Uber is an on-demand business model to get a speedy cab assistance in flip of seconds from any location. The mobile app is made to have an excellent user friendly experience involving an all together a customer-eccentric approach.
With the popularity and success of Uber, Uber for X model in the form of native mobile apps is adopted by quite a lot of industries and varying niches like logistics and transportation, local and home services, healthcare, food and groceries, beauty and wellness and other on demand services.
Many competitors are inspired by Uber and tried adopting the Uber for X model giving a decent rise on successful business start ups in recent couple of years. With this, many wanted to get a similar user friendly feel in their mobile app, Uber revenue model, easily attract the service providers and much more.
But, Not every business that shot for Uber under different niches could drive it to the top-spot . The causes of the failure are mentioned by the business owners only. We are here to learn something from their failure because success is not built on success but its built on failure.
The insight about reasons of their failure proves best for the business buddies to trigger the loopholes from the very start to achieve all the fortunes.
Why Uber for X is for Everyone – Don’t Underestimate the Power of a Uber Clone Business
Uber Startup Failures: More than Uber for X successes, you should look for Uber for X failures
With the advent of Uber and its related services, we found that there is a considerable growth in the amount of the RFPs we received for the development of Uber-like applications in every other vertical viz education, sports, food and grocery, automobiles, fashion, beauty and wellness and trust me, none out of this is an off case.
Additionally, with more and more usage of mobile devices, there is tremendous of a race to tap into the mobile space of the users and ultimately make them tap into the services.
But instead of discouraging them we believe, Uber for X should be encouraged for every to-be-entrepreneurs striving to serve the customers matching the same loyalty as that of Uber’s.
The basic idea behind every solution involves turning the conventional demand loop by leveraging the maximum capacity of the service.
“You won’t live too long to make all the mistakes, learn from others!”
You see getting inspired by the charm of the successful verticals isn’t the only thing you should look for; learn from the ones who couldn’t make it through the top as well. That is when you will can smartly claim a definite position in the market.
The point built here is LEARN from the Uber Failures.
With a deep case study of the business model of some big Uber failures, we extracted some real revelation that could help you get your brand a big value.
Homejoy is an on-demand cleaning service for homes and office spaces by making use of independent cleaning contractors.
Problem with Homejoy
Couldn’t Retain Customers
In the same period of time, its fierce competitor managed to retain customers and it lagged behind.
Expansion Happened Too Fast
Thus, in order to please the investors, it went on expanding its service as close as 30–36 cities in six months.
Now the customer retention was not happening to Homejoy, and ultimately the expansion turned out costly for it.
Not allowed to train contractors
Some cleaners were even reported of not having any cleaning experience.
This was enough for the customers to uninstall the application with bad ratings of course!
Ended up inspiring the wannabes with its failure story
Exec is an on-demand service for providing workers to do any kind of random work.
Problem with Exec
Serve all possible jobs
This indeed proved costly in the end for the company itself.
Apart from this, the demand for the workers was at its peak during weekends and holidays; on the other hand the errand workers were unavailable specifically during the time and so employees had to be sent to serve the customers.
Economics Gone Wrong
Most of the expense for Exec went in software engineers for improving the quality of the application.
The commission they charged was 20% and the costs for customer acquisition, customer service, and recruiting sufficient supply had to be paid from this considerable amount.
Profit became as imaginary as their perception.
Rivet and Sway
Rivet and Sway was an on-demand service for providing eyeglasses to the women who were stylish and fashionable.
Problem with Rivet and Sway
High Customer Acquisition Cost
Women wanted to try the frames before purchasing them, which lead to increase in the shipping the glasses back and forth.
Though the idea was worth to make it through the business, the progress wasn’t strong enough to attract additional capital.
Heavily Funded Competitor
If at all Rivet and Sway could have been invested, it would have gone hyper-efficient in launching online showrooms not yet online shopping stores but ended up being shutdown.
All that it taught is – Keep your audience close, competitors closer and investors at the closest.
HelloParking was an on-demand service for enabling people to share their parking spaces.
