Executive summary

This marketing plan focuses on the business decisions of Uber and demonstrates the
suitability to target high-end consumers in the 25-44 age bracket. Corporate climbers and
busy families living in the inner-suburbs are identified as our targeted audience, based on
the segments’ size, profitability and accessibility. Uber direct competitors all receive
considerable financial backing. This allows them to strongly position themselves in an
Australian market which has seen recent growth, thanks largely to innovative technology.
However, this will not deter Uber, as proven success in other major Australian cities
indicates that the food delivery submarket is a healthy industry.

However, there are strategic uncertainties to consider, mainly the wealth of competition
that the pick-up and delivery service industries possess. This will require Uber to frequently
assess their market position, and adapt to market changes with innovative strategies.
Customers already associate Uber with superior value over competitors, through brand
familiarity, accessibility and reliability. In order to maintain this value and appeal to wider
audiences, Uber needs to consider current consumer trends, such as a healthy lifestyle and
social/environmental responsibility. With these factors in mind, this plan highlights the
proposed implementation of 3 objectives, which will energise and differentiate the brand,
and reward customer loyalty.

Uber, after its successful launch in Melbourne and Sydney, is now proposing market
expansion into Brisbane City. Uber primary target market is Brisbane City residents aged 18
to 34 years old (Market-Line, 2016; Roy Morgan, 2016b). These consumers are living busier
lifestyles, resulting in diminishing leisure time and the greater need for convenience (IBIS
World, 2016c; Market-Line, 2016). The food delivery service market is highly competitive
with first tier competitors Foodora and Deliveroo, and second tier competitors Delivery
Hero and Menulog, already established in the market. Discretionary income is forecast to
grow in 2016, along with current food trends, suggesting a potential for profitability in this
market (IBIS World, 2016c). IBIS World (2016c) explains that the current consumer trends
surrounding healthy eating and foodie culture will boost demand for premium products,
providing a significant opportunity for Uber entry into the market. It is recommended that
Uber partners with well-know and popular boutique foodie restaurants, as well as
Brisbane’s Eat Street Market, in order to gain competitive advantage through establishing
an exclusive service offering.

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 TABLE OF CONTENTS
Executive summary

Introduction

1.1. Situation Analysis

1.1.1. Customer Analysis
1.1.2. Competitor Analysis
1.1.3. Environmental Analysis
1.2. Situation Analysis tools
1.2.1. SWOT Analysis
1.2.2. 5C Analysis
1.2.3. PESTLE Analysis
1.3. Market Analysis
1.3.1. Market Product Focus
1.4. Marketing Program Strategy and Tactics
1.4.1. Strategic Uncertainity
1.5. Financial Projection
1.6. Implemention Plan
1.7. Evaluation
1.8. References
1.9. Appendix
1.9.1. Appendix 1: Uber Users Age Breakdown
1.9.2. Appendix 2: Survey Results

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INTRODUCTION

Uber is a food delivery service created through the product extension of the ride sharing
app Uber. The service is offered through Uber separate smartphone app, allowing
consumers to order food from a selection of participating restaurants, which is then
delivered to them by Uber drivers for a small delivery fee. Uber is a strategic and creative
way to manage service intangibility through increasing demand and revenue whilst reducing
the perishability of unutilised Uber drivers; specifically between the hours of 10am and 2pm
during which there is excess capacity. Uber has recently entered the Australian market,
launching in Melbourne and Sydney earlier this year. As a result of its success in these
markets, Uber is now proposing market expansion into Brisbane City. The following report
will analyse the impact on the customers by introducing a new service in the food delivery
sytem and demand for this new service in which fresh vegetables will be delivered to the
customers and in the market.

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1.1. Situation Analysis

Situation analysis is basically the process of critically evaluating the internal and external
conditions that affect an organization, which is done prior to a new initiative or project. It
provides the knowledge to identify the current opportunities and challenges to your
organization, service or product. This in turn helps with devising a strategy to move forward
from your current situation to your desired situation.

Importance of situation analysis,

 Helps define the nature and scope of a problem

 Helps identify the current strategies and activities in place to overcome the problem
 Helps understand the opinions and experiences of stakeholders
 Helps give a comprehensive view of the current situation of the organization
 Helps detect the gaps between the current state and desired state  
 Provides information necessary to create a plan to get to reach the goals
 Helps identify the best courses of action to take during the project.

