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Ever since emerging from Silicon Valley in 2011, startups around the world have looked to model themselves on Uber‘s success. Aside from being an on-demand transportation service, Uber could be considered the epitome of what a lean startup is.
Ventureburn had a chance to speak to Alon Lits, Regional General Manager of Uber in Sub-Saharan Africa. We picked his brain on the business model, launches, and what it is that exactly makes Uber, well, “uber”.
In 2013, the company was valued at US$3.5-billion and grew into the US$40-billion powerhouse it is today. It has achieved this phenomenal growth by only employing around 3 500 people in 367 cities around the world. Uber certainly appears to have the perfect model for scaling across the globe.
While appearing as a juggernaut in the business world, according to Lits, Uber treats each city and branch as its own startup. “Travis [Kalanick] (our CEO) describes each Uber city as it’s own startup, we have autonomy to build our cities and leverage off central expertise and resources,” says Lits.
When establishing a new location, Uber will only employ three staff members: a marketing manager, driver operations manager, and finally a general manager. The marketing manager focusses on Uber’s brand, driving signups, customer support, and the product. The driver operations manager has to slowly grow the supply of drivers and study analytics in order to make sure Uber can meet that demand in that city. And finally, the General Manager helps drive the business and strategy.
“You can achieve huge efficiencies with this structure and this team can support a city which completes thousands of trips on a weekly basis,” adds Lits.
Traditionally, Uber doesn’t hire any staff member besides those needed to run the core operation. This means all of its fleet owners and single drivers aren’t employees, but rather freelancers. The move has caused great debate amongst transport officials and the industry.
When it comes to growth, Uber HQ knows it cannot expand with a ‘cookie cutter’ approach for each location. It is mportant to have local teams and local content valid for each region. By partnering with companies on the ground, Uber is able to expand organically.
“We are always looking to partner with business and brands to grow awareness and further enable us to provide safe and reliable rides. It’s also about creating win-win partnerships with brands and we continue to look to partner with like-minded companies in order to do this.”
“We are also able to leverage off the global Uber network and expertise in the rest of the world to help provide best practice locally and scale the city efficiently,” says Lits.
Though, there are some things that do require processes and decisions in order to remain consistent.
Lits says there is a minimal amount of red tape that needs dealing with when it comes to changes. Things aren’t dictated from above to the satellite branches, but when they are, implementations are done on a local level. “This approach allows Uber to scale and grow in each city as they value local expertise and give local validity to run the business.”
Then, there’s the marketing, and while this approach doesn’t work for most companies, Uber largely relies on word of mouth in order to gain customers. You won’t see a billboard on the N1 advertising its services. It’s a tactic that has worked in their favour over the years.
The company is continuously looking for ways to stand out from the crowd by testing out new services, and offerings for its customers.
Uber continues to dominate its markets and shows phenomenal growth in each city it enters. Startups may be able to learn a thing or two from the way Uber does business.