Do you want to create the next Uber for X?
In a nutshell, Uber's business model adheres to three main principles:
- Customers are able to receive the required offline service just after online ordering.
- Service providers are free to choose whether they will provide the service to that particular customer or decline the request.
- Two separate mobile apps (for service provider and consumer) are supposed to be used.
Everything is pretty simple. And that's why Uber-like services keep appearing. To make things clear, let's find out if any startup idea can follow Uber's business road and, what's more important, achieve success.
First of all, you may wonder if Uber-like business should provide only offline services. Of course, Uber itself provides physical offline services — on-demand car services, which now allows not only city rides but also delivery services (including food delivery) and airport transportation. Taking this, you may think that only offline services are to benefit from Uber business model. However, true businessmen think wider: even online services have something to take from Uber's way of doing business, but first things first.
- Uber for Home. One of the widest niches to employ Uber model — Cleaning services (including Laundry services, Carpet cleaning, etc.), House Repair Services (minor and major mending) and so further. Except for this, Uber for Babysitting, Tutoring, Dog Walking, Gardening, and so on, always find a market.
- Uber for Delivery. Courier services, Deliveries from shops, restaurants, cafes, Truck services, just to name a few.
- Uber for Repairs. Demand for repairs isn't limited to houses. Just think of numerous electronic gadgets, cars, clothes, and jewelry people possess.
- Uber for Health is another engrossing on-demand market. Here, various kinds of services will find their consumers, starting from doctor's visit to remote consultation (by the way, here's your example of the online on-demand service).
- Uber for Accommodation. There's nothing easier than to provide renting of a room, an apartment or a country house applying Uber-like services. Take AirBnb as an example — sharing services at work.
- Uber for Other. You may choose any other of the service industry.
Business Model Canvas for Uber and Uber-like businesses
Uber combined all three to achieve total success: great product that offers its undeniable value has met great and, what's more important, appropriate market.
Anyway, we are not going to be confined to this general information. Let's see what questions need to be answered in each table cell to create an effective understanding of business model for Uber and Uber-like businesses.
1. Value Proposition
What does Uber do?
Uber has Passengers and Driver-partners.
Uber offers the Passengers segment the following:
- Rides search
- Good quality and luxury cars
- Booking (request & match technology)
- Cash-free payment
- Minimum waiting time (ETA & car approach tracking)
- Rating & reviews possibility
- World-wide availability
- Flexibility of working hours and location
- Additional income (payments even without requests if online)
- Aware and engaged clients
Next thing is to define what value you are going to deliver to both. You know that it's never enough to have a cool idea. Your idea should seem useful not only to you but to your customer segment as well.
2. Customer segment's
So, it's really important to identify who you create value for.
Creating a product for a two-sided market, keep in mind that you deliver different sorts of values for both segments.
Take a look at Uber's users — Passengers and Driver-partners.
Passengers are those who:
- Need a ride from point A to point B and either don't own the car or don't want to drive themselves
- Look for a cost-efficient solution with sharing option
- Want a luxury ride
Driver-partners are those who:
- Want to earn extra money using their own cars
- Taxi drivers who want to be their own bosses
3. Distribution channels
With the growth, Uber has brought into a play many methods of spreading the word about their service. Some of them are pretty traditional, such as online presence (website, mobile apps), social media marketing, PR strategies, a partnership with known brands, and, of course, by word of mouth.
The others are more creative, like suggesting their services in the points of potential demand (sports events, concerts, etc.) or responding to particular weather conditions (who doesn't know how annoying it can be to receive rejects from ordinary taxi services in nasty weather?)
4. Customer relationships
5. Revenue stream
To find the answer, let's see how Uber has organized its revenue strategy. First, Uber charges for miles or kilometers. Second, Uber has separate pricing politics for different levels of service (UberX, Premium Uber Brands) and extra services (Uber Cargo, Uber Foods, etc.). And of course, surge pricing also influences company's profits. That's it.
Developing the revenue model that will suit your business is an individual thing and there is no universal recipe. So if you need our advice, we'll readily give you a helping hand.
6. Key resources
First of all, a platform that will connect Service Provider and Service Consumers.
Secondly, the base of Service Providers (Drivers with cars, Cleaning staff, Mechanics, etc.)
The next key resources may vary. However, if your want to ensure automation, you should include relevant algorithms. Uber, for example, has Pricing and Routing Algorithms.
7. Key activities
- Platform development and management. It's the most time and cost intensive process, but it's essential as well.
- Marketing and customer acquisition
- Hiring and managing Service Providers
- Customer support
8. Key partners
Services like Uber have to provide:
- Service providers
- Technical support (Map API providers, Payment providers, etc.)
- Local authorities in case you're planning to scale your business outside your local area
9. Cost structure
Here's a list of expenses you should be prepared for (by the way, it contains the same things as Uber).
- Tech infrastructure — App creation and maintenance
- Salaries for permanent employees
- Marketing expenses
How much does it cost to develop Uber for X?