Since its inception in 2009, Uber has quickly skyrocketed to the status of international behemoth in the transportation industry, with recent estimates putting its value at over $50 billion. While there are many reasons for the company’s success – not least being its arguably unfair disruption of the established taxicab industry (beyond the scope of this article) – one thing that particularly impresses me is Uber’s innovative use of partnerships. By teaming up with established organizations, Uber has been able to propel itself off the success of its partners and become increasingly more relevant in the eyes of its customers. Uber’s use of partnerships is not limited to its consumer marketing either – the organization is leveraging partnerships across all facets of the business to achieve both short and long-term objectives.
Last week Uber announced that a marketing partnership with Air Miles in Canada. The partnership featured a one-day promotion where anyone using an Uber on October 15th received an Air Miles card containing a mystery quantity of miles, and was entered into a draw to receive enough miles for a round-trip for two within North America. The partnership also rewards new drivers going forward, who can enter a promo code when signing up to receive 100 Air Miles. While seemingly minor on the large scale, promotions like this allow Uber to affiliate with a broadly-recognized brand, improving its public image, while boosting ridership and new signups.
Uber works hard to advertise its 5-million driver liability coverage for UberX trips. What is less commonly known, however, is that when an UberX driver is “on duty” but not carrying any passengers, the driver is assumed to be primarily covered under personal insurance, and Uber “backup” coverage is limited. The problem is that many insurance companies don’t provide clear coverage for drivers who participate in ride-sharing programs, potentially putting the driver at risk. To address this, in January 2015, Uber announced a partnership with Metromile, a pay-per-mile personal auto insurance provider. Under this partnership, UberX drivers who purchase personal insurance with Metromile are covered for 100% of the time while they are not carrying passengers, thus filling the potential gap left by other companies.
Research and Development
Uber CEO Travis Kalanick has been clear for some time that Uber is very interested in replacing its fleet with Autonomous vehicles in the future. In pursuit of this, earlier this year, Uber partnered with Carnegie Mellon University (CMU) to create the Uber Advanced Technologies Center. The Center will perform research and development, primarily in the areas of vehicle safety and autonomy technology. This past month, Uber took the partnership one step further, donating $5.5 million to CMU to support a new robotics faculty Chair and three fellowships. Accelerating development of autonomous vehicles is of high interest to Uber, as 80% of every trip fare currently goes to the driver of the vehicle. By instead operating a fleet of autonomous vehicles, trips could be offered to passengers at a small fraction of what they cost today. Imagine the convenience of a taxi-type service offered at a cost comparable to transit!
By establishing and leveraging partnerships, Uber has been able to enhance all facets of its operations. These partnerships enhance its brand, help it achieve its objectives, and represent strategic long-term investments. They span from an afternoon to years from now and the company is constantly innovating with new ideas. Larger, established companies and public organizations should view Uber’s use of partnerships as a remarkable example of how swift mobilization of ideas can yield fast, measurable returns. Rather than getting bogged down in months of review and approvals, sometimes it just makes sense to “just go for it” and see what happens.