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What You Can Learn from Uber's Business Model

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Uber has revolutionized travel in big cities by capitalizing on a few basic principles.

Uber erases the negative aspects of a cab ride — irregular pickups, spotty quality vehicles and erratic customer service. In its place, Uber offers more convenient and faster pickups, better quality vehicles and drivers who compete to best serve the riders.

Curt Mercadante, a Charleston, S.C.-based entrepreneur who travels to Washington DC frequently, explains how Uber won him over instantly.

A frequent business traveler like me can have his or her day ruined by time spent hunting or waiting for a taxi. Or riding in a taxi in the summer heat with a driver who refuses to turn on the air conditioning. Or a driver who is rude and drives recklessly. Or, as was the case on a recent trip, a driver who refused to pull over even has his car's transmission was stalling.

Another lesson to be learned from Uber is its flexibility. While its founders definitely had luxury in mind when they created the company, they were wise enough to create a less luxurious product, UberX, that offers more modest vehicles for budget-conscious customers, explainsEntrepreneur.Com.

You'd be hard-pressed to find a person in a major city (SF, NY, DC) who hasn't used Uber X. While Uber's founders created the company with luxury in mind, they saw an enormous opportunity offering an alternative to traditional taxi services. Despite luxury transportation being the backbone of Uber, the founder's weren't afraid to pivot and change the focus of the company.

Entrepreneur Mercadante, whose business is social media, notes another winning aspect of Uber: Customer feedback.

There are still businesses who are so terrified of customer feedback that they refuse to even put up a Facebook page. The fear of even one negative public comment puts them into paralysis. Uber, on the other hand, is a business that thrives on customer feedback. That customer feedback helps the integrity of the system, and also creates a brand loyalty among customers that results in that customer base angrily emailing the city council to keep its hands off their favorite car service.

Any way you look at it, Uber is a business that offers plenty of lessons for budding entrepreneurs.