1.1.1. Customer Analysis:

This is the very first step to be conducted in Situation Analysis. Due to the centralisation of
restaurants within metropolitan areas, it is most efficient for Uber to target consumers
residing in Brisbane’s inner suburbs. In this project we aim to introduce the fresh vegetable
including chopped and peeled in the delivery system and want to analyse the reaction and
demand from the various customers for this product. A breakdown of target areas, and
their distance from the CBD are shown below:

Regions & Distance from Brisbane CBD

In order to evaluate the regions outlined in above table, a Queensland Government Custom Region
Report was generated based on current census data. Findings are shown below:

Brisbane Market Analysis - Custom Region

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Inner Brisbane regions within 8km of the CBD present a desirable consumer market for Uber
as shown in the above table. With an already connected population of 430,000, these
regions offer a large consumer base of one-family (59%) and lone-person households (29%).
There is a large demographic of consumers aged 25-44 (37%), a market that closely aligns
with Australia's current Uber user base (see Appendix 1) (Roy Morgan, 2016). The median
family income was $114,777 (medium-high bracket) - suggesting a propensity for high
calibre restaurants (Day-mark Community Monitor, 2011). Furthermore, 64.4% of
employees work within professional, administration, and managerial roles, presenting an
opportunity for Uber to target corporate environments.

Consumers in this target market are adopters of technology and readily integrate new
smartphone applications into their busy lifestyles. Therefore, the Uber app will be able to
tap into this technology savvy market and further satisfy the consumers need for
convenience through offering a simplified and easy to use path-to-purchase.

Consumers want that ‘restaurant-quality’ dining experience without leaving the house,
creating an emerging market for on-demand premium food delivery services. With a
movement toward food appreciation, plus healthy eating and foodie trends, and more
demand on fresh and green vegetable products, premium food is now considered an
excusable indulgence; lowering consumers price sensitivity. Uber can successfully service
this market and provide consumers with their ideal eating experience through offering
premium ‘restaurant-quality’ food with the added value of convenience.

1.1.2. Competitor Analysis

The Courier Pick-up and Delivery Services industry manifests low market share
concentration with the four leaders controlling below 40% of food courier industry revenue.

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With the industry being dominated by small businesses, this has consequently led to a
market which does not hold constraints for new competitors.

Foodora and Deliveroo are considered Uber primary first tier competitors due to their
strategic similarities. Both Foodora and Deliveroo, like Uber, offer a food delivery service
using their own drivers; partnering with restaurants that previously lacked the capability for
home delivery. The demand for high-quality food and fresh chopped and peeled vegetables
has resulted in similar value propositions among first tier competitors, making this a highly
competitive space (refer to Figure 1). However, one significant point of difference for Uber
comes down to company assets.

These first tier competitors have higher cost structures compared to Uber due to the supply
of uniforms and bicycles for their deliverers. Uber lower cost structure and large readily
available network of drivers gives them the necessary edge to compete in this market.

Uber second tier competitors include Delivery Hero and Menulog. These companies,
similarly to Uber, provide consumers with a restaurant marketplace where food can be
ordered for home delivery. However, their distribution strategies differ, with the delivery
service depending solely on the restaurant’s drivers.

Third tier competitors include the fast food industry’s major players such as Dominos, Pizza
Hut, MacDonald’s, KFC and Hungry Jacks (IBIS World, 2016b). Due to the differences in
strategy and positioning, these companies are considered Uber indirect competitors.

Uber Marketing position:

Positioning map for Uber competitors

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Direct competitors are identified as Deliveroo, Menu-log, Foodora and Delivery Hero. These
companies each hold large market shares due to substantial financial backing or control
large global market share in food delivery. With such financial input into these competitors,
they have achieved a strong position in the Australian market. The food delivery market has
grown drastically in the last five years, with three of the market leaders entering in that
time.

Indirect competitors include Youfoodz and Lite n’ Easy. These minor competitors have not
been able to gain the industry market share that the market leaders hold. Youfoodz have
positioned themselves to specialise in the delivery of fresh, healthy, easy-to-prepare meals
that can be stored for up to nine days. Lite n’ Easy similarly focuses on dietary plans,
providing meals and fresh green vegetable products to assist in weight loss.

