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Balanced Scorecard Uber Case PDF
Balanced Scorecard Uber Case PDF
A
ccording to the latest news, Uber Generally, large-cap companies that are
had over $1b in net losses in the Q3 losing money today are being punished by
of 2019 (Feiner, 2019). The second the market. But Uber has a very different
quarter was even worse for the company: story to tell: it is pioneering a new industry
it lost $5b and had a record low revenue and working towards future goals, which
growth rate. Apart from this, Uber was sets the foundation for attractive long-term
refused to maintain the presence in its margins. Indeed, traditional companies, like
biggest market in Europe as the company Walmart, seem more attractive with their
lost the license to operate in London. Yet, better-then-expected results in net profit,
after a slight decline, Uber’s shares gained revenue and return on invested capital.
ground again, and investors are bullish But old valuation metrics aren’t always
about next year’s business prospects. applicable anymore as today’s public
market investing landscape has changed
and investors are now in favor of risk takers
and cash-burners (Baskin, 2014).
Uber Ride-Hailing Gross Bookings, Net Revenue, Net Loss/Profit (Source: Statista, 2019)
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The BSC Measurements in Four Areas (Source: Balanced Scorecard Institute, 2019)
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Source: Shutterstock
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Usage and Satisfaction Rates (Source: Bain Management Tools & Trends survey, 2017)
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Despite being criticized, BSC framework’s to going beyond traditional financial KPIs
main strength is that it can be applied in requirements and expectations of business
multiple industries and companies’ types performance (Kilgore, 2019).
and sizes. Consider Uber as an example, a
company that went from the most feared Customer and stakeholder perspective:
startup in the world to its massive IPO in From the very inception Uber took a strong
2019. Currently, the company has a market position regarding its seamless customer
cap standing at $50.279b, its price-to-sales experience which actually minimizes
ratio is 3.39, it pays no dividend and it is clients-driver interaction time. The firm’s
unprofitable (Yahoo, 2019). It has a long- customer experience KPIs include clients’
term $5.7b debt that will need to pay at satisfaction ranking, overall rating, surge
some point. But many investors still believe and non-surge rating, acceptance and
its shares are worth buying for a simple cancellation rates, fare reviews per trip,
reason: Uber’s success story attributes total 1-star and 5-star ratings; revenue
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Market share of the leading ride-hailing companies in the United States from September 2017 to
August 2019 Profit (Source: Statista, 2019)
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Implementing BSC measures helps the Undoubtedly, ridesharing and the online
firm define and refine vision, strategy and food delivery industries have robust growth
objectives. But when it comes down to opportunities. With its plummeting revenue,
aligning strategic objectives from top to safety issues and bold initiatives, Uber has
bottom, it is not easy for some companies a distinct profile of company suitable for
to ensure that all workers contribute to risk-seeking investors. For those who are
the established goals and values. Uber, for dissatisfied with the amount of money
example, has a sordid history around sexual Uber is losing, there are other growth
harassment issues with both corporate stocks to consider, such as Home Depot,
employees and its drivers (O’Brien, 2019). Colgate, Costco, BestBuy or Walmart with
While it successfully resolved the issue historical EBITDA growth stability and
with the office stuff, the company can do increasing sales (Kolakowski, M.). But
little with its drivers who are not employees keep in mind that financial measures tell
and are classified as independent workers. the story of past events, an adequate story
Uber’s business model is generally being for industrial age companies for which
criticized worldwide for undermining investments in long-term capabilities and
working conditions, clogging up city streets, customer relationships were not critical for
destroying the traditional taxi industry, success. These financial measures might
minimizing the tax it pays, side-stepping be inadequate, however, for guiding and
national regulations and fostering a culture evaluating the journey that information
of toxic masculinity. Consequently, Uber has age companies must make to create future
been banned in cities including London, value through investment in customers,
Frankfurt, Barcelona and Budapest. suppliers, employees, processes,
After losing its London operating license, technology, and innovation.
Uber’s stock tanked 6% (Khan, 2019). As a
possible solution, Uber might try to tighten
up its driver registration procedures and
track them more closely.
Source: Uber.com
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REFERENCES
Baskin, J.S. 2014. The Five Keys To Uber’s Valuation. Forbes. Retrieved from:
https://www.forbes.com/sites/jonathansalembaskin/2014/12/05/the-5-keys-to-ubers-
valuation/#665ac8494886
De Silva, D. (2019). Uber: An Underappreciated And Undervalued Company Suitable For Risk-
Seeking Investors. Seeking Alpha. Retrieved from:
https://seekingalpha.com/article/4297704-uber-underappreciated-undervalued-company-suitable-risk-
seeking-investors
Feiner, L. (2019). Uber stock falls after quarterly results beat estimates, but losses topped $1 billion.
CNBC. Retrieved from: https://www.cnbc.com/2019/11/04/uber-uber-q3-2019-earnings.html
Khan, Y. (2019). Uber stock tanks 6% after losing its London operating license: ‘There is a risk that
other cities could follow’ (UBER). Business Insider. Retrieved from:
https://markets.businessinsider.com/news/stocks/uber-stock-sinks-after-losing-london-operating-
license-2019-11-1028714120
Kilgore, T. (2019). It’s time to buy Uber’s stock, analysts say. Market Watch. Retrieved from:
https://www.marketwatch.com/story/its-time-to-buy-ubers-stock-analysts-say-2019-11-22
Kolakowski, M. (2019). 7 ‘Stable Growth’ Stocks That Can Lead as Economy Slows. Investopedia.
Retrieved from: https://www.investopedia.com/7-stable-growth-stocks-that-can-lead-as-economy-
slows-4772629
Levy, A. (2019). Uber will soon join an ugly but exclusive club: Unprofitable companies worth more
than $50 billion. CNBC. Retrieved from:
https://www.cnbc.com/2019/04/27/uber-one-of-only-3-unprofitable-companies-worth-more-than-50-
billion.html
Norton., D., Kaplan, R. (1996). The Balanced Scorecard. Translating Strategy into Action. Business
Book Summaries, 2014, HBR.
O’Brien, S.A. (2019). Uber addresses workplace harassment as rider safety concerns linger. CNN.
Retrieved from: https://edition.cnn.com/2019/07/16/tech/uber-sexual-harassment-purple-campaign/
index.html
Palmer, A. (2019). Uber and Lyft close at record lows as investors lose faith in ride-sharing
companies. CNBC. Retrieved from:
https://www.cnbc.com/2019/09/03/uber-and-lyft-stock-close-at-record-lows-as-investor-skepticism-
grows.html
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REFERENCES
Americas Business Review - May-June/2020
Spicer, A. (2019). Uber’s London woes show the need for a taxi app owned by drivers. The Guardian.
Retrieved from: https://www.theguardian.com/commentisfree/2019/nov/26/uber-london-taxi-app-
drivers-cities
Stankiewicz, K. (2019). Shares of Uber are now worth buying, Jim Cramer says. CNBC.
Retrieved from: https://www.cnbc.com/2019/11/25/shares-of-uber-are-now-worth-buying-jim-cramer-
says.html
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