UBER Car Service: A Dream App When Flow & Timing Are Critical

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Uber carFor those of you who haven’t heard of UBER, and because of the name, think it’s some funky, hip device, think again. UBER is a car service that is as simple to use as calling a taxi. Many higher end car services require you to call them well in advance and they’re often fairly pricey.

While UBER is definitely more expensive than a taxi (roughly about double in my experience), it’s incredibly useful when you need a more formal sedan for business purposes, when it’s late and taxis might take too long to get to you or you’re in a location where taxis are tough to find.

I ran into the CEO Travis Kalanick recently on my flight to Paris for the LeWeb conference, the annual renowned Internet, social media & technology event held in Europe every December. The news was that while UBER had already been announced in San Francisco and other cities, Paris was to be unveiled that week as their first European location. And so, I had an opportunity to use their newly launched service in the world’s most romantic city.

It was a simple free download onto my iPhone. Once you have the app, you can quickly request a car by telling Uber where you are. If you don’t have an iPhone or Android app, you can text them your address. Cars typically arrive within 5-10 minutes. In Paris, it ranged from 6 minutes to 18 although most of the time, it was around the 8-10 minute mark and the accuracy of arrival times was spot-on nearly all the time.

As your driver is nearing your location, you can see exactly where he or she is on the map on your phone (the geo-visual element is part of the UBER app and you can see literally where the driver is down to the street corner, providing constant updates of the estimated arrival time). UBER also tells you the name of your driver and includes a photo so when you walk outside of your venue, you can recognize them more easily.

Uber

I also tried UBER to the airport and while taxis charge roughly E65-70, UBER costs around E120 for your black sedan, which of course has a bottled water waiting for you in the seat. For a taxi that may cost around E8-10, I found that UBER charged around E20 but bear in mind that the final cost which is automatically charged to your credit card, does include the tip.

That was mid-December. Since then, they were hit by customer complaints on New Year’s Eve and write-ups by All Things D and more recently the Huffington Post followed as a result.

They apparently raise prices for major holidays where demand is going to be high, and did so on both New Years and Halloween. According to the D post, ‘when prices are about to surge, Uber sends a mass email out to its users, puts up a blog post detailing the pricing changes, and, barring technical issues, users should also get notifications through the app during times that surge pricing is in effect.’

Uber institutes a “surge pricing” system with the idea that they need to keep cars available for the customers who really want them, so as demand grows, prices would too. From UBER’s blog about how surge pricing works:

“Without a surge pricing mechanism, there is no way to clear the market. Fixed or capped pricing, and you have the taxi problem on NYE — no taxis available with people waiting hours to get a ride or left to stagger home through the streets on a long night out. By *raising* the price you *increase* the number of cars on the road and maximize the number of safe convenient rides. Nobody is required to take an Uber, but having a reliable option is what we’re shooting for.”

My experiences in Paris were nearly flawless but then again, bloggers and press were given credits so we didn’t have to face $200 surge pricing rides and because the service was brand new, there was a lot of availability (60 cars on the ground at launch), which meant that I never had to stand in the Paris winter rain waiting for a half an hour for a car that may never come. We’ve all been in those situations before and they’re not pretty.

So, while my experience was great (and btw, all the drivers were professional, courteous & shared useful information; one even brought me to a local place he knew for a crepe), the economics don’t make sense for me to use it at home. That’s the issue said a VC friend when I asked him what he thought of UBER. “The economics just don’t work.”

That said, UBER also gives you a sense of empowerment as well as freedom and control. If you’re still at a dinner and don’t want to disturb the flow of a conversation, you can simply push a button on your phone to see how far away your UBER car is…based on that information, you can either decide to push the button and order or wait for awhile.

For example, I just opened the app to see how many cars were available in San Francisco and was told that a driver was a mere 2 minutes away.

Uber2

There’s no interruption or need to tell your colleague, business contact or the restaurant manager to call you a cab. Most of the time, you haven’t a clue when that cab is going to arrive, not to mention the fact that often you’re on hold for far longer than you want, with horrible elevator music playing in the background.

I find that most of the time, particularly in foreign cities, the accuracy of when a taxi will arrive isn’t great. UBER can be particularly useful in a business meeting where timing and flow is critical.

I can also see UBER being useful in cities like Los Angeles and Miami where there’s more of a “late night” scene and you could share an UBER car with friends to go to your next destination. Other cities where UBER is currently operating is: San Francisco/Palo Alto, New York City, Seattle, Chicago, Boston, Washington DC and as noted, Paris, as of mid-December 2011.

Two other things to note: you can rate the driver immediately after the drive and provide real-time feedback if it didn’t go well, which increases the likelihood of the service and quality of the drivers remaining high and improving over time.

Also, in my experience to-date, their customer service has been very responsive. I think if they can get their markets and target audience right and market to them effectively, UBER can be a dream app at just the right (or rather wrong) times.

Here’s a link to a video that Bloomberg’s Emily Change & Cory Johnson did where they share their own experiences using UBER in San Francisco.

Below is the video of Travis on stage with Loic LeMeur at LeWeb talking about their Paris launch. (note: they also announced $32 million in new funding at the time).

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