UberEATS Competitor Analysis

Uber Foodora Deliveroo Delivery Hero Menulog

Strengths -Access to - High quality High quality - Broad menu - Broad menu
Uber drivers menu - menu - Pre-order - Pick up or
network Larger available delivery
-High-quality service area - Pick up or options
menu compared to delivery - Offer
-Quick Deliveroo options special deals
delivery - Pre-order - Large - Well
times available service area established in
- Acquired - Established the market
by Delivery in the market (launched
Hero in 2015 (launched in 2006)
2011) - Large

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 service area
Weaknesses - Relatively - Longer - Only - Longer - Longer
new product delivery recently delivery delivery
extension times - launched in times - times -
- Entering an Limited menu Australia in Reliance on Reliance on
already - Higher cost 2015 restaurant restaurant
competitive structure - Limited deliverers deliverers
market - Limited menu - Wide range - Wide range
delivery - Limited of low end of low end
personnel delivery menu menu
- Vulnerable personnel options - options -
due to recent - Limited Delivery Delivery
rebranding in service area requires min. requires min.
2015 - Higher cost order of $30 order of $30
- Delivery structure
requires min.
order of $20
Customer Food doesn’t 2.2/5 3/5 1.9/5 2.8/5
Reviews keep hot Poor delivery Long delivery Long delivery Long
during coverage, times, only times (double delivery
delivery. long delivery cover small estimate) and times with no
times (2hours service area. charged delivery
+) and poor without estimates
customer order given before
service. confirmation. payment,
Orders often poor
don’t make it customer
to the service.
restaurant.
Uber - Uber drivers for distribution - Larger potential service area compared
Competitive - Quicker delivery times to 1st tier competitors
Advantage - High quality menu - Stronger brand association and loyalty
- Better customer service and service
quality

1.1.3. Environmental scan

Uber is the well-recognized brand in the market, as the company has the high standard of
service; through the environmental scanning, it is known that the company has the
competitors in the market, as the biggest competitor is food delivery and ordering system..
Through the analysis Uber is focused on creating the sharing economy services so that there
could be better advantages for the company, as the there is loyalty in Uber services and the
company is earning low-profit margins because the bad name created in the market, there
are issues like fraud and scandals that exploits the opportunities example, sharing economy

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services through UberEats in the market. Uber need to focus on the best and satisfied
customer’s service. There are maximum players in the market and the customers could use
another application if the results are not satisfactory for the consumers. Moreover, Uber
can make the services much better because there are low treats of entrants in the market,
as good image and good brand name is required, the company need to have the maximum
resources in order to start the business like Uber, however, the bargaining power and the
revelry among the industry is high.

1.2. Situation Analysis Tools:

There are many tools used to do a situation analysis, and the following tools are the ones
most typically used.

1.2.1. SWOT Analysis

The SWOT analysis is a tool that can be used to scan the internal and external environment
of an organization. It helps identify strengths you can take advantage of and weaknesses we
can take action on, as well as opportunities and threats for success.

One of the most acclaimed start-ups, which showed the power of the internet and has a
really inorganic growth is Uber. UberEats is an app and is known as the company which has
the largest customer support gained through food delivey system and yet, it does not own a
single car by itself.

The company continues to grow and has become main-stream despite all the criticism and
negative reviews. Currently, Uber has many opportunities to introduce new features and
new service products to give it a competitive edge over its competitors. Every company has
certain strengths and weaknesses.

1. STRENGTHS:

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  Dominant leadership position :

Uber has dominated the ride hailing market operating in approximately 83 countries and
over 674 cities worldwide with over 77% share of the US ride hailing market. As of 2017,
the company’s customer base rose to 40 million per month. First mover
advantage has given it an opportunity to capture the biggest share of the ride sharing
industry.

 Big Brand name and awareness:

Uber has become the world’s biggest ride sharing and food delivery service operating in
more than 83 countries and 674 cities globally. As of 2018, the company commands
73%share of the market in US. This is in line with a consumer survey in the US that showed
76% of ride hailing app users used Uber more frequently compared to 10% for main rival
Lift. Another 70% surveyed, who hadn’t used the company’s services stated they were
familiar with Uber brand name.

