3 Lessons Every Entrepreneur Can Learn from Uber


I travel to Washington, DC quite frequently and, during my recent visits, I’ve had the pleasure of using Uber to get around town — instead of the antiquated taxi cab system.

To say that Uber has made my business trips more productive and less stressful is an understatement. Timely pickups (instead of having to wait or hunt for cabs), as well as rides in nice, new air conditioned vehicles, are just some of the benefits of Uber.

If you’re not familiar with the Uber system, here is how it works …

  • I’m getting ready to leave my hotel, so I open up the Uber smartphone app and select my location.

  • Upon doing so, Uber then pings nearby drivers of my impending need for a ride via a specialized app that all Uber drivers have in their car.

  • The nearest available driver (first come/first serve) then responds that he or she will be there to pick me up.

  • My app then informs me that a driver is 3 minutes (as an example) from my location, and provides me the name of the driver, the type of vehicle and the driver’s Uber rating (based on a five-star scale).

  • If I don’t like the driver’s rating or vehicle type, I can reject him or her, and request another driver.

  • The car picks me up. It’s usually a newer car, air conditioned, with a bottle of water waiting for me in the back seat.

  • After the ride is over, I thank the driver and … no cash!  The transaction (including tip) takes place via my smartphone app, where I have entered my credit card info (or via Google Wallet).

  • I rate the driver on the five-star scale.

I should note that, while I’ve only used the “black sedan” option, Uber now offers a lower-cost taxi option in some cities.  One driver told me that the taxis are existing local cabs that can opt-in to be Uber drivers — but each taxi must meet Uber’s standards (clean car, new car, etc.)

It’s a great model and a great service.  Here are three lessons entrepreneurs can learn from the Uber business model:

1) In a down economy, customers will still pay a premium for quality service.

Last week, one Uber driver informed me that there were 4,000 Uber users in the D.C. metro area alone.  There’s a reason these thousands of people are paying a premium (yes, Uber costs more than a normal taxi) in a down economy.

It’s the service.

A frequent business traveler like me can have his or her day ruined by time spent hunting or waiting for a taxi. Or riding in a taxi in the summer heat with a driver who refuses to turn on the air conditioning. Or a driver who is rude and drives recklessly. Or, as was the case on a recent trip, a driver who refused to pull over even has his car’s transmission was stalling.

Thanks to the five-star rating system, each Uber driver I’ve had bends over backwards to be polite, help me with my bags, and provide great service.  They keep their cars clean, turn the air conditioning up, and have reading materials and bottled water waiting for me in the backseat.

2) Disruption wins.

Uber has completely upended the antiquated, unionized, sorry taxicab system in Washington, D.C. They’ve been so successful, in fact, that the taxi union tried to have its allies on the city council shut down Uber a few years ago.  It didn’t work, as Uber’s throngs of happy customers responded by flooding the inboxes of the city council politicians.

From the smartphone app, to the “freelance” drivers, to the rating system, and to the cash-less payment system — Uber has shown that creative ideas that fill a customer need can revolutionize something as simple as citywide transit.

Can your business do the same?

3) Don’t be afraid of customer feedback. Welcome it.

There are still businesses who are so terrified of customer feedback that they refuse to even put up a Facebook page. The fear of even one negative public comment puts them into paralysis.

Uber, on the other hand, is a business that thrives on customer feedback. That customer feedback helps the integrity of the system, and also creates a brand loyalty among customers that results in that customer base angrily emailing the city council to keep its hands off their favorite car service.

There certainly are a lot of lessons entrepreneurs can learn from this disruptive business.  In fact, there’s a lot we can learn from the individual drivers, many of whom are entrepreneurs themselves who own their own fleet of cars.

Have you tried Uber? What was your experience?  Can you think of any additional lessons we can learn from this disruptive business model?

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