We could say that a sewing machine in Russia and an Uber in India are remarkably similar.
Globalization 1: Russia/Sewing Machines
At the end of the 19th century, the Singer sewing machine company looked to Russia. The home of 52 million recently emancipated serfs, Russia had many people who might want to sew.
The problem though was moving beyond the big cities. There was Siberia where Singer agents complained about the long wagon trips and the rivers. There were the nomads who had good credit but no cash.
All of this meant training local reps who could do it all. They had to learn sales and maintenance, sell thread and collect installment payments that could include cattle instead of currency. Their skills were very different from a Singer salesman in the U.S.
Globalization 2: India/Uber
In many ways Uber has a similar challenge. But rather than sewing machines, India needs cars.
Since most Indian households don’t own a car, they would welcome transportation. But most don’t have credit or debit cards. And many could not afford an app that might add costly data.
So like Singer, Uber has had to tweak its business model.
To solve the car supply problem, Uber assists with financing. Faced with inexperienced drivers, their training includes a politeness standard and a dress code (shoes not sandals and a long-sleeved shirt that matches pants). They also help drivers acclimate to apps, to smartphones, and navigating unfamiliar roads. Meanwhile on the demand side, Uber says for the first time that it will accept cash for a car ride and even send a cheaper motorbike.
An Uber ad:
Our Bottom Line: Globalization
Uber’s task is nothing new. Whatever the country, multinationals need to cater to the culture. They might have to teach multitasking to Russian sewing machine salesmen or convey the basics to one million new Indian drivers.
A Post Script: The arrival of the Bolsheviks marked the end of Singer’s Russian venture. When the Bolsheviks nationalized private enterprise, the Singer Manufacturing Company wrote off $84.3 million.
My sources and more: Used to reading about Uber’s regulatory battles in the developed world, I especially noted the difference from this WSJ article and blog. Further setting the scene, Quartz detailed Uber India’s competition. Then complementing the Uber facts, the Singer sewing machine story is from my book, Econ 101 1/2 (originally from Avon Books and Harper Collins. Now available at econlife).
