7 Things to Learn from ‘Uber Like App’ Startups That Failed (Caution!)

7 Things to Learn from ‘Uber Like App’ Startups That Failed (Caution!)

In the age of technological expansion, we, human beings, have heavily increased our dependency on on-demand deliverable services. We are using mobile phones and the internet to order items to meet our daily needs. For example, we order food when we are hungry. Or, a plumber who arrives at your doorstep after you ask for them at an application. An Uber for X startup focuses on selling its product/services through an online on-demand platform. If customers want something, they ask for it online, and the startup takes up the responsibility to supply the particular demand. Seeing such a trend in the market, every entrepreneur seems to be interested in building an Uber-like app. But why Uber for X Model?

Why is the Uber for X Model Useful for Your Startup?

App development is one of the first steps that a startup should adopt to grasp the market. It will exponentially enhance your capacity to target a larger pool of audience. With a larger market, you will have a scope for a greater return on your investments. Thus, any startup can witness a plethora of opportunities when it adopts to build an Uber-like app.

In the US alone, 90 million people i.e. 30% population have used on-demand services like Uber for X.

Source: YourStory

BEWARE! To build Uber-like apps, the startups must be extra-careful to assess all the plus and minus of the emerging model. Below are the seven most important domains that a startup must avoid to dodge the failure of their Uber for X startup. We have further also provided advice that will help you understand what should be adopted while building an Uber-like app.

Let’s begin the count.

1. Create Value for Your Customers Other than Just Promotional Offers

Startups tend to provide hefty discounts on the very first service or product. Customers use this first promotional offer and then discontinue using it from the next time onwards. A company named Homejoy was heavily investing in initial promos. The company, however, struggled to gain new customers. Only 15-20% of the total customers booked a second time.

Advice: Indeed, it is a very good practice to provide a promotional offer when you launch uber for X startup. However, in addition to this, you must never compromise on social media and paid marketing, and various other channels to expand your business’s domain. A right mix of strategies infused with an attractive promotional offer will promise you a steady inflow of customers even after the initial offer.

2. Invest in Building a Stable Customer Base Rather than Expansion

With an appropriate amount of funding, startups are expected to wish for a spontaneous expansion. They believe that the larger the expansion, the larger is the profit. Homejoy, with an investment of 38 million USD, opened 30 different outlets in just six months. The result is indeed expected, that is the failure of Homejoy as a startup.

Advice: Expansion is good. However, a premature scaling and immature estimation of customer acquisition might create havoc for your budding business. Thus, startups should invest their money and time in building a stable customer base and let them believe that your products are valuable for them.

3. Adopt an Employee Model in the Start Than a Contract Basis Model

Sometimes, startups tend to assign individuals without proper training. They lack the professional qualification to render proper services to your customers. For example, you have a startup that assigns cleaners. Your cleaners might have the experience, but they may not be able to provide a professional touch to their work. A new-york based company named MyClean was not successful in its initial phase because it was using a contract basis model.

Advice: Instead of hiring on a contract basis, a startup should adopt an employee model to retain more individuals. Further, they can be trained to enhance their skills. This step will ascertain that you render a uniform and professional service to your customers. You can then move to contract when other nuts and bolts of the business have been figured out.

4. Focus on One Particular Service at the Beginning Rather Than Multiple

An Uber for X startup might be lured to serve a variety of possible services to the customers. For example, a startup might provide services for plumbing, cleaning, painting, logistics, laundry, etc. However, for this, the company has to hire more errand runners to supply according to the demands of the customers. Managing a huge team of errand runners might get over-expensive. And sometimes, lack of errand runners for a particular service might create a bad impression.

Advice: Startups must first focus on one job before expanding the domain to other areas. For example, Amazon started its services as an online book store. Now, it is one of the top companies in the globe.

5. Correct Estimation of the Customer Acquisition Cost

The customer acquisition cost might sometimes be higher than the expected values. For example, an online store selling apparel might experience customers who repeatedly ask for a return and refund. An eyeglasses company named Rivet and Sway was witnessing a lot of customers who were demanding several trials before purchasing. That is why the company focused to provide the customers with efficient and technology-driven showrooms.

Advice: Customer acquisition cost plays a major role in launching an Uber-like app. Thus, being into a competitive business, the startups must analyze and estimate the customer acquisition cost to decide the business’s structure and model.

6. Be Unique in At-Least One Vertical of the Market

Sometimes, competitors are funded heavily. With a larger pool of liquidities, these powerful competitors might cut the market for a budding startup if your startup does not provide something unique.

Advice: Uber like app development is indeed an impactful decision. But that might not be sufficient to compete with powerful competitors in the market. To create an impactful competition, startups must focus on launching Uber for X models with a differentiating value that should excel in at least one vertical of the market.

7. Investment in a Proper Product Development Process is Important

Immature product development might be a significant reason for a startup’s failure. Without a proper prototype for the product, the startups might undergo a major hit because the product didn’t work out in the market as planned. Kellogg’s, a US-based food manufacturing company had an excellent product. However, their initial venture was not successful in India because they did not analyze the Indian market before launching their product.

Advice: To create an impression, the startups should focus on the product development process and estimate a way to provide an impactful value for the customers. The customers should be able to understand that you are building products that they require. This is a golden rule that provokes the startups to manufacture or render services that the users demand.


Uber-like app development can generate a huge influx of customers to your new startup. But, to create a long-lasting impression, you must be cautious enough to understand the market. The better you strategize and commit fewer mistakes, the more you come closer to achieving success in the market. Get In Touch with Code Brew to understand more about easy plug and play products solutions for Uber for X startups. Because we are not only Building apps, we are Brewing success for you.

Want to know How Uber Works? Here’s an overview of Uber’s Business & Revenue Model: 

February 4, 2021



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