The practice of hiring vehicles for transportation goes back to the 17th century.
Dateline London 1635, the Hackney Carriage Act was the first legislation passed controlling horse-drawn carriages for hire in England.
Dateline Paris 1640, Nicolas Sauvage offers horse-drawn carriages and drivers for hire.
The taximeter was invented by the German inventor, Wilhelm Bruhn in 1891. The taximeter measured the distance or time a vehicle traveled and allowed an accurate fare to be determined.
It is widely believed Gottlieb Daimler built the world's first dedicated taxi in 1897 called the Daimler Victoria. The vehicle came equipped with the newly invented taximeter and was delivered to Friedrich Greiner, a Stuttgart entrepreneur who started the world's first motorized taxi company.
By the end of the 19th century, automobiles began to appear on city streets throughout America. It was not long before a number of these cars were hiring themselves out in competition with horse-drawn carriages.
Soon horsepower was removed from horses, and natural resources would be the horsepower to move vehicles. Gas-powered taxis came first to Germany, Paris, and London, and then to New York in the year 1907.
The Travis Kalanick of his day was Harry Allen.
Allen created The New York Taxicab Company and imported 600 gas-powered taxis from France in 1907, and he borrowed the word "taxicab" from London.
To ensure his vehicles were full and quickly recognized, he painted his taxis yellow.
Flash forward over 100 years later, and we now have Uber.
A company which owns no vehicles.
A company which employs no drivers.
A company with a valuation of $120 billion.
This valuation makes the company one of the most valuable transportation companies operating anywhere on the planet.
Consider Uber's valuation is more than General Motors, Ford Motor Company, and Fiat Chrysler Automobiles combined.
At a $120 billion, Uber's is worth more than double the average of companies in the NASDAQ 100 Index on a price-to-2018 sales basis. It gives the ride-hailing company a multiple of about 12 times, compared with an average of 4.8 times for the index.
Big numbers for sure, but why?
Three reasons:
1. Global scale
2. Reduced friction
3. Reduced anxiety
Uber's global scale is stupendous.
Where Harry Allen was limited to the five boroughs of New York City, current Uber CEO Dara Khosrowshahi can provide transportation in 65 countries and over 600 cities worldwide, plus the company completes 15 million trips each day.
Uber has access to 3 million drivers who can move passengers from airports to city centers, from nightclubs to after-hour parties.
Also, as a consumer of the service, your experience and expectations can be harmonized regardless if you are in Indianapolis, London, or São Paulo.
Uber has dramatically reduced friction.
The premier etiquette organization, The Emily Post Institute, yes there is such an institute, recommends tipping your taxi driver between 15 and 20 percent of the total trip fare. Plus If you've traveled with luggage and your driver has helped you, it's proper etiquette to tip more. Beautiful, no set guidelines.
Also, you'll need to find out ahead of time if your cabbie accepts a credit card. If you don't make sure and you don't have enough cash, you'll have to leave your luggage and gear as collateral as you stumble around Singapore's Changi Airport at o-dark-thirty to find an ATM.
Hop in Uber anywhere, anytime, and you'll never need cash. You'll never need to fumble with credit cards and swiping. You can tip as suggested and even add commentary on the state of the car's interior and the cabbie's choice of music.
Uber has significantly reduced anxiety.
Most places allow a taxi to be hailed or flagged on the side of the street as it is approaching. Another option is a taxi stand. Finally calling a central dispatch office for a taxi ride is an option.
So ringing up a ride isn't new, even if it is via an app. Get an Uber is the same as call a taxi.
Uber didn't create new technology; it deployed consumer behavior tactics. Before 2009 users of taxis had no knowledge when a cab would appear on their street, when a taxi would arrive at your door, or who is behind the wheel.
Now with a comfort inducing screen and the anxiety-reducing Pac-Man-like vehicle avatar displaying your ride shuffling across a map to pick you up, you now have knowledge.
The knowledge that your ride will appear, when it will arrive, and who is behind the rule - plus the most anxiety reducing tactic - you can inform family and friends where you are in your journey and when they can expect you - further reducing their stress.
Lessons here for entrepreneurs and thought leaders:
Few ideas are new. Uber is executing the 17th century idea of taxis and the 19th century idea of telephones.
What is new are the tactics Uber is employing to execute these old ideas.
Having a service or product that allows you to be global from day one.
Having a service or product that allows you to reduce end-users burdens.
Having a service or product that allows you to reduce end-users uncertainties.
-Marc
Marc A. Ross specializes in thought leader communications and global public policy for public affairs professionals working at the intersection of globalization, disruption, and politics.
