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Uber bets big on Sri Lanka

20 June 2018 10:07 am - 0     - {{hitsCtrl.values.hits}}

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Joining for a discussion with Mirror Business recently, Uber General Manager Sri Lanka and South India Christian Freese and Uber Chief Business Officer India and Emerging Markets Madhu Kannan assured that Uber is committed to reshaping Sri Lanka’s urban mobility landscape while revealing several expansion plans are underway for the Sri Lankan market. 


Following are the excerpts. 


How has Uber’s business model evolved over time, keeping up with the new trends? 


Freese: The business model has changed pretty much. In the beginning, Uber was all about premium services. For an example, a luxury car, let’s say, a Mercedes, driving you for a day out, etc. However, we evolved very quickly once we grasped the much larger need to revolutionise the urban mobility. That’s what we are after right now.


We have seen a lot of innovations, which have been picked up and adopted across the board. We are in over 600 cities globally, in 65 countries and in Sri Lanka; it has especially been very good for us.


We think about our business and urban mobility as a whole. There are different stakeholders being part of it. The whole transparency we brought to the market wasn’t there before. We are also very excited about the convenience we bring to the market.


What’s Uber’s vision for the Sri Lankan market moving forward?


Freese: The large vision we have globally as well as for Sri Lanka specifically, is taking up on the private car ownership because the car has become the second most valuable asset you buy in your life. However, 96 percent of the time what it’s doing is standing underutilised or unutilized while occupying limited space in our cities. Moreover, car ownership is also relatively expensive in Sri Lanka, due to tariffs and taxes imposed.


I think that’s the larger vision. We have leapfrogged to no car ownership because it’s all about shared mobility in the future.


How has Uber fared in the Sri Lankan market over the last three years, since its inception?


Freese: We are now three years in Sri Lanka and we will celebrate our third anniversary in October. The growth has been phenomenal.


We have 60,000 riders using Uber on a monthly basis. So, it’s a pretty good beginning but we are just getting started here. If you really want to take on the private car ownership, it has to grow even further. The last three years have been very exciting; they have given us confidence. More to come, especially proud of the chapter we started with UberZip.


Last December, we started a new product, where we use very small cars – Nano, Alto, which provide even cheaper options to get from A to B. That’s actually triggering a lot of use cases. Before, maybe I wouldn’t go to the gym or take my kids to school with Uber. However, now with UberZip, it has become totally possible. We have seen really good growth since then and came to these 60,000 riders per month.


What is the key for success for Uber in Sri Lanka so far and how are you planning to get more involvement of the stakeholders to enhance the future growth prospects?


Freese: The key to success of Uber is being extremely local. Our driver base is very local and we have also invested in building a local team here. We are celebrating the local festivals with them and we have a programme where we try to build a community with our driver base. The initiative will allow the drivers to network and provide their feedback to us. It will be an opportunity for us to engage with them and understand what their pinpoints are.


I haven’t come across any idea or business where you press a button and make money. In many cases, it’s making a large impact for them, as the incremental money they are earning is empowering many of them to do much more than they were doing before. The incremental income is creating economic opportunities for them that are actually revolutionising even more than you feel on the riders’ side.


Do you consider it’s a good time for further expansion in Sri Lanka?


Freese: Yes, it’s a good time for us to reflect and push the pedal again forward. We are betting really big on Sri Lanka and that means renewed investments on the product, partnerships and people in Sri Lanka. We see immense potential to grow our business in Colombo and expand our presence in Sri Lanka.


As I mentioned, there are lots of issues around traffic congestion in the country. However, the big question is how we can connect the labour force to economic opportunities. We see a huge potential for us to double up and start a new chapter. 


What are the major expansion plans that you have on the pipeline for Uber in Sri Lanka?


Freese: We want to get broader and deeper into the market. What I mean by broader is thinking about other product lines. You must have heard of UberEats – the food delivery programme is something that we are evaluating at the moment. We are the largest food delivery provider globally, doing millions of deliveries per day and we hope to bring that soon to Colombo.


UberZip is our low-cost product, which is meant to serve you on a daily basis for your short trips. We will increase the services of UberGo and UberZip on the line.
We are also trying to form local partnerships and simultaneously we are also committed to building local teams, attracting local talent. Hopefully, we get more inbounds and we can hire stronger, going forward. The majority are bringing in that local favour.


We have already partnered with Dialog. The partnership is helping us a lot in getting new riders on board and we are offering exclusive fairs to the users of Dialog.
We really want to be there for every Sri Lankan. Right now we are limited to Colombo but our goal is to be there for everyone in the country, on a daily basis. We hope that we can commence that chapter soon.


We will also focus on tourist hotspots. I’m confident, over the next couple of weeks, most of the island will be accessible through the recently launched Uber Intercity easily and affordably.


Are you also planning to launch car pooling products such as Uber Pool in the Sri Lankan market?


Freese: We want eventually get there in every market. However, it requires a certain density. There’s some time out.  I believe it will work very nicely for Colombo because it’s a city that has stretched suitable for Uber Pool.

