Few startup successes have been analyzed time and time again like that of Uber, the app-based car-hailing service, which is often credited with changing the transportation industry.
After six years and one dramatic brand overhaul, there is still some debate about whether the company can still be classified as a startup.
But new markets, new products, and tens of thousands of new drivers and employees each year all indicate an ambition distinct among tech startups.
While new Uber might not look the same, their growth strategies reveal a company, which is still establishing its roots across the world, and a business model that tests the conventions of its industry.
Uber’s success is frequently attributed to its use of disruptive technology and addressing common industry pain points, but these aren’t the only factors influencing their growth.
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Uber is able to draw from a wide pool of potential workers with compensation and perks that compare favorably with other jobs in the transportation industry, tapping into a workforce, which includes ex-cabbies and those who have never held a driving job alike.
Accessible employment requirements, data-driven management, and a seemingly inexhaustible market of new drivers mean that Uber is able to predict supply and meet demand swiftly.
However, it doesn’t take Uber’s specific business model to implement their hiring strategy.
In many ways, their success predicts the continued rise of contract and freelance employment across a wide range of industries. In this post, I’ll discuss how startups can implement Uber’s management strategies to reduce costs and foster growth.
Stay Flexible With Outsourced Help
One of the company’s greatest keys to growth is their employment model. From a traditional startup’s perspective, drastic shifts in demand can lead to strained resources, stilted growth, and unmanageable workloads.
Meanwhile, Uber’s methods allow them to adapt to changes in demand seamlessly.
While the freelance nature of driving for Uber may seem like a detriment to some, Uber drivers create their own schedule and drive their own vehicles, a feature which eighty-seven percent of Uber drivers claim as a major reason for using the platform.
However, a key difference between those drivers and the freelance economy in general is that while Uber may be seeking individuals who don’t require special training or expertise, the most in-demand skillset among freelancers is technical and creative talent.
Nonetheless, freelancers are an essential asset in meeting the daily rigors of managing a startup. This is especially true for bootstrappers who don’t necessarily have the resources to train or provide hardware for fresh hires.
As Upwork SVP of Marketing & Categories Rich Pearson puts it: “For entrepreneurs with so much on their plate at any given time, and not necessarily all things they’re good at, bringing on a project-based employee is a great way to knock tasks off one at a time.”
Use Technology to Manage Your Workforce
One of the greatest pain points in using contracted or freelance workers among startups is a lack of resources and protocol in managing work quality and productivity.
However, despite recruiting generally younger and more inexperienced drivers, Uber presents a technological solution in their model that has not only improved quality but is raising standards in the transportation industry as a whole.
While not exactly project management software, Uber’s use of their platform to manage and communicate with their drivers closely mirrors how a more traditional web-based business would employ software solutions with distance or outsourced employees.
Additionally, this platform is one of many sources of data which Uber relies on to make management decisions.
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Uber features a review system in which drivers and passengers rate each other; both passengers and drivers rate each trip on a scale from one to five.
Drivers that are rated poorly are flagged for intervention with management, whereas passengers who are rated poorly may get passed over from drivers the next time they hail a ride.
Importantly, Uber doesn’t just use their platform as a one-way avenue for complaints from passengers; they’re also interested in feedback from drivers.
This also includes a report function, which elevates incidences by directly messaging a manager about the case, enabling swifter, more effective service in the process.
Bring Your Own Car (...Or Device)
While Uber may have had its roots as a luxury service, their cost-efficient practice of allowing drivers to use their own vehicles is an essential component in how their business model works.
By leveraging the resources of drivers, Uber is free of maintaining their own inventory and manage a much lower overhead per driver than an average cab company.
It also happens to be an approach that largely mirrors BYOD (or bring-your-own-device) policies in traditional workplaces.
While BYOD mean that employees pay for and maintain their own property, workers are often more than happy to take advantage of these policies.
In fact, research indicates that BYOD generally tends to boost productivity and satisfaction at work. Coincidentally, these policies also tend to come hand-in-hand with the freelance and contractor market.
However, the rise of BYOD also carries risks that aren’t quite as simple to address as Uber’s inspection and insurance policies.
Startups using contracted help need to be aware of those risks, and address them with effective policy. You can read more about how contractors are impacting BYOD policy here.
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Entrepreneurs naturally seek inspiration from runaway successes as in the case of Uber.
From their inception to today, their hiring and management practices have played at least as significant a role in catapulting their growth as their use of disruptive technology.
And fortunately, many of their practices are at least in some way transferrable for startups in other industries.