How Uber's car-booking service can succeed in NY

The untested mobile car-service start-up Uber has launched in what's quite possibly the most difficult market in the country. Here's what it can do to win over those hardened Gotham hearts and minds.

Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
Caroline McCarthy
4 min read
Can Uber, a limousine-booking start-up that's encountered both opposition and accolades in San Francisco, make similar waves in the taxi-centric New York? CC: Flickr user shedboy

NEW YORK--I had my Uber moment a few Sundays ago, standing on a corner in the hipster enclave of Williamsburg, Brooklyn, with my arms full of houseplants.

It had been raining off and on all afternoon. The subway line that could most reliably take me back to my apartment, following a lavish shopping spree at the borough's most notable gardening emporium, wasn't running because of weekend construction work. My alternative was to take a route that would involve two different subways followed by a 15-minute walk. With the houseplants. Bedford Avenue, Williamsburg's main drag, is a well-populated thoroughfare, but because it's not in the city's central borough of Manhattan, the city's trademark yellow medallion cabs often aren't readily available.

My backup plan: Uber, a limo-booking mobile app that launched to rave reviews in San Francisco and had recently embarked on a "secret" beta test in New York. I'd been skeptical of Uber's usefulness in a city with less expensive medallion cabs everywhere and typically top-notch public transit. But this was a moment when I could really have used it.

Unfortunately, a message popped up to tell me that there were no Uber cars available. I waited for another 10 minutes before, fortuitously, a yellow cab pulled over to drop off its current passengers, freeing the car up for the plants and me. But that wasn't the end of my Uber saga: Two days later, I received an e-mail from Uber apologizing that they hadn't been able to dispatch me a car (their beta test in New York was with a limited fleet of cars), and so my account had been credited with $10.

It was a nice touch. More importantly, it was the sort of tactic that could seal Uber's chances at success in New York: a friendly gesture in a city where the lifestyle is fast-paced and unapologetic. In New York, where it formally launched this Wednesday, Uber is not tackling a void in the market the way it is in San Francisco, where taxis are difficult to find; no, in New York it's trying to create that market.

Customer loyalty is a good place to start. By crediting me $10 after an Uber-fail, the company made it much more likely that I'd try the app out again. Or there are nifty possibilities for rewards, including socially responsible ones, like something I suggested via Twitter: Let customers request a hybrid or otherwise eco-friendly Uber vehicle, even if it means the car could take a little bit longer to arrive, and after a handful of rides in Uber hybrids, they receive a thank-you in the form of $10 or $15 in credit.

Something else the company could consider is making its service available to the organizers of smallish events like corporate board meetings, weddings, and fund-raisers. On Tuesday night, Uber hailed its arrival in New York with a dinner at an upscale restaurant for local tech-industry regulars, giving each guest a promotional code that could be redeemed for a free Uber ride to and from the get-together. By creating a way for others to replicate this process, car service to and from events (especially those where participants are expected to wind up tipsy) could become a powerful marketing tactic for the company as each guest becomes a new Uber user. Some New York-based companies also have arrangements with car services to provide rides home to workers who are at the office late, another potential market Uber could approach.

What this all adds up to is the fact that just offering a slick cab-booking service won't be enough in New York, where the routine of hailing a cab on the street is fully ingrained in habit--and locals are well aware that traffic is routinely so bad that taking the subway is faster anyway. In San Francisco, Uber was a godsend. In New York, the company will more or less need to make the transportation establishment look like it's stuck in the Stone Age. It's a pretty difficult task, especially since the Taxi and Limousine Commission is a powerful force in the city, and one that Mayor Michael P. Bloomberg is investing in heavily--on Tuesday, just as Uber readied its New York launch, Bloomberg announced that in 2013 the taxi fleet would have the new addition of Nissan minivans with the option of converting to plug-in electric vehicles.

But as some medallion cab drivers protest the inclusion of GPS trackers in their vehicles, citing privacy concerns, there's no such problem at Uber. Since both drivers and riders conduct their business through the use of mobile devices, Uber says the data is on its side. At Tuesday's launch dinner, Uber CEO Travis Kalanick flipped through a slide presentation that consisted mostly of maps the company had generated of where and when they'd perceived demand. Rainy days were big. So were neighborhoods in Brooklyn, like the one where I'd found myself stranded with two thirsty potted palms.

"Never underestimate the power that math, modern technology, and a beautiful product experience can have on a mature industry," a company blog post Wednesday explained. "We're going after age-old NYC transportation problems with PhDs in tow, applying routing algorithms, innovative homegrown supply chain management solutions, sophisticated statistical analyses, minute-by-minute heat maps of expected demand, supply positioning, the works."

Does Uber have a chance? Absolutely, and judging by early signs, the company seems to have the right idea. It understands that New York traffic could undermine its claims of an "instant" ride, that there are parts of Manhattan where a yellow cab is available pretty much whenever you might want it, and that this is a huge city that doesn't change its ways easily. The ability to understand these things is the first step.

Getting a cab in New York typically isn't an ordeal. But in order to succeed in New York, Uber's going to have to make it seem like it is.