Uber's Early Days: Insider reveals tactics behind rapid growth

Scott Gorlick, an early member of Uber's team, recently opened up about how the ride-hailing giant transformed from a startup into a multi-billion-dollar enterprise.

Gorlick, who joined Uber in 2012 as one of its first 100 employees, shared his experiences through a series of social media posts. He highlighted how the company, now valued at $140 billion and boasting over six million drivers, navigated the classic startup challenge of attracting both drivers and riders.

In its infancy, Uber faced a fundamental dilemma, in his words "without drivers, riders couldn’t find a car, and without riders, drivers couldn’t earn a living". Gorlick provided insights into how Uber addressed this issue.

To tackle the issue, he states that Uber employed several key strategies. First, when launching in a new city, he said they paid drivers $30 per hour to stay online, even when demand was low. This ensured that cars were always available, giving the impression of a busy and reliable service.

According to Gorlick, this approach was crucial to establishing a presence in new markets. It created a perception of availability that encouraged more riders to use the service.

Second, he outlines that Uber strategically positioned cars near bars and restaurants during weekends, targeting potential customers when they were most likely to need a ride. This tactic created a sense of ‘magic’ when a car would arrive within minutes of a request, contributing to Uber's reputation for convenience.

In addition to these tactics, he writes that Uber also incentivised users to refer friends, offering both the referrer and the referred discounts on future rides. This referral system led to rapid word-of-mouth growth. Gorlick noted that this approach was particularly effective because it created a cycle of increasing demand and supply.

These strategies, according to Gorlick, were instrumental in solving the company's initial dilemma and setting in motion a rapid growth cycle. Uber's success in solving the classic "chicken and egg" problem of startup growth showcases how a well-executed strategy helped Uber overcome early obstacles.

Gorlick summarised the approach in three key points: paying drivers hourly until there were enough riders, positioning cars in busy areas for faster pickup times, and encouraging riders to refer their friends. These tactics created a growth flywheel, where increasing numbers of drivers and riders fed into each other's presence, driving rapid expansion.

The insights provided by Gorlick reveal more about his experience of the early days of Uber and the strategic thinking that partly led to its growth in both drivers and passengers. Will other taxi and ridehailing newcomers facing similar challenges follow the company's approach? By creating an environment where both drivers and riders benefited, Uber was able to build a robust network and achieve rapid growth.