Many years ago on rainy night in East Village I decided to flag an empty cab that was passing by. As soon as the driver spotted me, he quickly switched off the “available” light. He stopped a few meters down the road and picked up a group of four white guys who were quite drunk and rowdy.
As much as I was perplexed by the discrimination and could have taken down his license plate etc., I was drenched and tired and just wanted to go home. That’s was when I came up with Uber. I had engaged a driver on a previous trip on why there was so much discrimination and he told me that some drivers had encountered infrequent, but truly memorable negative experiences with people of color, especially those traveling to the outer boroughs.
I’ve read many theses from savvy investors on why Uber/Lyft are such special businesses. Some of them include route/logistical efficiency, flexible work schedules etc. Frankly, I don’t fully understand some of the more complex ones. Truthfully, that day in the rain, I came up with the idea because I had a few, very real, basic, problems I wanted fixed.
- Information asymmetry – If the cab driver had known that I was paying in cash (no credit card fees) and I was going to 34th and 3rd (low traffic and no outer borough), he would have stopped. Unfortunately there was no way of communicating this via telepathy when our eyes locked
- Elimination of friction – If there was a way for me to prepay and provide my trip detail so that I can just walk in and out of the car without unnecessary interaction, the probability of misunderstanding resulting from difficult situations (lost wallets, cash only cabs, language barriers etc.) would fall dramatically
- Tracking and feedback – If we both agreed to the trip being tracked and to providing our personal identification information, then the driver’s willingness to take risk would increase. Additionally, both parties’ fear of a negative review would encourage civil engagement
I suspect that Uber’s founding team was solving for the problem of sprawl in SF – I once had to walk for half an hour in Dogpatch to arrive to an area with any traffic. I don’t know that any of these founders would necessarily relate with my pain point.
As an investor, this experience taught me to develop what I will call “experience empathy”. When evaluating a new opportunity, I work to identify and really understand the multiple distinct profiles of customers/users whose experiences/problems (especially those I don’t relate to) would be solved in a transformative manner by a company’s products or services. It demands constant humility to suppress the “if it’s not relevant to me then it’s not so great” proclivity.
In closing, I would argue that, through addressing information asymmetry, Uber is making society much better by contributing massively to the data, education and human contact, critical to reducing the chronic dependence on stereotypes when making business decisions.