mr Moore. He adds that, after tests, cash-based features were introduced in other locations where credit card coverage is still low.
Uber has not only made a name for itself, but its popularity and efficiency in adding new clients has also helped it make some enemies, with taxi drivers taking to the streets in a number of cities, including London, Rome and New York, to protest against their new competitor. Initially, this made local authorities in the cities Uber was trying to break into wary of the business, as they anticipated that they will have to deal with anti-Uber protests and would lose money from taxi licensing.
But, while taxi drivers will not easily be convinced to change their minds about Uber, local authorities appear to be more receptive. This is partly due to the fact that the company has been scaling up its operations worldwide, and is now focusing on creating more non-driving-related employment opportunities.
“Uber is now available in 400 cities around the world. To support this diversity, we are building a large 24/7 support network that will scale up as we expand globally,” says Gareth Mead, a spokesperson for Uber in Europe, the Middle East and Africa (EMEA). “These facilities have already created hundreds of new jobs, [in roles] including community support representatives, data analysts and process improvement specialists, as well as leadership management roles.” The facilities in question are its centres of excellence (CoE), which the company has been rolling out since 2015. The first opened in Phoenix, Arizona, in June 2015, and employs a 300-strong workforce. This has been followed by CoEs in Ireland, Poland and, most recently, India.
Until recently, Uber was entering new markets largely without the participation of local authorities, but this is not the case with its CoEs. “Typically, we have already identified which country we want to invest in next, but investment promotion agencies have great expertise that can help us choose the best city. Their support can be even more granular than that, sometimes recommending specific sites,” says Mr Mead. “They also make a valuable contribution by informing our recruitment efforts”.
A helping hand
How this co-operation works in practice is demonstrated by the company's expansion in Poland, where by 2017 Uber plans to open its CoE to support its operations in Africa and Europe.
"We chose Poland for our operations in the region based on its strategic location as well as its economic stability. We were looking at a couple of cities to invest in. To help us shortlist these, we asked the Polish Information and Foreign Investment Agency [PAIiIZ] for help,” says Chris Bates, the general manager tasked with getting Uber's Polish CoE up and running.
“It was data not incentives that we were after when contacting PAIiIZ," he adds. So what exactly were Mr Bates and his colleagues looking for in the data provided by PAIiIZ? “Talent,” answers Mr Bates. “We were looking for supply of university graduates with good and versatile language skills.”
Uber's search for talent led it to Krakow, Poland's third largest city and home to 10 higher institutions and more than 120,000 students. Uber will create 140 jobs in Krakow, and Slawomir Majman, CEO of PAIiIZ, highlights the fact that these are not just any jobs, as CoEs are a far cry from typical call centres. “New openings are aimed at graduates who will work as analysts. They will work on solutions that will be applied across the whole EMEA region,” says Mr Majman.
The Irish Development Authority (IDA), which worked with Uber when it launched its CoE in Limerick, Ireland's fourth largest city, is similarly positive about the impact that the company's operation will have on the city. “The skill set that Uber is looking to hire is a great fit with Limerick – the company wants strong communicators, people with a knowledge of data analytics and those with an ability to read and interpret data in order to make decisions. Limerick is a strong location in this regard,” says Maeve McConnon, the manager in charge of the western US at IDA. She adds that just a few months after Uber chose Limerick for its centre, the company created 100 jobs, and it is planning to add 200 more when its CoE is fully operational.
Back in July 2015, on the day Uber announced its decision to invest in Limerick, Michael Noonan, Irish minister for finance, said: “We look forward to seeing Uber grow and thrive in the years ahead." And endorsements followed from Enda Kenny, the country's head of government, and Richard Bruton, minister for jobs, enterprise and innovation. Proof that some public officials are ready to join Uber for a ride.