Surviving the Uber apocalypse
How do you position a company between a dying business model and a relentless market eater?
How do taxi companies survive Uber’s budget rates and convenience, while competing over the non ride-sharing public? Not to mention, a customer pool shrinking by the day, as more and more riders download the Uber app?
I recently met with Mike, the small business owner of Lime Car Service. Mike has discovered an opportunity to navigate this disruption. We’re not talking about beating Uber and Lyft — that’s impossible. But so is playing the numbers game with the local cab companies struggling to stay in business.
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1 You don’t beat the competition by fighting the competition. You get ahead by escaping the competition.
To do this, Mike eliminated his taxi cabs and launched a black car service instead. The new model is geared for corporations and private customers demanding limousine service without the bell and whistle rates. So far, four Honda Accord hybrids, a hybrid SUV and a mini van for larger groups is keeping him in the game.
These customers want reliable service to the airports, train stations and satellite meetings. They also want professional drivers and a personal relationship with the company they do business with. Good luck calling Uber’s hot line to chat with a real-live person.
2 Escape the competition by creating a niche service, your own category and marketplace.
By shifting to a car service that is green, hence the name, Lime, Mike has separated himself from the pack of local cab companies. By offering luxury service at affordable rates with eco-friendly vehicles, Lime has forced the local taxi companies to take notice and compete with them.
Since rebranding itself, Lime has enjoyed a healthy spike in airport, out-of-town and long-distance rides. On this playing field, Mike isn’t concerned with services like UberXL and UberBlack. Of course they are present and competitive, just not on the scale of UberX and Lyft in the more crowded and price-pointed taxi cab market.
3Focus on what you do best and stop being all things to all people. Bigger doesn’t mean better — less is often more.
Exceptional customer service gives Lime the impression it’s a larger firm than it is. Clients are amazed when they discover how much coverage Lime provides with such a tiny fleet.
Most corporations work with a calendar in place. Except for the “emergency meeting” or “last minute flight,” they don’t call for transportation on the spot. Many of Lime’s reservations are scheduled days and weeks in advance — a terrific advantage while operating a smaller fleet.
4 The temptation to double the fleet and expand business has started to show up, and Lime is treading slowly.
Mike is working with investors to buy out the Honda Accords and replace them with a fleet of Teslas. He’d like to purchase four to six Tesla 3s if the plan comes to fruition. An exciting opportunity to expand visibility and market niche, while hoping to add more corporate accounts.
Mike also envisions Lime to be more of a Monday through Friday car service. At that point, he plans to rotate his drivers on weekend call for reservations and last-minute requests from Lime’s regular customers.
5 No business is impervious to change and uncertainty. All industries face evolution and disruption.
That future with self-driving cars may indeed arrive sooner than later. Until then, Mike and his staff need to earn a living, strive for a sense of accomplishment, while learning along the way.
Despite the progressive changes in the transportation sector, Mike believes there’s a window to prosper and prepare Lime Car Service for the next seismic shifts.
I’ll be keeping my eye on this one, and plan to give a future update on Lime, as well as other developments in this rapidly changing industry.