The Unconventional Success of Uber
It's 2008 and the state of Taxis in San Francisco couldn't have been worse. The unreliability of Taxi companies is getting extremely annoying for Garrett Camp; a young entrepreneur trying to engage in everyday social activities such as dating. Always being late due to Taxis flaking on him led him to think of a way to resolve that problem (he came up with), and as all entrepreneurs think, he decided to found a startup. And so Ubercab was created, but that was it, for a while.
That was, till he met Travis Kalanick, who fell in love with the idea and added that Ubercab shouldn't own the cars, it should just be the link between the customer and the taxi driver. Ubercab launched as a website that guarantees a "premium" ride whenever you need it, only for 1.5 the price of a "normal" cab. Ubercab then developed an app, bought thousands of iPhones from AT&T at a lower price, and distributed them for free to taxi drivers. Ubercab also only asked for 20-30% of the revenue at the time. Then, due to the ease of access and reliability of the app, word of mouth started getting around.
Austin Geidt, a name that became very integral to the company, would be their first city launcher, who branched Ubercab out of San Francisco and to other cities. By devising the strategy of Promo Codes and Driver Bonuses. Which would start growing Ubercab's numbers of both drivers and customers rapidly, but would also cause the company to start losing money on each trip made.
Facing potential fees and jail time due to not having a license to own a cab company, Travis decided to change the company's name from Ubercab to Uber.
This brilliant move made them dodge a whole arsenal of bullets of legal issues as they now, technically, aren't a cab company. Now Uber was free to start branching out of the US, and so in 2012, Uber started for the first time in Paris, London, Sydney, and many more!
However, continuing with the strategy of promo codes, driver bonuses, discounts, and prioritizing growth over profit has caused Uber to lose even more money. Nevertheless, investors' money kept pouring in, due to the company's value that was growing extremely rapidly. Reaching investments of $5 billion dollars in 6 years!
Uber's success is undeniable and it has inspired a lot of modern startups. They have also been quite good at dealing with their contenders, such as Lyft and its introduction of peer-to-peer sharing that they soon mirrored with Uber X.
