How Uber’s Growth Strategy Succeeded in London

Uber is a $60B company that’s taking over the world, but the car sharing service didn’t scale cars alone. The real challenge was, and still is, creating a two-sided marketplace in each city, comprised of both drivers and riders. The Guardian’s recent report on Uber’s growth strategy in London identifies five factors crucial to the company’s success.

How Uber Attracted the Drivers Crucial to Its Growth Strategy

  1. Know what your employee (or contractor) wants. Richard Howard, Uber's first London employee, targeted freelance drivers with Mercedes and BMWs who worked for a number of chauffeur companies. He lured skeptical drivers with a free iPhone and a special introductory offer: they would be paid £25 an hour to work on the Uber platform whether they got any jobs or not. London drivers wanted security, and Uber’s offer was perfectly attuned to their needs.
  2. Know the cultural scene. Howard knew Uber had to get the right cars on the road. For London, that meant offering Mercedes C classes for the same price as black cabs and focusing on high-end neighborhoods such as Shoreditch and Old Street as well as nightclub strips in West End.
  3. Anticipate a lean team’s max capacity. Once Uber reached 100 riders, Friday and Saturday nights were already at full capacity. To continue scaling up, Howard gave away hundreds of free rides for parties and set an “allowable burn” of £50,000 a week to recruit drivers to the platform.
  4. Align around cultural events. Uber’s goal was to scale up in time for the 2012 Olympics. The simple goal was to never have zero drivers available when visitors opened the app, especially for American tourists expecting the same service globally.
  5. Focus on employee referrals. Even after joining Uber, drivers still loved the app for eliminating tyrannical dispatchers with a fair and transparent algorithm. Even when Uber transitioned from hourly rates to a commission based pay, drivers remained loyal to the system and spread the word. Three years later, two-thirds of Uber drivers in London have been referred by a friend.

Takeaway: Scaling a marketplace is challenging. To attract suppliers and make sure your growth strategy stays on track, determine what's most important to employees (or contractors)—stability? Flexibility? Status? Delivering on this offer will encourage word-of-mouth referrals, and help your company continue to scale.

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