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Getting from A to B

Steve Coomber reports on how Gang Luo is mapping out Uber Shenzhen's route to success.

By Steve Coomber 30 September 2015

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Gang Luo has overcome a number of challenges in his professional life. Now, though, he faces perhaps his toughest challenge yet as general manager of Uber Shenzhen, helping to steer the mobile app based transportation business to success.


Luo studied electrical engineering at university in Tianjin before joining the ZTE Corporation at the company's headquarters in Shenzhen. ZTE was one of the earliest Chinese companies to make a significant move into international markets.  Today it is a truly international business and one of the top ten smartphone makers in the world. But in 2002, it was just beginning to expand its business beyond Chinese shores, and Luo was part of that push.  Over the next four years Luo worked as sales and marketing manager for ZTE in Iran, and then was promoted to country manager of Syria and Lebanon.


But even though Luo was gaining experience and seniority working in the Middle East, he was also aware that there were areas of his professional life that he could improve. 


"I was one of the pioneers out of China and into the international markets. It was new to Chinese companies at the time," he says. "I was doing OK, I'd been promoted to the role of country manager of Syria, but I still had a lot of unanswered questions about doing business internationally. I would ask people around me, my boss, my colleagues, but they didn't have the answers I needed. As an engineer, I had learnt about business through work not in the classroom. I wanted to change that."


Luo's mission to improve his business knowledge took him to London Business School and the full-time MBA. Afterwards he remained in London. First at British Telecom, where he joined  the company's MBA leadership programme in 2008, became part of the talent pool of top performing managers, and was appointed head of customer experience. Then, in 2012, he left to become head of sales and analytics at start-up Rangespan.


It wasn't long, though, before Luo was looking for another challenge, as Rangespan was acquired by Google in 2014. It was then that his thoughts turned to Uber.


Disruptive innovators


Uber is the on-demand transportation business co-founded by Garrett Camp and Travis Kalanick, which launched in San Francisco in 2010. Essentially, Uber is a smartphone app that connects passenger and driver. The driver usually drives their own vehicle, they may or may not be licensed to operate as a professional taxi or chauffeur. UberBlack is an upmarket, smarter car version, UberX is the standard service, while People's Uber is only available in China and is a driver's costs only, social enterprise type endeavour.


The company picked up high profile investors early on and quickly expanded from operating in one city to over 300, in some 60 countries. It also extended its services in a number of areas, notably to the on-demand delivery of various goods to customers. 


"I could have stayed in the UK, or decide to explore other opportunities," says Luo. "I knew that the internet was growing extremely quickly in China, and that Uber had just entered the Chinese market – it started its operations there in early 2014. I took many Uber rides in London and was a very happy customer, so I knew this company had huge potential in China.  I had some contacts in Uber China and managed to get an interview. They liked me and asked if I'd join them."


Luo arrived in China in July 2014 as general manager of Uber Shenzhen, which launched at the beginning of that year, and set about fine tuning the business.  "One of the first and biggest challenges was brand awareness," he says. "Uber was already quite famous in the US and London, but it is a relative newcomer in China. No one really knew us in that market."


Part of Luo's brand awareness building in Shenzhen involved the second roll-out of Uber Lion Dance on demand in. Uber users could have a troupe of Lion Dancers – a celebration on Chinese New Year – delivered to their doorstep to perform. Another marketing tactic was the Party Bus. "If you want to go to a party usually you will take public transportation," says Luo. "But pick up Uber, click on the party bus icon, and the party bus will come to you. You can start the party early."


The product also needed improving, says Luo. Take payment methods. Uber use cashless payment, but many of the cashless payments popular elsewhere are not the main forms used in China. Alipay is the dominant online payment platform, rather than PayPal. China Union Pay has the biggest share of the credit card market. Neither was integrated with Uber Shenzhen's payment system at the time. 
Another issue was navigation. Shenzhen is a city of some 15 million people, with immigrants making up a significant proportion of its population. The success of Uber Shenzhen partly depends on efficacy of the mapping system it uses as part of the in-vehicle GPS, as the drivers didn't necessarily have the local knowledge required to find their way around the city. 


"We were using Google maps but it didn't work that well in our area. We wanted to work with a local map provider, so I helped to negotiate a strategic partnership with Baidu [the Chinese web services firm] for Uber China. Now, when you come to China, the map that you use with Uber seamlessly switches to Baidu maps."


A tougher task for Luo is dealing with local regulators. It is not uncommon for firms that shake up the status quo in conventional markets to encounter resistance. In several countries around the world, Uber's operations have been challenged by regulators and other government authorities.  China is one of those countries. The Uber offices in both Guangzhou and Chengdu received visits from government officials in mid-2015.


Luo adopts a pragmatic approach, stressing the importance of good communications.  "It's not a new challenge. We need to talk with the local regulators to make them aware of what we are doing and the benefits we bring to the city," he says. "Traffic jams are at the top of the local government agenda - a lot of people complain about the traffic. Air pollution is also a problem. We have had discussions with the local government to show them how we can help them deal with both issues."


Analysis by Uber demonstrates how Uber can improve traffic efficiency. It usually takes at least 18 cars to transport 27 people to different locations in Shenzhen, using Uber's car pooling technology only ten cars are required.  Fewer cars means fewer traffic jams and less air pollution. Shenzhen and everyone living there benefits. Discussions with government and the local authorities is ongoing, with the intention of understanding their concerns, and keeping them informed, says Luo.


Through the gears


Under Luo's management Uber Shenzhen has made good progress. This is partly due to the autonomy he has, allowing him to take decisions on the ground that suit the local market. "Uber is a very decentralised organisation. Each city team has a lot of authority to operate locally. It is like running a start-up. The general manager is like the CEO, I take care of everything from local operations, to dealing with the local media and the regulators. I get to see whether my decisions are right or wrong, and using the data we have I can react quickly and change things if needed. This is so different from many international companies in China," he says. "And there is no head of China either, so as well as managing the five full time employees and over ten interns we have here, I also manage some projects across China."


As a private company only a limited amount of performance data is available from Uber. However, as Luo points out, one of the most important factors for customer experience is how long it takes a car to come after ordering it. When Luo joined the estimated time of arrival (ETA) was about 15 to 20 minutes. Now waiting times are down to about two to three minutes, maybe five to ten minutes in the rush hour. In terms of brand awareness the service is scoring above competitors on the Baidu web search index.


There is more to come too, says Luo, who has his foot firmly on Uber Shenzhen's accelerator. "Together with our engineering team, our product team and local partners, we have worked hard to get to where we are today, but there are still areas where we can get better. We can improve our ETA, get more cars and more riders, serve some currently underserved areas, and make Uber the people's first choice whenever they want to go out, for whatever reason.


"And don't forget that we are only operating in nine cities in China at the moment, not even all the major cities. We want to be in every city with a sizeable population.  For example, in China there are over 200 cities with one million or more people. We have only just started; there is still a long way to go."

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