Uber (company): In early days of their launch, how did Uber manage to market their service to both drivers/partners and users/riders?

To be part of Uber there are no monthly membership fees or costs upfront from either users. (Businesses/End Users). All payments for rides are done electronically via the app and money is received by Uber and then they pay the driver minus a commission for being part of the service. Any app that wants to charge a business or a user a monthly fee or other start up cost to be part of an untested app is doomed to fail. You have to figure out how to be paid when a business chooses to upgrade its profile for added benefits, receive a commission fee for promoting specials etc., or offer advertising options. Bottom line is you will need to have investor money to operate on as you build both sides: businesses and users. If it is free, usable, and there is benefits to using it then both sides will grow. You will then have the "proof" and the upgraded profiles,advertising, and/or commissions for promotions (that you have been marketing to the business owners the entire time) will be worth it and that is when the income will come. Initially you will have businesses that will jump right in and see the potential and will be willing to pay for upgrades etc., but you will still need money to keep afloat while you convince others. Ultimately you better have an app that is extremely user friendly and provides the user with valuable information. There is a reason that Yelp, Facebook, etc have users and businesses are willing to "pay". They see results.

From my understanding whenever Uber starts out in a new city or when they were just starting out as a company,  they went to drivers or Limo companies (before UberX it was only Black cars which is all Commercial TCP cars, usually limo Lincoln town cars) and pitched the idea for that company  and asked them to try out the Uber Platform. Instead of paying based on how many rides you did and total fares, they would pay the drivers an hourly rate. I believe it was something around $35 an hour but I would assume it would differ depending on a number of different factors. This way they incentivize the driver to try out the service and if they didn't get very many rides then they would still get paid. They possibly might have even paid them what they actually earned if it was more than $35 an hour, which is the way they currently do it whenever they run a promotion for the drivers. Then as more people find out about and start using the service. Uber then does their best to get enough drivers to handle the ride request by customers or otherwise known as managing supply and demand. Then after it's well established they switch to the current payment structure of only getting paid for the rides you complete and Uber takes their cut of the fare. Currently in the Bay Area the split is 80/20, with the driver getting 80%, and Uber taking 20%. Now that they are bigger and much better known, it's a lot easier for them to expand to new cities but I believe they still use a similar method in new rollout cities. I don't work for Uber only drive for Uber so I am not privy to the rollout strategy Uber currently Utilizes, just guessing they are still doing the same thing.

Any time a business can create demand and get customers to pay, they can almost always figure out fulfillment. You're right, it is a bit more tricky because uber is a basically a marketplace for rides... they've got to recruit drivers to deliver the service. But that problem isn't unusual.  http://Upwork.com is a marketplace for freelancers, same issue.  (couple more examples to follow) If you're offering work, you're probably going to get service providers chomping at the bit, even if you can't pay too well.  Not sure I'm right? http://Fivver.com - Jobs for five bucks.  And fivver takes $1 dollar comission & passes on the paypal fee (2,9%).  So the freelancer makes $3.58 per gig. Yep that leads to a lot of foreign freelancers where that's an ok wage. But there's no shortage of gig providers who are US based. http://99designs.com  - crowdsourced logos and designs.  Freelancers design something specific to a customer's request often competing against 10+ other designers.  The client chooses the favorite and only ONE freelancer gets paid.  Yet somehow they have plenty of designers. Controlling the quality of your independent contractors is probably the bigger challenge.  Can you pay enough to attract the right drivers?  How do you make sure that customer has a good, consistent experience, so that the come back?

According to Uber founder Travis Kalanick, they http://blog.close.io/from-cold-call-to-17-billion-startup-how-uber-got-started-with-sales-calls?utm_campaign=codrake&utm_medium=quora&utm_source=quora. Here's what Travis says about Uber's initial sales and marketing attempts:"I went to Google, typed in San Francisco chauffeur or San Francisco limousine, I just filled out an excel sheet and I just started dialing for dollars, right? First ten guys I called, three of them hung up before I got a few words out, a few of them would listen for like 45 seconds and then hung up, and three of them said 'I'm interested, let's meet.'. And if you're cold calling and three out of ten say 'let's meet', you've got something."Want to be like Uber? Check out these http://blog.close.io/b2b-cold-calling-tips?utm_campaign=codrake&utm_medium=quora&utm_source=quora.Slightly related, here's http://blog.close.io/purpose-driven-motivation?utm_campaign=codrake&utm_medium=quora&utm_source=quora.Full disclosure: I work as a freelance writer for the inside sales CRM http://close.io/?utm_campaign=codrake&utm_medium=quora&utm_source=quora. I was not asked to answer this question, and my affiliation does not affect the quality or integrity of my answers.

What you are asking is a product launch strategy for a platform product. A platform product is different from a traditional product where a company is selling a product produced by them. Users on one side of a platform product find it useful only if other side also exists.Let us try to understand platform products in the light of Uber.For a platform product you first need to identify your platform players. In Uber case we have mainly two-sided market with riders on one side and drivers on others.Typically a platform product will create larger value for both sides of the platform (increase economic pie) compared to if the two sided transacted separately. e.g. Uber creates more value for the entire economic pie of car sharing as compared to the cab services.Next we should identify the network benefits of a platform. In Uber case we have three type of benefits, same sided, direct and indirect benefits. Some of them are listed below. Now lets come back to your problem which is the basic chicken and egg problem of the platform launch.There are standard ways to approach this problem.1- Sequential/two-step: If your product allows to capture one side first (because it has direct network effects) you can first capture this side. e.g. Google search. Since there is a direct benefit of google search, google did not need to go out for advertisers for long.2- Bring in marquee users on either side. e.g. for an event management side such as Eventbrite, if they can get a major event hosted on their website (e.g. tickets for Katy Perry’s concert), they can get thousands of end users on other side of platform on board.3- Zig-zag simultaneous: If your product requires that you need to have both sides present from the day of launch, you need to use this strategy. The idea is to incrementally get each side and slowly achieve the critical mass.In Uber case, the zig zag strategy was used. Uber started in San Francisco (and continues to launch city by city) with small number of drivers. The riders were incentivized to use the product (initially they incentivized drivers as well). The key about subsidy in such platform is that The side that is more price sensitive and can provide network growth to the other side gets subsidized. Thus riders are heavily subsidized in Uber’s case and are continued till today.There are many other choices to make to solve this problem, e.g. monetization and subsidy etc. What strategy to use will depend on your product.Even I am working on one of my idea and our approach is zig zag. We are first targeting suppliers, which already have a customer (buyer) base. Since these suppliers already do business outside our platform, by getting them on board, we get their buyers automatically onboard. As suppliers will grow buyers will grow as well on the platform. Since platform is open (both supply and demand side), buyers will be exposed across suppliers (and vice versa) and can initiate discovery (or market in case of suppliers) and thus kick in the indirect network effect!You can read “Platform, markets, and innovation” by Annabelle Gawer to get more information on platform goods and network effectshttps://medium.com/ondemand/how-uber-solved-its-chicken-and-egg-problem-and-you-can-too-fab1be824984#.da5r7mvhl