When it only takes only four or so years for a startup’s name to catch on, though, it seem to be a sign of something different: That this is just the beginning. That’s why, if you haven’t heard of Uber Technologies yet, you’re going to hear about it soon.
First things first: the basics. Uber is a mobile app that provides car services — like taxis, but less yellow and much more hip.
Using the app, you “order” a professional driver in a sleek black car to come pick up you — anytime, anywhere. You get an ETA when you put in the request, you get a text when the driver has arrived, and the ride is automatically charged to the rider’s on-file credit card.
No wonder twentysomethings love it.
The San Francisco-based company was started in 2009 by Travis Kalanick and Garrett Camp and, although I’ve only used it once, I’ve heard the conversation plenty of times. “Did you take the Metro last night?” one person asks. “Nah, I justed Uber-ed home,” the other replies.
And when you think about my generation — no, not the fact that we’re lazy and entitled — it makes perfect sense. Remember: Just last year, U.S. cities grew faster than the suburbs for the first time since the 1920s, with millennials at the forefront of that trend. According to a recent Urban Land City report, walkability and city life are two of the strongest preferences for Generation Y.
Not only is driving in cities — the destination for many coming-of-age adults — often a hindrance, but it’s expensive. Besides the cost of a car, gas and insurance, parking at downtown apartments can often cost cash-pressed young professionals an extra $100 or more a month. Then there’s the hassle itself of finding a spot, paying for a garage or shoving in quarters wherever you end up.
Already, younger people of this generation are less likely to drive, and less likely to have driver’s licenses in the first place compared to past generations. With that in mind, it’s easy to see why cars are getting pushed aside, and why Uber is gaining popularity rapidly. Public transportation — at least for the workweek commute — remains the bread-and-butter for the carless, but Uber has quickly and easily stepped in the fill in the holes.
And that’s not just true in the good ol’ U.S. of A. Uber debuted in Seoul today, already made its way to Taipei and over 30 other Asian cities … and is quickly making plans to continue that expansion. As Bloomberg explained, “Asian cities will be a focus for the next 12 months” since “the low cost of labor in certain areas could make using Uber’s service cheaper than owning a car.”
The company’s rapid growth and lofty expansion growth has attracted the eye of private-equity firm TPG Capital LLP and Google Ventures already, both of which are discussing an investment in Uber valued north of $3 billion. If the financing keeps rolling in and the expansion goes as planned, don’t be surprised if the popular verb-worthy mobile app takes a swipe at the public markets.
Of course, even if that happens down the road, there will be reason for caution. Facebook (FB), for example, was the last mass-appeal company to hit the markets, but its consumer popularity led to a lot of hype and little substance. In fact, it’s taken over a year … and Zuck’s social site is just now nearing its $38 offer price.
Plus, Uber faces has another notable headwind: regulations. There has already been a lot of domestic controversy over hailing cabs via smartphones, while things will likely get even stickier overseas.
Regardless, this taxi-substitute mobile app becomes a go-to mode of transportation not just across the country, but across the world, all that fine print will likely fade into the background pretty fast.
Keep an eye out — this is just the first you’re going to hear about Ubering.
As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.