Meet the 2.0 car service: Uber is a start-up that lets you book a stylish ride from a smartphone app.
Imagine your flight arrives four hours later than expected. The airport is closed, and without a single cab in sight, what do you do?
Soon you will be able to pull out your smartphone and order a black car directly from an app. You'll be picked up, and on your way to your hotel in less than 10 minutes.
"San Francisco cabs are very difficult to find," says Travis Kalanick, co-founder and CEO of Uber. "You get stranded all the time."
Out of that frustration, the idea for a car service available wherever and whenever you need it was born.
That's the goal of Uber. The San Francisco-based start-up, which launched in June of 2010, has a small staff of 20. Kalanick is a serial entrepreneur who partnered with Garrett Camp (who also founded StumbleUpon, a Web toolbar that prompts users to discover content) to create Uber. Initally, Kalanick and Camp bootstrapped the service, investing personal savings and their own "sweat equity," as Kalanick likes to say. In October of 2010, Uber earned $1.25 million in angel investment, and in February it raised $11 million more from Benchmark Capital.
Currently Uber's private car service is only available in San Francisco and New York, but the service is expanding this year to Boston, Chicago, Washington, D.C., and Seattle, says Kalanick. He also has plans to expand the service globally to Europe and Asia.
Uber is not a typical taxi or limousine company. Instead, it operates as a dispatch service, working with local private car companies. How does it work? Uber provides each participating car with an iPhone and software that manages requests. When an Uber user needs a ride, the dispatcher and the closest car are notified, and the system sends back an estimate of the pick-up time. While you are waiting for your car you can monitor the location of the car from your phone. The Uber software relies on Google Maps API and GPS technology.
When you sign up for the service you can associate your business credit card. So whenever you use Uber, it automatically pays for the ride (including tip) from the app. A receipt is immediately e-mailed to you at the end of the trip. You can also rate the driver and leave a comment about your ride on the app. And if you lose the e-mail, your travel history is saved on the website to be able to reprint your receipt. In short, it's ideal for when you are doing your expense report at the end of a business trip.
Uber charges a base fee of $8 in San Francisco, or $7 in New York, and then a rate for the time or distance traveled, depending on the car's speed. There is a $15 minimum for each ride, and tip is included in the price. An average trip in New York, with tip, should cost about 1.5 times as much as a taxi. Depending on the city, that makes it comparable to other private car services, says Kalanick. He's hoping people will find Uber's convenience worth the additional cost.
"Let's take San Francisco for example, it's hard to get a ride and because there are inefficiencies you can't do as many meetings in a day," says Kalanick. "So for a city like San Francisco you can go from 45 minutes gaps between meetings to 15-minute gaps between meetings and your time is money if you are a business traveler. The value is the efficiency as well as the elegance. It's a no-brainer."