 Adaptive:

With its different services, Uber has made its services easy to use with a press of a button
in the mobile app and the closest uber restaurant to your location will be hailed. It is thus
easy to use and also affordable for different classes of people, which has increased its
customer base and market share. According to research, most of the customers who use
Uber services have mentioned price, easy of use and convenience as their top reasons for
using the service.
 Highly Diversified:

Uber has diversified its services through offering alternative transport modes including
transit tickets, food delivery (Uber Eats), rental cars (Uber Rent), bikes (Uber Bikes) and cash
payment options. This is a major strength that has enabled it to take a big share of
consumer expenditure across differing public transportation modes, short term rentals,
package delivery and short haul services, helping it grow market share, revenue and profits.

 Dynamic Pricing Strategy:

Uber has adopted the dynamic pricing strategy which works on the demand supply principle
of economics. Higher the demand, Higher the price. This becomes really beneficial
for the company and the drivers. In peak hours as well as in Night time, drivers earn a good
amount of money.

 Emphasis on Customer Satisfaction:

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Uber has always prioritised customer satisfaction. Uber has understood that it is serving in a
totally customer driven market where competition is increasing. To keep an edge over
the rivals, it needs to provide better customer satisfaction and enhanced user experience.

2. Weaknesses

 Sexual Harassment:

According to a report by CCN, at least 103 Uber drivers have been accused of sex abuse
by clients in USA in the past four years . As the most valuable privately
held tech start-up in the world operating in over 630 countries, the sexual assaults
have ruined its reputation in some US geographies with many women turning to other ride
hailing services like Lift. Similar incidences have been reported in India where a rape charge
against an Uber driver in New Delhi led to its temporary ban.

 Highly Dependent On Internet:

Drivers are the face of the company and thus the company’s image depends on the
behaviour of drivers towards the customer. This is a highly uncontrollable situation even
though strict guidelines are provided to the drivers. Uber is heavily dependent on internet
connectivity to expand and develop itself in developed countries. Thus, it is facing problems
in developing and emerging countries where internet is slow or poor. 

 Caters only to tech savvy Individuals:

Digital Literacy in developing nations is low and hence technology based applications such
as Uber only cater to those who are technologically update.

 Low barriers to entry:

Uber is in an industry where the barriers to entry are very low so it will face competition
in multiple fronts. Already in India, Meru, Ola and others are giving tough competition to
Uber.

 Controversies:

Uber has encountered controversies in the past mainly because of the drivers and their
behaviour. This affects the image of the company and a trust deficit is created in the minds
of the customer which is difficult to cover up.

3. Opportunities

 Dissatisfaction with unorganised market:

Customers are unsatisfied with the unorganized cab market which presents an opportunity
for Uber to take advantage of. This is one of the main reasons for the success of Uber. Local
cab drivers and delivery boys are known to be rude and do not comply.

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  Increasing Internet Penetration:

With Government’s move to digitize India, Number of smart phones are increasing and
technology based applications like Uber can expand their services to other cities and enlarge
its footprint over the country.

 Partnership with hospitality brands:

Uber can partner with hospitality and hotel brands to serve millions of tourists who
regularly need taxi services while staying at a hotel.

 Rising Disposable income:

With rising disposable income, customers are willing to spend higher on convenience. The
growing income of the middle class consumers globally has also proved profitable for Uber.

 Logistics:
A smart idea for Uber can be to launch movers and packers support whereby people can
search movers and packers in the nearby area via Uber. Local logistics can also be
integrated. Though this is easier said then done.

4. Threats

 Government Regulations are Unclear:

The primary point of disagreement between cab aggregators and government regulators is
about their legal status and whether they should be treated as conventional taxi companies
or as IT companies.

 Customer Retention and Brand switching:

As competition rises, it becomes all the more difficult to retain customers and drivers for
Uber. Any monetary advantage can sway the customers and drivers from Uber.

 Low Margins:

Uber helps the drivers to get a high number of daily rides but it does not have a high-profit
margin for the drivers and thus they can easily be swayed away.

 Revolt from unorganised market:

The unorganized market of cab drivers can revolt against such companies which are taking
away the bread and butter of drivers from unorganized market. Such a revolt will directly
affect the operations of a brand like Uber.