Problem with HelloParking
Unclear about the business idea
The problem was clear and meaningful hypotheses, experiments with the exceptions and the need of the end-user was never taken into consideration.
Inability to Scale Up
This problem and the mindset was not diagnosed by HelloParking.
This gap of not delving into the user’s space, got their space vacant for years to come and go.
Tutorspree was an on-demand service for providing tutors on the basis of the subjects.
Problem with Tutorspree
Single Channel Dependency to Acquire New Customers
Thus, it put its efforts in devising other model making the use of SEO tactics but the budget within the Tutorspree was hard enough to push on to the other channels.
Having lost the opportunity to teach the students, they ended up teaching the business lessons to the new Uber entrepreneurs.
Addressing the Solutions to Uber Clone Businesses
In the vying journey to create successful platforms for the Uber for X model, we narrowed down the most critical factors which can govern the road to success for your Uber startup.
Have a look at the factors mentioned and stay cautious towards your Uber goals.
1. Right Problem Statement
Figure Out ‘Why’
The best advice for the startup is try to figure out the true calling of why you think your business is NEEDED to be established?
On the other side, figure out why the customers will prefer you.
Ultimately, what really matters is that your business should be able to bridge the gap between the service and the demand of the customer.
Talking about the Uber business model, it deals with both the service providers and the customers and tries to meet their needs.
So when setting out to Uberize your startup business it is important that the problem you try to meet should be feasible and acceptable by both the front stakeholders.
2. Unit Economics
Even though you are funded quite well, it is important for the startups to dwell into the business well before going on the expansion.
As important as funding may sound to you, but equally important is the customer acquisition for the business and then expansion can be planned.
As easy it may sound for Uber, the revenue model for your particular Uber for X might be different and so a rough analysis about the unit economics should be made about where the cut from every transaction is to be made.
Frequency of Usage
When you are finalizing the niche for your Uber startup, what you need to look out for is the customer frequency of the service usage and the transaction made within the application.
Once the analysis about the customer base is made, progressively the data can be used to analyze the customer retention rate.
3. Reaching the Critical Mass
With launching the applications on more than one platforms, reaching to a considerable amount of mass is the first landmark that any startup should target for.
On-demand service startups
The critical mass accumulation can be ensured once the loyalty of the customer’s retention and the efficiency of the service providers when they reach a certain level.
4. Right Design Choices in the Business Model
Scheduling Vs. Instant
The right design choices are extremely necessary for any Uber for X model since every model strives to choose the right model that makes it different from the rest.
For a scheduled design, it is easier when the startup is bootstrapping a business.
When going for instant, it puts more pressure on the supply-side infrastructure.
Aggregated Vs. Integrated Supply
There are two types of service providers: Freelancers and Contracted Supply.
While the freelancers help in providing external strength to the business, the contracted suppliers are more reliable for the business.
Hence, keeping in mind the frequency of your on-demand service, you should go for investing in targeting whichever supply resources compliments your business to its core.
Without delving deep into the knowledge of the domain and the niche, it is next to impossible to design a seamless flow for the business.
Considering the consistent experiments and innovation in the domain, it is important for any business persona to hold a knack of what he is about to commence so that he could extract deep insights and hold a futuristic view at the time of expansion.
Apart from these factors, it is really important for the startups to keep in mind the best dominant request platform for their on-demand service.
Total Addressable Market Size
Talking about Uber, it first started serving the ones that already use the taxi service by launching black luxury car and later introduced its service to the people other groups of people.
While your business is in its initial stage of development it is important for you to target only specific audience.
Summarizing, the application is to be taken into consideration from the point of the front stakeholders, unit economics, customer acquisition, frequency of usage, transaction frequency within the application.
In order to be a clone to any business, all that is important is an insightful business plan with an ample of space for innovation and quality service.
Just like the Airbnb for X businesses innovated from the Airbnb business model.
The way Uber gave its audience a prime importance is a lesson to learn and implement for all the budding businesses.
The key takeaway is to make sure you inspire the business buds with your insightful Uber for X success story and not a failure story of mere replication. After all, the business world today works on the revolutionary ideas.