How uber works: a complete uber business and revenue model?

 Remember the days standing under heavy rains after a long day at the office but finding no taxis to return home. The stress of returning after a late-night party. All these problems vanished with the advent of online can providers, through which a user could book a ride in a matter of a few minutes.

With the technology - savvy generation wanting everything at their doorstep. To simplify the idea of having everything at your fingertips, the emergence of on-demand apps happened.

Uber is one of the on-demand apps that have simplified our transportation. They brought a massive revolution in the taxi industry. This San Francisco based company was founded by Garrett Camp and Travis kalanick in 2009. Spread over 69 countries and 900 metropolitan cities generates a whopping 14 billion US dollars of revenue.

Available as a mobile phone application, it allows it's users to book a cab ride from the desired pickup location till the destination. The client is free to choose the payment options and kind of cab they want. It has a feature to even pool your rides according to your needs.

What makes uber such a success?

 The business strategy followed can be understood in 4 steps:

• Requesting for a cab: the very first step is ordering a taxi from your pick up location. With smartphones available now with every individual, the cab can be called at any given site.
• Accepting of the request: the next step is getting the order by the nearest cab. If they reject. The offer is sent to the next nearest cab.
• The arrival of the cab: the cab arrives at the said location. The cab can be traced at the app screen also for its appearance. The cab, too, has a GPS to track the path of destiny.
• Payment and review/ rating: once the cab is at the destination, the customer can pay online or offline. After the payment has been made, the customer gets the option to rate his ride according to the services.

Why trust uber?

 Uber is an application that caters to all generations.

• Office and college-goers find it convenient to reach their destination on time.
• Provides cheaper alternatives than public transport at times.
• It comes to the rescue of tourists who are on the run from one spot to another.
• It has become a one-stop solution for every need- be it on a rainy day, shopping times, or making time for an event or meeting.
• You can easily book them anywhere unless in extreme circumstances where they may not be providing services at that location.
• All the cabs are registered with the company, so they are very reliable.
• The rates can also be reduced by opting for the uber pool- a ride-sharing service.
• You can choose from a variety of cars, depending on your requirements.

Uber business model

If you have availed an on-demand app's services, you would have paid at the ride's end. Therefore, the company's source of income is the money spent at the end of the rides. And the second source is the promotions or advertisement by partnerships involving third parties.

Aggregators/ Partnership business model-

Uber doesn't own its cars; instead, it collaborates with the drivers willing to provide their services. The only difference would be that they would provide these services under their brand name. The company signs a contract with the partners wherein they set a minimum charge at which the partners will operate. The commission charged by the company ranges from 20% - 25% of the total amount charged from the customer.

With only these simple revenue sources, uber has gained a $ 72 billion value in the global market.

• There are more than 75 million active uber riders across the world.
• In the US, uber fulfills 40 million rides alone. 
• The average uber driver earns $364 per month.

Lessons to be learned from uber

 

• Go in for a partnership model rather than an ownership model. It creates confidence among the leading service providers.
• While choosing an industry, always consider the significant drawbacks of this industry and try to work on them first.
• Treat your initial contributors like kings as they are the once helping you to grow.
• Go slow with your ideas, do not include everything at one go.

There is no doubt that the Uber revolution has had a very positive impact on the market across. There are already many companies that are following their footsteps and reaching new heights. 

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