1.2.2. 5 C Analysis
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This situation analysis tool helps assess the organizational environment from 5 different
areas that may affect your marketing decisions.

 Customers;  Include the analysis of market segments, customer requirements and

demands, market size and growth, retail channel and information sources, buying
process, consumer trends, etc.
 Competitors; Include the analysis of current and potential customers, customer
products and positioning, their strengths and weaknesses, market share etc.
 Company; products or services, brand image, goals, company culture, strengths and
weaknesses, technology and experience etc.
 Collaborators; distribution channels/ distributors, suppliers, alliances etc.
 Climate; political factors, economic factors, socio-cultural factors, technological
factors, environmental factors, and legal factors.

1.2.3. PESTLE Analysis

1. Political factor

When Uber started its operations in 2009, there was no other ride-hailing taxi app.
Accordingly, legislation related to the regulations of such services did not exist. With the
advent of Uber, the following and other questions needed to be answered by local
governments and authorities:
 Who is responsible in case of car accident: Uber or the driver?
 Does it need to be compulsory for Uber drivers to have taxi licences?
 Can ride-hailing giant list thousands of its drivers as contractors, but not employees?
 Does the company has to comply with minimum wage requirements?
Dealing with above and other related questions in different countries and regions have
caused charged political debates. While some local governments have been favourable
towards the company taking into account its modern business model, others demanded
strict adherence to the rules and regulations making no difference between Uber and
regular taxi companies.
2. Economic Factors:
The range of economic factors affecting businesses is extensive and the most important
factors include macroeconomic climate, inflation rate, interest rate, currency exchange rates

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and unemployment rates. Moreover, economic factors such as cost of labour, changes in
disposable income of consumers and tax rates also affect businesses.
For example, due to a new tax law introduced in the US in February 2018 ”freelancers and
other independent contractors will be able to deduct 20 percent of their income from their
taxable income before paying the new lower tax rates”. This particular change in external
economic factor has positive effect on Uber, because it increases attractiveness of becoming
it’s driver from a financial point of view.
3. Social Factors:
Customers of Uber enjoy it’s easy to access platform. Choosing an appointment and pick-up
time is easy using the app on smart phones. It requires no communication rather than a few
presses of a button. The cheaper price is enticing to many, which has led to the explosion of
Uber’s growth all over North America. As consumers enjoyed their rides, they posted about
their experience on social media sites. Word of mouth spread awareness quickly. But with
the popularity increase, prices in major cities rose too. Good for Uber, but not welcome by
riders. Still, because of the ease of use, customers choose Uber frequently. The more
accessibility. Uber provides, the more people will use its services rather than taxis or even
public transportation.
4. Technological factors:
Uber spread like wildfire through social media. People explaining their riding experiences
online spread and share stories. It encouraged new users to do the same. Buyers are
searching for cheaper transportation options and Uber fulfilled this need. Consumers make
appointments through the app. An estimate for the ride cost can appear in the app - it
depends on many factors like drop off location, traffic and weather. They can pay for the
ride up front through the app too. And drivers who are on duty respond and pick up the
passengers to take them to their destination. The app is incredibly important to Uber. It
can’t function if the app goes down or suffers difficulties. The company must ensure
everything is working, reliable and ready to go. Many drivers use 4G networks to connect to
the app - it’s deemed critical to do their jobs.
5. Legal factors :
Traditional taxi companies have to buy expensive licenses for exclusive rights to offer street-
hail trips, whereas under Uber’s new rules, it’s drivers act as independent contractors rather
than employees, so there are significant risks to both riders and drivers to settle any
disputes should accidents occur. They are not entitled to the minimum wage, paid vacations
or health insurance. Thus, the company undercut prices due to lower overheads (e.g.
administrative and running costs). Uber is reported to be banned in many countries (e.g.
Belgium, France, Germany, Italy and Spain) for its unique business model. The consequences
are more regulatory restrictions, fines and bans as governments in Latin America crackdown
on taxi licensing that could derail its regional expansion plans (BMI 2015a).
6. Environmental factors :
Through sharing economy, firms can promote the concept ’sustainability’ as a value
proposition via either reduction of new resources acquisition by fully utilizing existing idle
resources or reducing the carbon emissions as in the case of Uber as argued by Schor
(2014). Uber’s effect on the environment is ever shifting. Many believe it increases traffic
congestion and fuel usage. But studies have shown Uber hasn’t increased congestion.
People may use Uber instead of public transportation. Analysts will have to compare Uber
fuel usage versus public transit versus own transportation for a thorough analysis of Uber’s
environmental impact. As many different factors can contribute to the final number.

