Please Don’t Build Another Uber!
If you’re a programmer, this scenario should be familiar: a relative, friend, or worse, a client, wants to create one of those big apps like Uber, but with their own ideas, which they are sure will be a success.
I’ve seen this scenario so many times that I initially, and perhaps biasedly, thought it was something unique to Latin America. The localization of business models in this part of the world is very common; many entrepreneurs focus solely on adapting successful products from other regions.
But it wasn’t just here…
It was a surprise for me to realize that this was a global phenomenon. Many small and medium-sized entrepreneurs around the world think that creating one of these apps is easy. Well… isn’t it just about building the app and that’s it?
Over time, other major companies with the same business model emerged. Although the market is large, I believed this would help people understand that the market was somehow already saturated. But interestingly, I encountered people who saw this as fuel for their dreams; if more people were entering this business, it must be easy, right?
Let’s Explain
I’ll try to explain why creating a new Uber is a bad idea, although this could be extrapolated to any other trendy app you think launching your version is a great idea. I clarify that this is my own view and that my intention is not to be too technical but not too general either.
The App
As a programmer, I could explain the steps to create an app like Uber: the necessary architecture, the required services, the best programming language, and I might even be able to give you an estimated development time. But that’s not the point I want to get to. In general terms, creating a “clone” app of these big applications is not so complicated; even a programmer working alone, without much advanced knowledge, could develop it.
What’s the complication then?
While to an inexperienced eye the result may look good, an app that looks just like Uber on the surface, the truth is that the most complex part of these applications is the “Backend”, in simple terms, what happens behind the scenes.
These big apps invest significant efforts in their internal algorithms, in why and how a passenger is assigned to a driver, differentiated pricing, commission percentages, how complaints are handled, and more; then, they also focus on optimizing these processes to differ by seconds or even milliseconds.
All of this requires a large team working continuously because in the world of programming there will always be errors, so if you plan to create an app and then let it run on its own, it’s impossible.
”Tech products are not houses, they are more like gardens that need to be constantly watered.”
Now, if you’re an entrepreneur or know about it, you understand that when you start a project, your product doesn’t need to be so complex, so let’s move on to the next point.
Everything That’s Not the App
We’ve explored the complications of creating an app of these characteristics, but you might think that to start, it’s not necessary to have such a robust product. Uber started with an app that had many errors, although today, due to all the competition, the minimum technical requirements are much higher; but let’s ignore this for a moment.
Let’s assume you already have the product, you hired a developer or a development team and they delivered the product to you. It works well and you have already done some tests in your locality.
Why would passengers choose you over Uber?
You are a copy with one or two additions that work well, but certainly not as well as Uber. Why would you be the consumer’s preferred choice?
Competing on price is like going to battle doomed; I’m not saying this because Uber could lower its prices even more (which it can, but you would have to pose a threat to them), but because to grow, you’ll need to adjust your prices to maximize profits and when that happens, why would they choose you over Uber?
Suppose you are in a remote locality that Uber has not yet reached. In such contexts, your application might be successful, but you’ll live with the fear that at some point Uber might start operations in your locality, or you are just paving the way, educating your locality for Uber to reap all the benefits.
In terms of marketing, it’s almost impossible to beat or compete with Uber, to sell yourself as safer, more reliable, or any nationalistic proposition you can think of. The amount you’re going to invest is minimal compared to Uber, no matter what number you give me, it’s minimal, unless you have unlimited funds.
13 Years Losing Money
Uber was founded in 2009, and the first time it reported profits was in 2023. Can you imagine so many years burning through cash? This is only possible thanks to large investors who trust Uber. The major competitors that emerged after Uber are following the same path, recognizing that several have already failed because they couldn’t demonstrate an upward trend in key metrics such as customers, drivers, expansion, profits, etc.
You must have heard some garage entrepreneur stories, those stories that give us the illusion that you can start with little and generate a lot. Most of these stories are only half told or only the inspiring part is told; most had a relatively large cushion to start these great empires. Note that I’m not speaking in absolutes, there can always be an exception, but these are just that, rare cases that in the end, statistically, are like winning a big lottery.
Entrepreneurship
I want to leave this last part to explain that I’m not trying to discourage you from starting a business, but rather to give you a reality check about these bedroom dreams. Just because you’ve detected that Uber or another big app lacks something doesn’t mean you can do it.
Fortunately, there are still underexplored market niches (those that have been explored already have very high entry barriers), but it is possible to start there. By starting and selling small businesses, you can create a medium one. Doing the same with these, you might create the possibility of building a large enterprise. Obviously, this is a long and extremely complicated path, but possible.
