How Uber’s trek across the US will set the course for its run in Asia

Just over three years after it launched, a startup based in San Francisco has already become one of the most controversial companies of the mobile era. Originating as an inside joke between CEO Travis Kalanick and his co-founders, Uber has now spread to 100 cities around the world, 21 of which are located in Asia Pacific. What was once thought to be a third-rail industry – loosely-regulated commercial transportation – is steadily becoming a reality. But not everyone is ready for it.

In a nutshell, Uber is a startup that connects passengers in need of a ride with a driver. A user downloads the Uber app to their smartphone, presses some buttons, and they’re immediately referred to a nearby driver with an empty seat. The ride is confirmed, and the user tracks the current location of the vehicle through GPS.

The driver arrives, and the passenger hops in. Once the trip is over, payment is conducted entirely through the user’s credit card, which is bound to the app upon registering. Users and drivers can rate each other – this means that George’s next passenger will know that his car smells like cigarettes, and Lisa’s next driver will know she left candy wrappers on the seat.

In cities where it’s launched for several years, Uber offers three tiers of services. Its flagship UberBlack lets users hitch a ride with a professional driver in a fancy black towncar, usually for 1.5 times the local price for a taxi. UberTaxi lets users hail a city taxi through the app.

Finally, UberX connects riders with ordinary Janes and Joes who are willing to open up their back seat to strangers in exchange for money. In some cities, like Singapore, these Janes and Joes are in fact commercially licensed professional vehicle drivers who have ditched their Mercedes or yellow cab for a Corolla. In other cities, like San Francisco, these Janes and Joes are soccer moms, college students, bored commuters, or anyone else looking for extra cash

While innocent on paper, all three of these tiers seriously threaten the taxi industry as most of us understand it.

What’s Uber’s grand scheme? Every provider of private on-demand transportation will “freelance with Uber.” That is to say, private drivers will work for themselves and assume responsibility for all licensing, vehicle upkeep fees, and taxes. But they’ll be willing to shoulder those burdens because Uber, in theory, will provide them with the best customer referral app on the market.

Cracking Asia

Uber is young in Asia – it first launched on the continent in Singapore in October 2012, and over the next year expanded rapidly across the continent. Since the company is so new and requires lots of outreach to educate consumers, few Asian cities have openly dealt with the regulatory challenges that it brings.

What are the factors that will determine Uber’s success in Asia?

1. Current market for on-demand transportation

Uber’s success in Asian countries will partially be determined by the current market for taxis.

In most major US cities, the taxi experience is nothing short of a nightmare. Passengers face expensive fares that are priced inconsistently. Cab drivers are rude. Cabs are dirty. Hailing one from the street can be a pain, especially during rush hour. City authorities, meanwhile, have long neglected to upkeep subways and buses, making public transportation options even less appealing than taxis from a quality-of-service perspective.

How have different cities reacted to Uber’s arrival?

Looking forward