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1.3. Market Analysis

1.3.1. Market Product Focus:

In the emerging market of food delivery services, UberEATS will be business to business
focused. Changing consumer trends have given the restaurant industry strong growth in the
last five years, with an annual growth rate of 6.2%, totalling to $13.1 billion in revenue.
Currently, high-end restaurants have the highest demand and largest market share in the
industry at 39%; these restaurants are looking to expand their takeaway options in order to
capture the growing convenience market. Industry revenue growth is forecasted at 2.3% for
the rest of 2016 and 1.4% over the next five years. Discretionary income is also forecast to
grow in 2016, along with the current convenience and food trends, providing UberEATS an
opportunity for profitability in this market.

UberEATS submarket is courier and delivery services; specifically home food delivery
services. Door to door delivery services account for 25.4% of market share in the courier and
delivery industry and has seen strong growth as a result of the online shopping boom; this
growth is expected to continue during 2016. The barriers to entry are low, the market is
highly competitive with large international and well-known brands already established,
posing potential threats to entry. Key success factors of Uber market and submarket
include: accessing the high-end niche food market, offering high quality food and excellent
customer service, adopting new technology (such as the UberEATS app) and keeping cost
structures low. Uber strategic necessities include a high-end ‘restaurant quality’ range that
completely excludes low end fast food options. UberEATS strategic strengths can create
competitive advantage through their large potential network of delivery drivers, the
capabilities for quicker delivery times and larger service area, as well as offering consumers
a customised and wider range of menu options.

UberEATS is entering the restaurant industry as an intermediary food courier between

restaurants and customers. After launching in Melbourne, UberEATS has demonstrated the
possibility to make up 60-80% of restaurant’s orders a night. The restaurant industry has
grown by 6.3% annually and is projected to continue growing in the next five years
(Customers are busier with less leisure time and more discretionary income. Restaurants
offer customers a chance to save time on meal preparation. Australian consumers are
considering health in all aspects of food consumption). Consumers are focusing on quality,
and are willing to pay a premium price for high quality and healthy meals. UberEATS is
entering a promising submarket in Brisbane; the food delivery market. Using Porter’s Five-
Factor Model of Market Profitability, to profile the industry’s profitability and attractiveness
depending on competition amongst existing firms, threat of substitute products, bargaining
power of consumers, bargaining power of suppliers and threat of potential entrants.

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 Porter’s Five-Factor Model of Market Profitability

Demand for online shopping has increased exponentially and has in turn, raised demand for
courier businesses. The growing desire for personalisation, convenience and preference to
managing more online have led to the emergence of “Food Delivery 2.0” and opening the
market to third-party services such as UberEATS. As UberEATS is a delivery service, there is a
concern that this niche market loses a restaurant’s branding by using an independent
contractor to deliver meals.

1.4. Marketing Program Strategy and Tactics

 Early Adopter Advocacy: Word of mouth marketing has been essential for Uber. The
way the company initially fostered it was by seeking out Silicon Valley movers and
shakers and getting them to advocate for the brand. While many techies are constantly
looking for new products and services that transform their ways of life, Uber also took
aim at them by sponsoring events, giving first-time riders a free trial, and adopting a
hyper-local strategy that changes shape with each new city the company enters.

 Referrals: Early adopters have since been able to take advantage of Uber’s referral
marketing program to give friends free rides, while earning credits themselves. This give
money-get money program gave first-timers a more concrete reason to try the service.
It’s been massively successful both for Uber and for certain super-fans, one of whom
earned over $50,000 in referral credits. Drivers also get referral incentives, thereby
making acquisition on both the customer and “contractor” sides faster and easier.

 Reviews: One massive differentiator between Uber and traditional taxis is that the
delivery and transportation disruptor has rating systems for both customers, drivers and
passengers. Drivers are probably more motivated by their ratings, since passengers can’t
easily find out where they stand. Either way, the system promotes trust in Uber and
better behaviour on the parts of both driver and passenger. A certain amount of

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 uncertainty (or dread) about how chatty or inebriated one’s travel buddy will be is
thereby eliminated, making everything a little smoother for everyone.

