Why Uber won Eastern Europe - an urban anthropology study case
In a previous article I was writing about the importance of using different value propositions when entering a market as an imperative for success.
A great case study about how unique our cultures & societies are is Uber. Applying Urban Anthropology (with a focus on the political & economical dimensions) to understand what happened with Uber in Central & Eastern Europe tells a much bigger & insightful story than Gross Revenues will ever do. You can try:
Here comes the cool part.
Truth is that Uber didn't expect for Eastern Europe to become such a successful market. Nobody thought that. Especially in a country with one of the slowest GPD increases & income per capita in the European Union. The management was taken by surprise, as their officials have said themselves.
Uber didn't study expansion through the lenses of Urban Anthropology nor did they apply a value proposition to the market other than their traditional global approach.
But the people have done it for it.
Uber's growth approach in Europe was a Divide and conquer strategy in countries with ambiguous transport regulations.
Romania was the last Eastern European market Uber entered.
The list represents the Uber market in EE. Green highlights main cities in Hungary, Poland & Romania.
In only 2 years, the Romanian business became much more profitable than Poland (through Poland has x2 the population of Romania and it's the economic engine of Eastern Europe). More than that,Romania is now the 4th largest market for Uber in the entire Europe.
Let me tell you the story through the anthropology perspective.
Romania is facing one of the most challenging urbanisations in Europe. Its cities have not been designed for these amounts of people, nor its streets (and the trend is still on the rise, as 45% of the population still lives in rural areas).
The poor government management of the situation (with bills passed without any feasibility and/or forecast assessments - won't go into more details) has led to:
For the people: sever traffic congestions, air & noise pollution, lack of parking spaces etc.
For the mobility businesses: a fertile playground for corruption & self-made regulations
Indeed, it's a global truth that cars come with a much more higher comfort than a bus will ever provide, but people weren't driving on the streets of Bucharest because they loved their cars. But because they had no other option: the public transport was (and still is) poorly allocated & connected.
The taxi was, until Uber, the only viable option if you didn't want to take the public transport. But the taxi operators are one of the biggest corruption engines in the capital.
Just to give you an example - also in correlation with Uber - end of 2017, Uber paid to the Romanian state x3 times more in taxes than all the taxi companies registered in Bucharest (41.555 EUR versus 13.605 EUR).
Corruption in the taxi system meant not only dynamic fares these companies could apply to customers (e.g. you get in for an amount and you can't get out at the destination if you don't pay triple), but also quality problems - from car to ride conditions.
After 25 years in the Communism, all these people wanted was to be treated right. Respected. Not taken by fools. Have control. Feel empowered.
And this is what propelled Uber. The people driving were people-like-me. Uber was a synonym with Western values. Where people mattered, and did not have their rights abused.
No longer had we to always check if the driver took the not-the-longest-way to home. We had a third party (Waze until 2017, now GoogleMaps) deciding for the route and that gave us a peace-of-mind.
We had more trust in technology than in the people.
After 3 years and another 4 mobility services launched in Romania, the mayor of the capital wants to ban all mobility services provided through mobile apps."If they want a cab, people should call into the call center.", the major said. Why you ask? Because mobile apps allow mobile payments. And mobile payments imply a clear & transparent financial activity. Which is the contrary to how the system works.
Pause. It was late and wanted to get home faster. So I opened my app folder and instinctually opened Uber instead of MyTaxi. There's no actual difference in Germany between the two, so people started asking me why. And it hit me on the way home. Uber is a love brand. I was born and raised in a country where Uber was one of the first brands that showed us (me and the +2 million of people who participated in the street protests last year) how to live in line with a set of standards.
Play. The story could go on looking at how, once you've overcome this growth momentum, you drive growth in countries where the good life is already a reality and most of the means of transportation fight on points of parity.
PS: Taxify is mainly run by regular taxi drivers. And this is why Taxify will always come second.
Article published on LinkedIn
