So You Want to Build the Next Uber App?

by: | Mar 17, 2015

“We are going to be the Uber of X and want to create an app”

We hear this from potential clients all the time. And it’s understandable. Companies are starting up every day looking to take the success that Uber has had with ridesharing and replicate it in other industries.

Meanwhile, there’s a lot of talk these days about Uber as a platform. For example, one recent story on Uber’s blog revealed its new food delivery service platform in Barcelona. Here are some other recent headlines about Uber, the platform:

With all of the platform talk, you might be thinking that you can license the Uber platform and magically your app idea will be easy to build. But Uber isn’t really just a technology platform — it’s actually several platforms that are much more than APIs and software. They are also about people and processes and operations.

These platforms include:

  • a (physical) network of vetted drivers and cars
  • an online marketplace that intelligently connects buyers and sellers
  • a backbone for a free-agent sellers economy, giving solo practitioners a tool to make a living on their own — without corporate overhead
  • a place for buyers to find services at competitive and transparent prices
  • an ecommerce system that accepts money from buyers, and pays sellers
  • a feedback and rating system for both buyers and sellers
  • an infrastructure and an operations staff to support millions of buyers and sellers, 24×7

In other words, there’s no simple way to copy Uber and reskin it. But that doesn’t mean your Uber-ification business idea is dead.

The Ingredients to Any Successful App-Based Business

Uber App IngredientsSo what would it take to create the next Uber? The ingredients to Uber’s success certainly include all the platforms noted above. But even that’s not the whole of it.

We help our clients think through the implications of an idea and understand that to be successful they need to think beyond any platforms or apps. There are three pieces to having a successful app-based business: building it – strategy, design and engineering (the app development services that we offer), marketing it (including positioning, pricing and promotion), and running it (the ongoing operations and improvements).

Building an Uber Starts With an MVP

ArcTouch eBook: From Great Idea to Successful Mobile AppBefore you get started building an app, you should identify a customer problem and align it with a business opportunity. We help some clients with this with our Strategy practice, which includes taking the beginnings of an idea through a discovery process. In discovery, we’ll break that idea apart, and get to the core of what that drives value for your business and your customer. Then we reconstruct the idea into a minimum viable product (MVP) and get alignment from all stakeholders on the precise feature set — a.k.a. “definition” — of that first release.

Next, we plan and execute on the MVP, from design through engineering (you can read more about our app development process in our ebook here). We’ve built apps that use platforms similar to the Uber platforms listed above — and we’re certainly well capable of doing again. But for you, that’s just step one.

Marketing an Uber Requires Domain Expertise

Just building out an equivalent Uber-like app and related platforms does not mean you can suddenly be the next Uber. Creating initial interest and growing a startup from the ground up is the real challenge. For every dollar that the original Uber app may have cost, the company has spent many more to market and sell its ride-sharing service. Here’s a good piece on the backstory of Uber’s early days, including its MVP as a luxury car service in San Francisco.

To be successful in selling an Uber-like service for a different industry, developing authority and building relationships in that industry is key. For example, if you want to be the “Uber of car detailing” and your vision is matching people who have dirty cars with people who are professional car detailers, you need to be an expert in the car care industry (we call this “domain expertise”). It’s only with this expertise that you can outmaneuver and out-market any competitors who want to create a similar service.

Running an Uber Demands Scalable Infrastructure

Running an Uber-like service is probably the most challenging part of the business. Uber-like businesses face a classic chicken or egg problem. You need an abundance of service providers to attract customers, but without customers how can you entice service providers? Do you try and scale on a national basis, or establish a beachhead in a specific region first? Again, domain expertise in a particular industry can help here. If you know how car detailers think and what motivates them, you will be better able to address their needs early on and attract them to your service.

As an Uber-like business grows, the product platforms (the apps, the customer service, the backend, etc.) need to grow and scale with it. The infrastructure to support your first 100,000 customers is much different than what you’ll need to support 100 million customers.

Your app also needs to evolve. You can’t just ship an app MVP and and expect your business to grow on its own. Usage analytics and customer feedback will help you iterate and improve your products, guiding investment in the features your customers love and use — and helping you cut support for features that aren’t being used. Iterating on the app helps you delight your customers — and delighted customers become your extended sales team, which makes selling and marketing your service much easier over time.

The Uber Platforms — What Can be Leveraged?

diving-platform There are lots of industries that are ripe for Uber-style disruption. But hopefully by reading this post, you now have a better understanding that it’s not as simple as building an app. We want our clients to understand the implications of building it, marketing it and running it.

That said, there is something to be gained from Uber directly. Uber has offered up developer APIs that allow companies like United and TripAdvisor to connect Uber ride-sharing services to their mobile apps. Just today, Uber updated those APIs so the full Uber ride-sharing service can be included within other apps, instead of only “stuff like send destination addresses to the Uber app, view trip history, and estimate pickup times.” (VentureBeat)

It’s conceivable that Uber could start licensing its other platforms — like its e-commerce engine or marketplace match-matching — to other aspiring Uber-like startups. This could give you a boost with some off-the-shelf capabilities you don’t already have, allowing you to focus more on your unique app’s design and development. All the stuff that makes your idea great. It also means you could allocate more of your funding to developing a service provider ecosystem and marketing to potential customers.

But Does Uber Want to be the Uber of X?

It’s also possible that Uber has its own aspirations to take other services, like the food delivery experiment in Barcelona, and make them mainstream. Of course, that food delivery service is really an extension of their existing drivers platform. The real question is, could Uber become the Uber of:

  • car detailing
  • pet grooming
  • housecleaning
  • home maintenance
  • babysitting
  • medical care / dental care
  • grocery shopping
  • etc., etc.

Uber has proven technology platforms, a well-known brand, and tens of millions of existing customers (so, it’s less of a chicken-and-egg problem to attract service providers in new industries) with credit card numbers already on file. All Uber would need is to invest in domain experts who can help with its marketing and customer support.

Time will tell. And like almost every aspect of the mobile industry, things are moving fast. So if you have an idea for a new app — whether it’s the Uber of X or a totally different concept — contact us and let’s talk. We’re always happy to help.