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Does Uber Stand a Chance in a Global Market?

Uber won't likely be pumping the brakes anytime soon.
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Uber won't likely be pumping the brakes anytime soon.

Tens of thousands of taxi drivers across Europe’s major cities snarled traffic in major thoroughfares and laid on their horns Wednesday in a protest meant to send a clear message to the app-based car service: that it is as unwanted by career cabbies there as it is in the United States.

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Uber responded to this “Ubergeddon” -- which brought traffic to standstill in London, Paris, Berlin, Madrid and Barcelona –- with characteristic braggadocio, claiming that the day of the “irresponsible” gridlock saw an 850 percent rise in Uber app downloads.

With its recent $17 billion valuation from Wall Street and a $1.2 million cash infusion from investors, Uber's steamroll continues, as do the protests. The car service app currently operates in 128 cities in 38 countries. Despite a strong foothold in North American and Europe, Uber’s real goldmine may be developing countries, were the need for reliable transportation is huge, and regulations are few.

The San Francisco-based company has brought Silicon Valley-style disruption to a major transportation industry, and lots of folks aren’t happy. The app allows users to order taxies and cars via mobile app, but complaints and lawsuits among customers and existing taxi and livery services are many. The drivers aren’t properly vetted, critics allege, the ride-sharing business model allows drivers to circumvent fees and regulations, and Uber is flooding the market with too much supply.

"We've got regulatory issues in about 128 of our cities," Justin Kintz, Uber's policy director for the Americas, recently told NPR.

While growth continues regardless, demand for a more organized transportation service in developing countries can seem obvious.

“In Hanoi, you can pay someone the equivalent of a dollar or two and jump on the back of their motorcycle and get to anywhere else in the city,” said David Berkowitz, chief Marketing officer of MRY, a corporate marketing firm.

In cities where such casual forms of transportation are common, it might be hard for Uber to get a foothold, Berkowitz told NBC News. But there is also opportunity. “As a reliable way to get people and goods from one local spot to another, having a brand behind a service can go a long way,” he said.

Adaption to the infrastructure is key, Berkowitz said. While many developing countries skipped the PC-revolution completely, largely depending on mobile phones for Internet interaction, most people don’t own smartphones, so texting takes precedence over apps.

Uber is making strides in Asia, serving cities such as Bangalore, New Delhi, Mumbai and Chennai, among others, where drivers and customers often use the service via text rather than app -- but the company doesn’t expect it will be that way for long. As Bloomberg reported in January, Uber is investing in Android-based low-end smart phones.

"We definitely want everyone to be able to use the product," Ryan Graves, Uber’s head of global operations, told Bloomberg. "The speed at which smartphone adoption is happening, it almost won't be an issue in 18 months."

“I think if they continue with their aggressive rollout, not giving critics a chance to respond to what they’re doing, they’ll do well in the short term and mid-term,” said Thilo Koslowski, vice president and analyst at Gartner.

This goes for the company’s prospects in North America, Europe and developing countries, where he expects that, in the long term, Uber will face the same problem. Just like regular cab services, Uber “just replaces one middle man for another."

Koslowski says that Uber, like Lyft and other app-based ride-sharing businesses, may face even more high-tech threats.

“Eventually, we may figure out how to use social networks and other technologies to find the ride that we need without relying on another middle man," he said.

For now? Drive on.