 

  • ‘‘Urban mobility is an important issue for many of the cities in emerging markets and therefore, we have a really important role to play in partnering with various entities
  • ‘‘We have 60,000 riders using Uber on a monthly basis. So, it’s a pretty good beginning but we are just getting started here. If you really want to take on the private car ownership, it has to grow even further. The last three years have been very exciting; they have given us confidence. More to come, especially proud of the chapter we started with UberZip
  • ‘‘We are betting really big on Sri Lanka and that means renewed investments on the product, partnerships and people in Sri Lanka. We see immense potential to grow our business in Colombo and expand our presence in 
    Sri Lanka

 


I’d like to note that car pooling is already happening with buses. Hence, the habit is already there. I am confident we can get there, not in the next couple of weeks or months but something we have planned to execute later on.


How are you maintaining the quality of the driver base while recruiting more to meet the increasing demand?


Freese: We have an on boarding process where the driver comes into our support centre; we provide all instructions, check all mandatory documentation, train them and we thoroughly monitor the driver on the first couple of trips. 


We also have the option for the riders to rate the driver. That’s a very important feedback mechanism to monitor the driver. Usually, when a driver receives poor feedback, we call the driver to our support centre, provide additional training and also check up on the issues that the driver has. We see a good improvement once the driver understands why he received a bad review. 


We have many drivers who are working on an office environment from 9:00 a.m. to 5:00 p.m. and work for Uber on their way back home for two to three hours.
When they leave the office, they switch on the app, drive for two to three hours and make that extra. Actually, they can type in their house. The app might not take them home straightaway but more or less will end up home while making two to three trips on the way. That’s actually strong use case for many of our drivers. They are happy about the feature, which is built into the app; it has a certain deviation but takes ultimately back home.


I am taking Sri Lanka as an example for other markets as well to point out how well it’s working and adopted. 


How do you view competition in Sri Lanka’s ride-sharing market and what’s your current market share in Sri Lanka?


Freese: I think competition is something that we welcome as our larger goal is taking on private car ownership and that’s a big shift. Because the car remains an aspiration for many people, they feel like buying a car is actually taking them to a new level in society. However, we believe that you better not buy that asset, which stands ideal most of the time and we need to do it through culture change. More competition coming and more people talking about that idea will be beneficial. 


I don’t look at our competition as a battle for a greater market share but more as somebody who is following the same mission. Ultimately, my goal is more around, do I offer a ride at an affordable price that’s always there for you, so you can rely on it and keep your car at home and probably don’t even buy a car?


Our main metric is to get into two to three minutes of arrival time from the current six to seven minutes. That doesn’t sound like a high number but it changes your behaviour knowing that a car will be there for you in just two minutes. Then, you don’t have to plan, can just open up the app and press a button and your ride will be there when you just walk downstairs. 


These are areas I want to look at, such as reliability and affordability, not so much on the competition and market share, which is liquid and fluid conversation.


How is Uber faring with the home-grown competition in emerging markets such as India?


Kannan: The opportunity is so large; we are all trying to solve the same issue. We are trying to solve the big ocean of urban mobility. Competition is not four cornered. The bigger thing is how we effectively, efficiently and sustainably move people and goods from point A to B in a city.  


We were in Delhi recently launching an initiative called Uber Movement; we were looking at traffic patterns in cities. We are starting playing a role as a top partner for companies based on our movement of our vehicles, how to come out for joint solutions.


Urban mobility is an important issue for many of the cities in emerging markets and therefore, we have a really important role to play in partnering with various entities. 


What is Uber’s strategy to promote shared mobility in price-sensitive markets such as India and Sri Lanka? 


Kannan: We are trying to build long-term and sustainable engagements with multiple stakeholders with both external and internal. 


We will build partnerships with credible local entities on the demand, on the supply side and policy wise. The goal is to look at how we can work closely and constructively with our local partners and stakeholders to actually help solve the challenges in sustainable mobility, most importantly, how we can help to create mobility entrepreneurs.


The broader goal is to how to partner with various similar-minded partners to create thousands of mobility micro entrepreneurs in the country.


I think in terms of Uber’s perspective of South Asian markets, our leadership was very clear, we are not only committed but we are doubling our commitments in these countries. We are trying to be local as much as possible in trying to co-create solutions, which are for Sri Lanka.


We would be discussing with the authorities and key external stakeholders on how to engage more, how we invest and how to commit and grow more. We ultimately want to become a thought partner for cities. 


How committed is Uber to provide unique solutions to issues in emerging markets? 


Freese: We commenced cash payment in emerging markets first and only. We realised that we need to offer more payment options in emerging markets. Uber Intercity is also an emerging market first product, which proved that we listen to the market and stakeholders. 


These are a few examples but there are lots of innovations happening in emerging markets first and then expanding to the US, EU and other markets later on.


What is the main challenge you face in the Sri Lankan market?


Freese: Challenges are very much on changing the perception of urban mobility. Ideally, we want the riders to open the Uber app as much as Facebook or WhatsApp. 

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