What’s next for Uber? More cities, more choice and a delivery service?

Uber keeps rolling along, introducing its metro car services into new cities around the world. Following a big $32 million funding round late last year, the company has big plans not just for international expansion, but for new potential features. Sunday I sat down with Uber CEO Travis Kalanick to learn about what the company is up to.

Worldwide expansion continues

Uber is rolling out to between 15 and 20 cities worldwide this year — that we already knew. And just last week Uber officially took the wraps off its Los Angeles service, which had soft-launched about a month before.
So which cities are next?
Uber Toronto is set to go live later this week — a fact that was actually leaked to some Uber users when an email meant for launch partners went astray and was sent to regular members. The Uber Toronto service begins this Wednesday, March 14, also about a month after the startup first began testing in that market. The next city after that will probably be Miami, according to Kalanick, but no plans have been finalized yet.

Using big data to choose cities, and to prepare for launch

In part, Uber decides which cities to launch in based on the number of people who have downloaded the app and check for cars before the company has a presence. It counts those as a vote each time it happens, Kalanick said, telling the company which cities have the most demand.
Not only that, but when people check for cars, it also tells Uber a lot about where it should pre-position vehicles before it ever actually starts operations in a city. For its New York launch, Kalanick said he first assumed that Brooklyn would be where cars would be most needed, due to the dearth of taxis that go there. But heat map analysis showed that there was a lot more demand in downtown Manhattan then elsewhere in the city.
The Los Angeles launch also provided a huge logistical issue: How do you cover a city that is 600 square miles with the promise of a five-minute car pickup? It turns out that most requests happen in certain pockets of Los Angeles — from Santa Monica and Venice to Beverly Hills and Hollywood — which form more or less a U-shaped curve around the city. Knowing where to expect activity allows Uber to focus on busy areas, while leaving most of the city uncovered most of the time.

What kind of car do you want?

One of the more interesting changes to the Uber experience could be the ability to choose what kind of car you want to be picked up in. Most Uber drivers are currently either using standard Lincoln Town Cars or Escalade-type luxury SUVs. But Uber users currently have no idea what kind of car is going to show up when they use the app. That means that sometimes you get more car than you need and sometimes not enough.
Uber is trying to figure out how it can deal with this by enabling users to select the size of car they will need, whether it be a mid-sized sedan, a Town Car or an SUV. Kalanick said he could also see a different pricing structure, based on which car a user elects to use. But the problem in doing so is two-fold: How do you segment up inventory of vehicles? And how do you maintain the simplicity of the Uber user interface?
Launching that type of feature could operationally be a challenge. After all, what happens when there aren’t enough of one type of vehicle to meet demand? For the smaller vehicles, Uber could send an SUV instead, but still charge the user at the rate they selected. But too much demand for SUVs could become an issue if that’s what users ask for.
The bigger problem could be in changing the user interface to accomodate that type of feature. Today, the Uber app is incredibly simplistic: Users need only press one button and a car comes their way. A shift away from that one-click approach could potentially lead to consumer confusion, and giving users too much choice could actually work against it.

What else is in store?

Uber’s South by Southwest on-demand BBQ promotion — in which it has pedicabs navigating through downtown Austin, delivering barbecue sandwiches — shows the potential Uber has beyond just disrupting the transportation industry. That’s something that Kalanick is thinking about when he looks to the future, for sure.
“FedEx delivers packages in a day, but Uber delivers a Town Car in five minutes,” Kalanick told me. “And once you can deliver a Town Car, you can deliver pretty much anything.”
It’s all part of what he calls building an “urban logistics fabric” — charting the way things flow throughout a city and using that data to create efficiencies. That doesn’t necessarily mean Uber is going to get into the delivery business, but it leaves a lot of interesting possibilities for the company.