AIB Featured Business Uber
As a company which is not shy of public attention, transport network company Uber certainly has people talking. Self-described as ‘evolving the way the world moves’, Uber connects drivers to riders through a mobile application on their smart phone. Founded in 2009, the organisation has rapidly expanded to more than 58 countries and 300 cities around the world. Features of the app include cashless payment with the option of paying via PayPal, rating your driver based on your experience, and splitting your fare with fellow passengers. Since its launch, a number of others have tried to copy the business model, but have not yet posed any significant competition.
Founded by Garrett Camp, founder of StumbleUpon, and Travis Kalanick in San Francisco, the company received $200,000 in seed funding, before raising $1.25 million in additional funding in 2010. With that money, they engaged in a beta launch midyear, followed by the official launch of the app in 2011. Initially Ryan Graves was appointed as CEO, however Kalanick replaced him later that year as he stepped down to become the COO. By the end of 2011, it was clear that Uber was here to stay with over $44.5 million in funding being raised. With success in hand and expansion on the cards, UberCab changed its name to Uber.
Expanding rapidly at the rate of a new city each month, Uber went on to operate in its first international city, Paris, at the end of the 2011. In 2012 and 2013, Uber expanded into additional overseas markets, but it wasn’t without its challenges. As they grew internationally, several controversies arose with both government and local taxi companies. Cities around the world have experienced protests from taxi drivers as they see their business decrease. For many, Uber is seen as a more affordable and accountable option in comparison to taxis, and as a result this has caused havoc among the taxi communities. Earlier this month, The Huffington Post reported that nine of the world’s countries are giving Uber grief, those being; Brazil, Canada, China, France, Germany, India, Japan, Korea and Spain.
Controversy aside, Uber’s journey to a multibillion-dollar organisation in just a few years is quite a remarkable achievement. Talking to CNN Money, CEO Kalanick described the growth as ‘unprecedented’, and that the company is growing at an alarming rate. With sales reportedly quadrupling every year, hundreds of millions of trips are taking place and these are continuing to grow. To put it into perspective for you, Uber is currently valued at a reported $40 billion – making it worth more than the taxi industry overall. While critics are sceptical of this figure, there is no doubt that Uber is impacting transport all over the world, with it operating in seven cities in Australia alone.
What do you think?
With Simon Rossi from Uber joining us at our Melbourne Digital Marketing Forum this month, we’re interested to know what you think about Uber’s business journey? Are you a fan of the app, or do you still prefer taxi drivers? I’d love to hear your views so please comment below.
This article was written by Laura Hutton on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources have been used to prepare this article: Wikipedia; Uber; The Huffington Post; CNN Money; and News.com.au