Uber Expansion: Challenges of Launching a US-based App Business in Canada
In early March, Techvibes reported that U.S.-based startup Uber was expanding into Canada and worldwide. But they’re not the only American startup to do so.
The Globe and Mail recently covered a story about a number of U.S. startups, like Airbnb and Fab.com that are also expanding internationally to combat competition in other markets.
I spoke with Andrew MacDonald, who was recently appointed as General Manager at Uber Canada (running their Toronto business) to find out how the startup, co-founded by Canadian Garrett Camp (who is based in California), is overcoming unique market challenges in Canada as it competes with local businesses like Winston.
ANDREA: Andrew, can you tell us a bit about the Uber experience?
ANDREW: Uber is an on-demand private driver service that you order via your smartphone. It’s easy to get started. Just download the free Uber app (or order via text message), set your pick-up location and within minutes a professional driver will pick you up and drop you off at your destination.
The app uses GPS to identify your physical location so that we can show you where our cars are in proximity to where you are standing. Once you request a pick-up, we send you a message to let you know the name of your driver and the ETA of when your car will arrive. You never have to pull out your wallet because your payment is processed online—including the tip.
Uber is available via both the App Store and Android Market. All other smartphone users can create a profile online through our website, Uber.com.
ANDREA: What unique challenges or opportunities is Uber facing in the Canadian market?
ANDREW: We know that the transportation system in major Canadian cities like Toronto is under a lot of strain. When the subway or GO Train is down, we can help alleviate the pain and offer an alternative to taxis. The Toronto market is already an expensive city in which to take a taxi. The meter usually starts at $4.50. So, we think that our minimum fare charge of $15.00 (starting the meter at $8.00) is a much lower premium over regular taxis than say in cities like New York or Chicago where the meters start much lower (around $2.25 to $2.50).
We are facing the challenge of building a brand with little awareness in Canada. We don’t have the advantage of existing U.S. national news stories that other new Uber locations have when they launch in U.S. cities. Because the Uber presence in New York is already huge, it’s a lot easier to set-up shop in, say, Boston and take advantage of an already existing market.
ANDREA: How are you differentiating from the local competition like Winston?
ANDREW: We're focused on our growing our customer base, offering exceptional service and a really, really kick-ass product. Given this 100% customer-centric outlook, we haven't spent a ton of time worrying about what others in the market are doing.
That's not to say we don't study who they are and what they are trying to do. We do. But we don't let it consume us. We understand our market better than anyone else and believe that both from a technological and customer experience point of view we are tough to beat. We haven't noticed any impact on our growth trajectory from local competitors in the Canadian market.
ANDREA: What do you like best about starting up Uber in Canada?
ANDREW: We love that we get to start fresh in Toronto. Everyone on our team here is an entrepreneur and we enjoy building the business from scratch. The feedback that we’ve received from our customers so far has been very positive and we’re seeing it go viral. If five people use our business in a day, they tell five other people and it grows from there. We’re partnering with a lot of local charity, corporate and fundraising events to get the word out. That’s been working really well for us and we’re excited to be doing what we do and being a part of the transportation fabric of Toronto.
ANDREA: Where is Uber headed next?
ANDREW: Europe will be a big focus for us next—opening in London soon. I’ve never worked with such an ambitious and collaborative group of people. We’re always working together to push for the next feature and to continue to expand and improve our service.
