Monday, June 17, 2024

Lessons every startup can learn from Uber

Source: Uber

To some degree, every startup has to envy what Uber has achieved. Its elegant experience delights ride-sharing customers and disrupts an inefficient and sometimes less-than-squeaky-clean taxi industry. In just five years, it has expanded to more than 200 cities and is now valued at $17.3 billion (U.S.). What startup doesn’t want to sip from that deliciously sweet cup of success?

But there are signs it may be a poisoned chalice — corrupted by their own hand.

A backlash is growing against the Silicon Valley company after months of careening through a series of controversies, from aggressive guerrilla marketing tactics meant to sabotage competitors and taxi driver protests across the globe to alarming reports about rider safety and now growing data privacy concerns.

What can startups learn from Uber’s bumpy ride? Here are some lessons companies bent on innovation and disruption should consider.

Focus on the real competitive threat

Uber isn’t the only ride-sharing service out there, and in some cities, there is fierce competition not only for riders, but drivers. In August, reports surfaced of coordinated campaigns to impede rivals’ growth in new markets. Uber claims Lyft has done the same. But engaging in turf battles with competitors shouldn’t be either company’s focus. The biggest competitive threat for any disruptive company are existing services, especially if they are backed by regulations that put money in government coffers.

A few consumers’ desire for greater convenience will not change long-standing rules. You’re going to need allies, not more enemies.

Get industry insiders on your side

Don’t be Napster, be iTunes. Professionals within the existing industry you’re disrupting have to see benefits of your service as well. Offer the industry pros a better way to make money — in Uber’s case, they need existing taxi and limo drivers to support them.

There may even be good reason to come on board. One driver in London was quoted recently:

“When you work with other cab companies, they have all these politics. They have their favorite drivers and when the good jobs come, they [the bosses] always pass them to them … With Uber, there’s no such thing. It’s a good business model. Whoever is close to the job, they will get the job. There’s no interference; it’s a free market.”

But the widespread protests suggest that message is not getting through. They need to be seen as an ally, not a threat.

Recognize when it’s time to lead

As the frontrunner in ride-sharing, Uber is the lightning rod for critics of not just its own practices, but the entire industry. It is in its own long-term best interest to represent ride-sharing as a whole, leading by example in policy debates, regulatory dealings, hiring practices, and how to address rider safety and privacy.

When your revolution touches on subjects of intense political interest, as urban transportation certainly does, politicians need good reason to stand at your side — and no reasons to disassociate themselves. To win them over to your cause, you must demonstrate that you’re trustworthy in every way, and advocate some kind of grander vision than your own narrow business interests.

Above all, respect your users

This is so fundamental one would think it doesn’t need stating, but Uber is apparently proof that it does. The first commandment of modern commerce is “Thou shalt not betray users’ trust.” Be transparent. Don’t lock them in or make it nearly impossible to delete their account. Put their interests first, especially their safety and privacy.

Controversies like how Uber uses its “God View” of riders trips are not just cases of bad PR handling (although they’ve done a poor job at that, too). They suggest the company doesn’t fully appreciate the responsibility they have as a company that puts strangers together into a confined space and tracks the movements of private citizens. Taxi rides have always carried some potential risk, both for driver and passenger. But if it’s your business’s value proposition to offer a better way to bring drivers and passengers together, you have an obligation to make every effort to protect both — and be the good corporate citizen when something goes tragically wrong.

Uber may yet find a way to dust itself off and emerge a better company. But for now, it seems that Uber has must atone for committing the fifth of Mahatma Gandhi’s Seven Social Sins: Commerce without morality.

When startups dream big, they have to be ready to behave like a big company, too.

 Photo via Uber


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