“If you want to move, you might as well take a bike. You want Uber because you want quality, efficiency and reliability. It’s not just moving around, but having a great experience doing it,” remarked Rodrigo Arevalo, General Manager at Uber. The figure at the helm of Uber’s Mexican operations, we reached out to him to find out exactly what the on-demand private car service is up to in Mexico City.
Uber launched in Mexico City, its first Latin American locale, in the middle of this year. And unlike other startups that make each landing with bells and whistles, Uber was pretty quiet about its arrival. Why go the undercover route? Arevalo explained:
We’re actually pretty quiet all the time, because you do want to manage expectations. If you launch and you don’t have enough supply, you’re going to crash and burn. People love Uber, and they expect the very best out of us.
That commitment to quality and being the very best, in fact, is a major factor in what attracted Arevalo to the project in the first place. A bit of a career intrapreneur, he jumped on the opportunity to lead Uber’s Mexico City team after having worked with Rocket Internet and Linio for over a year. “When I first heard about Uber, I thought that it was an amazing company – especially the product. One of the things I’m most impressed with about Uber is the focus on technology and this real laser-sharp focus on building a great product,” he explained.
Arevalo hasn’t spearheaded Uber’s Mexico efforts alone. In fact, the company has employed an interesting set of tactics in this respect, bringing on professional launcher Patrick Morselli to kick-start its operations in Latin America – partly because Arevalo was phasing out of his previous position, but largely because that is part of the Uber’s expansion strategy for the region.
“The philosophy is to launch, make it happen and start building up our team,” he remarked. “As a general manager, you don’t know everything, so you need someone to help you out, and that’s a launcher.” The knowledge shifting process is an ongoing one. “You never stop learning with Uber,” Arevalo affirmed – especially given the numerous teams operating across various locales.
But of all of the major cities in Latin America, why start with Mexico City? Arevalo’s response:
It’s the market. There’s just so much potential in Mexico City. This is the biggest market with the most vibrant ecosystem to start these kinds of businesses.
In his eyes, the Mexican market is just as lively as Brazil, the advantage being the former poses much few barriers to entry.
Growing Uber in Mexico entails achieving a careful balance of supply and demand while at the same time maintaining top-notch quality. What it doesn’t mean is simply building up the number of cars in the Uber Mexico City fleet:
It’s not about how many cars you have. It’s about having our partners, which are the drivers, make the most out of their time. What we want to do is to position the right amount of cars at the right times in the right locations. It doesn’t make a difference if you have 1,000 cars or 15 cars if you don’t position them in a smart way.
Positioning aside, the Mexican market presents its fair share of challenges. The main one, in Arevalo’s eyes, is payment. And that’s not just for Uber, it’s for online businesses everywhere. “It’s just so painful to have a decent payment gateway in Mexico, because there is no support from the banks,” he remarked.
Banks in Mexico provide very little support for e-commerce entities, so whatever goes through their payment gateways, is, essentially, their problem:
When you’re passing a credit card through a physical payment gateway, you’re backed up by the bank. But when you do it electronically, the way Uber does, like every other e-commerce company, you’re on your own. So if there’s fraud, you have to prevent that fraud yourself, because the bank is going to ask for the refund.
Smartphone volume, it turns out, hasn’t been a problem. While penetration rates in Mexico aren’t quite what they are in other, more developed markets, they’re only going up from here – and gaining momentum.
Arevalo also discussed the potential backlash from taxi companies in Mexico City that may not be thrilled with Uber’s arrival. The startup has experienced a quite hostile response from several entities in the States:
It’s pretty obvious that we’re going to get some pushback from taxi companies, because we’re disrupting the business. It’s pretty easy, pretty classy, and a pretty easy experience, and we’re tapping into technology to make our riders’ lives easier. Of course we’ll have some backlash, but so far, let’s just say that the Mexico City market has been pretty sweet.
It looks as though taxi companies and competing taxi apps may be facing an uphill battle in holding onto their market share with Uber in town. Riders are loving the experience, so much so that they are the company’s best marketers and evangelizers.
“It’s a pretty viral experience with Uber,” Arevalo explained. “You download a smartphone app, and a BMW comes to your door. You say, ‘OK, fair enough.’ But once you start getting the experience, you say, ‘Ah, OK, this is pretty cool, this makes a lot of sense. It’s like having my own car and my own private driver without paying the downtime costs of that.’ People start realizing and sharing that organically by themselves. The very riders are the ones spreading the Uber word here in Mexico City.”
The setup is also a good deal for the other side of the equation, drivers, for whom Uber represents another source of income for their downtime. “It’s a win-win situation for them. They take no risk at all in partnering with us,” he added.
Our conversation came to a close with a reflection on what’s to come for Uber in Mexico City and the company’s strategy for growth:
You’ve got to focus on the experience and the technology of the platform. Our strategy is keeping up quality and focusing on the rider. You always put your clients first. I know everyone says that, but not a lot of companies actually do that. But if you really focus on putting your rider, in this case with Uber, first, people are going to like it, keep recommending it and keep signing up, if you focus on providing a great experience and giving absolutely the best service that you can.