U is for User, Uber #DeleteUber: a lesson for startups
You are CEO of a wildly Popular ride-sharing service with one major competitor. In fact, you are such a leader that people say your company name as a verb. Uber has it all, a multi-billion dollar valuation and the prestigious moncur of "deca-corn"
(because it has raised money at a valuation over $10B and is still a private company), they are media darlings, and like I mentioned, their name is a now a VERB in everyday language! Let that sink in...and a long comes #DeleteUber.
Uber's closest competitor is Lyft and I'll bet you the number of times you've heard "I'll just Uber over" dwarfs the number of times you've heard "I'll just Lyft over". That statement would most likely get the response, "lift what?". At least that was the case until a fateful decision and a CEO not stopping his company 's quest for money for 1 night, in 1 city, to 1 airport, for 1 hour. It seems, Uber and Travis Kalanick lost sight of the most important part of ANY tech startup, KNOW YOUR USERS!
Let's get some perspective on the situation...
The code written in any app is all "on the shoulders of giants", well more like the shoulders of all the coders in the world, but I digress. Some examples of this community mindset are things like open source software, prestigious institutions give away their lectures, such as Harvard, Stanford and MIT, there are entire communities of coders helping coders like StackOverflow, just to name a few. Another sign of the community aspect of the tech startup scene is their need for capital to even stay alive makes them necessarily dependent on not only other coders' work to build on top of, but also they are reliant on the user and their feedback/recommendations to obtaining the fabled "virality" to grow as big as Uber. Working in tech? More community with shared work spaces and incubators & accelerators accepting very little money and in the case of some incubators investing money to help startups succeed. The amount of innovation available in the world is immense. You MUST stay vigilant and even if you're Uber, you need to remember to take care of #1, your users.
Agile development is how tech startups developing software (apps and other types of software, so basically every one) keep the user in the center of the process and is undoubtedly the practice at Uber. Which makes this Uber problem, "Uber" ironic (that one was really bad, sorry). I'm qualified to talk about this because I'm knee deep in user needs, desires, dislikes, and sometimes irrationality. Our membership plan follows agile methodologies by giving a team of development veterans and experts for a very reasonable price ($495/m). So, we deal with bootstrapping startups focused on users to stay alive. The reason agile is so popular is that it is user-centric. No longer do CEOs strive to make money first and foremost, in fact, they do the polar opposite and actively avoid it (mo money, mo problems). Amazon was founded in 1996 and only turned a profit nearly 10 years later. This is done by re-investing and adding to the offerings (Google, SpaceX, & Blue Origin -Amazon- are all examples of this among many others from these companies). Uber themselves are a cash spending cow with $2,000,000,000 (-$2 BILLION) worth in the hole! Suffice to say, the dollar has lost its power in America's equity market ever since August 9th, 1995 when Netscape changed the economic future of the nation.
Utterly Uber; Unapologetic
So, Travis Kalanick, CEO of Uber, has a reputation of doing things his way, to put it nicely. This never seemed to be a problem and Uber was most definitely winning the battle against Lyft (see the picture to the right). Then, Mr. Kalanick accepted a position for the Trump administration on an economic advisory board. This was seen as no problem, it is imperative we as a country have the best tech companies involved in economic decisions. Elon Musk as well as many others were also there. However, there were rumblings and they began to grow louder as time went on and further actions by Mr. Kalanick.
On January 25th, 2017, Mr. Kalanick sent out a message to Uber's employees, but again was given a pass by his employees and users, that most definitely are not Trump supporters (more on that in a minute). By profiting off of this by not raising surge pricing (Uber's way to get Drivers and themselves more money when demand is high, like during a Taxi Strike!). Basically, Travis Kalanick did what a CEO of the Gordon Gekko era would be commended for doing, the problem is the tech Community is just that, a community, not every man and woman for themselves.
Uber Unrest Under 35
The outrage in the United States over the immigration plan put into effect through executive order by the new President Donald Trump. Donald Trump lost the election by nearly 3,000,000 (2.9M) votes, but due to the Electoral College still won the Presidency (if you aren't from America it really is as confusing as it sounds). However, Trump lost the young vote by a large margin, which just so happens to be the majority of Uber's users.
On Saturday, January 28, 2017 this tweet was sent out:
Uber has had its difficulties with the authorities and cab unions in the past. Winning some battles and losing others. This one, however may prove to be the most unexpected and biggest lesson in user-centric development in recent memory. Uber's CEO and other board members made a decision to NOT suspend their surge pricing. If you aren't familiar, this is how Uber makes their drivers and themselves more money when demand is high, like, say, during a taxi strike at peak hours going to an extremely busy airport. Uber was cashing in and doing their Gekko dance, for a moment.
Uber's Users Unite
Very soon after this fateful decision, Uber found out the power of ignoring your base's needs. #DeleteUber began trending on Social media and then soon after Lyft rocketed to the top of the charts on Apple's app store. This is not a mystery or even shocking. In fact, the tech startup world (software startups especially, like the Uber app) has a built in process to handle these issues called agile development. One of the core metrics (probably the most important) is that the users' engagement and that mandates that they are at the center of every penny spent and every experience tweaked. For Uber, the writing was on the wall, they had young users and anything that wasn't in solidarity AGAINST Trump was seen as hostile, right or wrong that's how it played out. A majority of their users do not like Mr. Trump and this issue was one of the major wedges between the newly minted President and the demographics Uber relies on.
So, by not stopping Uber's pricing system on that Saturday in late January for that 1 hour in that 1 city, #DeleteUber started trending & their competitor Lyft jumped at the chance to pour salt in Goliath's wound by donating $1,000,000 to the ACLU. This is barely a drop in the bucket for a Unicorn in its own right, Lyft (Million dollar valuation as private company) and the user growth has been off the charts in the aftermath. As of 1/30/2017 Lyft rocketed to the top 10 in the app store.
Did stubbornness hurt them, missing the tweet, greed, a combination of all of them? Will it even hurt them beyond the immediate aftermath? That is hard to tell and I don't know, they are a private company, so we may never know the details. We do know the Lyft app had more downloads than Uber on iOS in the U.S. for the first time ever Sunday. Also, daily iOS downloads for Lyft that Sunday more than doubled its average daily downloads from two weeks prior. In fact, that same day, Uber offered to compensate drives impacted by the new immigration rule.
What I do know is if your users overwhelming don't like one person or thing and that one person or thing does something that ignites rage, you should NEVER exploit that for monetary gain in the tech space. Users have too many alternatives and attention spans that are less than that of a goldfish!
No matter how large you are, you need to keep the users #1, because even doing your civic duty and (possibly) missing a tweet can bring the world crashing down around you and you aren't Uber with their money, can your app survive?