Uber started in 2009, Earlier it is known as UberCab. Its launched to evolve the ground transport services.

How Uber Works, Uber business model is an on-demand transportation service which has brought a change in the taxi industry all over the world. The business model of Uber has made it possible for people to quickly tap their Smartphone and have a cab arrive at their location in the least possible time.

Uber is an on-demand taxi booking services which are operated through a Mobile Application. The term ‘Uber’ simply means ‘Above’ in German. Ever since it began Uber business model has focused on staying at the top of the competition and so far they have been successful.

Uber has been valued over $70 Billion as it is one of the few tech companies in the world to achieve this. The Uber business model and Uber plan started with only one city in the USA and now grown to be spread in more than 633 cities all over the world. Uber has already got an equity funding of $22.2B

These facts show that Investors easily trust Uber Business model it’s easy for us to imagine how much revenue will the company be making once it attains liquidity.

In this post, we’ve had some unknown facts and figures along with a detailed explanation about the model by which Uber earns money and does business. For budding entrepreneurs, we have catered to the rise of ‘uber for x’ startups. Please read the whole article below!!

Uber Founders, Funding received and Timeline

Uber Founders: Travis Kalanick and Garrett Camp.

Company Headquarters: San Francisco, California, United States.

Funding received by Uber: $22.2 Billion. (as of December 2017).

Company Valuation: Over $70 Billion.

Number of Users: More than 50 Million.

Number of registered drivers: Approximately 7 Million (as of November 2017).

Average number of daily Uber Trips: 1 Million

Timeline Of Uber:

How does Uber Revenue Generation Model work?

Once in a life, We all have travelled in a taxi, and at the end of the journey, we might pay the driver in Cash. The cash collected by the driver is the only source of income of the Traditional cab companies. Uber is no different business model than this, It has a similar business model and no other source of income than this. But the biggest thing is if it has more than 1 million rides per day. Now you can easily calculate the big numbers that the company earns on a daily basis.

Why Uber has so successful revenue model? It can be explained as follows.

1. Different cab models to cater to everyone:

Uber has different cars for different segments. Like these is Uber X, Uber Black for those who love to travel in the Black car, There are some others like Uber Taxi and Uber SUV for different peoples according to their choice.

2. Surge Pricing Technology:

Uber change its price according to the different situations as its an important aspect of Uber’s business model.

Whenever the demand inclined, per mile cost is automatically increased. The new cost depends on the number of available drivers and the number of requests made by a human who wants to travel. Most important, Uber has already applied for a price surge technology patent in the US.

3. Other Uber rides:

Uber has totally different from other cabs companies. Now, Uber mainly offers food delievery, goods delivery, grocery delivery and self-driving cars.
But, these means are only available in selected geographical locations but it has led Uber to add new streams of revenue into its business model.

Value Propositions


  • Benefits of drivers as an Additional source of income.
  • Drivers can work Flexible according to their working schedules. They Even Can work part-time or simply whenever they like.
  • Easy payment procedure.
  • People who like to drive can earn money while pursuing their hobby.
  • Uber pays drivers to be online, even if they don’t get any request.


  • No need to wait for a taxi for long times.
  • Customers can get free rides on certain occasions and discounts from time to time.
  • Prices lesser than the normal taxi fares.
  • Uber’s tagline says – Your personal driver. It lets customers travel in style.
  • Fixed prices for common places like Airport etc.

Customer Segments

  • Do not own a car.
  • Do not want to drive themselves to a party or function.
  • Like to travel in style and want to be treated as a VIP.
  • Want a cost-efficient cab at their doorstep.

Uber for Senior Citizens:

This is the very special service from Uber where it targets senior citizens. As per the different statistics, Senior citizens make for up to 30% to 40% of total rides in many cities. This made Uber have some special features for seniors and hence attract more senior citizens on the platform.

How Uber finds Customers. Explained in Detail ( Uber Growth Business Model )

Uber has managed to become the best example of a ride-sharing in just less than 6 years.

The underlying principle here is that for every city it launches, it faces the same chicken and egg problem. The advantages that Uber has as compared to new startups in this space are:

  • A lot of money to incentivize both drivers and customers.0
  • An already known brand that gets early curious adopters.
  • Every Company starts with a small city launch team. Every city has a General Manager who heads the customer acquisition as well as driver acquisition.

First customers for any company come from several local advertising channels like FM radio, newspapers, online advertising etc. But Now, Uber is such a big name that people are already waiting for the cab company to start services in their own cities.

Uber Business Model Canvas:

How Uber works explained in easy 4 steps:

Step 1 (Request a cab): The first step in the Uber business model is about creating demand. Peeps have a smartphone application which lets them request a cab instantly or schedule it for some time later.

Step 2 (Matching): As soon as the request is made on the Mobile application, a notification about your whole details like Name, Location etc. is sent to the nearest driver. After this, the Cab driver has the option to accept or reject the ride on demand of the customer. In case he rejects, notification is sent to another driver in that area.

Step 3 (Ride): A lot of features for Customers like they can track the cab when it is arriving and the ETA ( Expected Time ) is also shown to the customer. The meter starts as soon as the customer sits in the cab which can be tracked through the customer side app as well.

Step 4 (Payment & Rating): Once the ride is over, the customer gets an option to rate the driver. The driver has also the option to rate the driver. The rating system is an important part of Uber’s business model as it lets a person know about the driver before booking a ride and helps him trust the driver.

Why Uber became so successful.

The problem with local Taxis:
There are lots of problems with local Taxis like people had to stand out on the Street side to stop a single taxi. Peoples suffer from the wait time, inconvenience and higher rates.

The Launch of Uber:
Uber has recognized the Ongoing problem easily and gave a technical solution to this through a Mobile app.

The Early Adopters:
Word of Mouth advertising
Main Growth opportunities tapped by Uber

Want to create the next big thing like Uber or On Demand taxi? Get in touch with us and know how we can help you.

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