 Stunts: Every time Uber launches a new special offer, groups of millennials around the
world cheer. Sometimes the service delivers kittens to offices and other times it lets
passengers ride with famous musicians like Diplo or Matt & Kim. These exciting “surprise
and delight” tactics work to please loyal customers, generate positive buzz, and give
Uber a more fun and friendly image, which is something it often lacks in comparison to
its competitor Lift.

 Partnerships: Uber has implemented a number of partnerships to entice both first-time

and loyal customers to take a ride. Certain Capital One credit card holders can get
discounted rides, Starwood Hotels Preferred Guest members can earn hotel points for
every Uber trip they take, and Spotify users can link their profile to their Uber account to
play their music while they ride. While the Capital One and Starwood Hotels
partnerships give those customers a financial incentive to ride, the Spotify alliance is just
a fun add-on for users coming home from the bars. All of these partnerships, though,
give more legitimacy to the gargantuan startup.

 An Omni-channel approach: Uber didn’t fix one aspect of the system (e.g. mobile
payments for the existing taxi infrastructure), they tackled the whole experience from
mobile hailing, seamless payments, better cars, to no tips and driver ratings.” The
product is tapped into customers’ lives in a wholly revolutionary way compared to the
old method of hailing or dialing a cab. The omni-channel tactics don’t even stop there.
Uber has recently partnered with Facebook Messenger to let users request rides from
within the messaging app. In certain cities, the company has set up physical kiosks with
breathalyzers, which will hail a ride for bar patrons who’ve had a little too much that
night.  UberEATS is the company’s rapid food delivery service and standalone app.

1.4.1. Strategic Uncertainity

Increasing competition presents strategic uncertainty as the food courier pickup, and
delivery service industry faces a high level of market competition. Uber’s competitive
advantage is their large network of available drivers which will buffer new market entrants.
Driving factors for competition include price, delivery time, marketing, and reputation.
Scholliers (2014) identifies a future demand for food delivery services as consumers are
demanding convenience. Fluctuations in disposable income has the potential to impact
consumer demand and revenue in this sector. In order to counteract changes in disposable
income, UberEATS will need to continually reassess their market position and employ
responsive marketing strategies that adapt to changing market climates.
Consumers are continuing to show concern for the economic outlook and, as a result, are
currently focused on increasing savings and reducing debt; exercising caution on personal
spending. This can be considered a potential threat to UberEATS due to the lowering of
consumer confidence. However, consumer confidence has been steadily increasing since
2016. Despite this, UberEATS should continue to monitor and analyse the economic outlook
and its associated consumer confidence. UberEATS will also be affected by industry

17
regulations. Drivers will need to abide by strict food safety standard laws involving hygiene,
storage and transportation of food.
Strategic Uncertainty Impact Analysis

1.5. Financial Projection

Itemised Budget for UberEATS Marketing Strategy

UberWEAR is estimated at $2 a piece, for 5,000 pieces is $10,000 as shown in above table.
The influencer campaign is also tied to UberWEAR, at an estimated $100 per post, using 10
influencers, posting twice, the total cost would be $2,000. To differentiate UberEATS from
the competition UberEATS is focusing on adding premium restaurants by offering free
deliveries on Monday, at an estimated average of 500 deliveries a day the cost would be
$30,000 over three months. Using Facebook as the advertisement platform for this
campaign would cost $16,000. To maintain customers using the app UberEATS will develop

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a loyalty program of $15 off the fifth meal, which would cost $180,000 in the first three
months.

1.6. Implementation Plan

The following points discussed below describe the implementation plan and strategy of uber
company.

 Market Penetration: Uber has diversified its services to many levels, it engages in
market penetration via application of various sale promotion techniques. These
incorporate conveying promotion codes to enable clients to have a mark-down for
their next ride and “uberVIP” unwaveringness program that prizes riders with
extraordinary access to most noteworthy values drivers.

 Product Development: This engages in providing the new products or services to sell
to the existing customers. In this project, Uber is aiming to introduce the delivery of
fresh chopped and peeled vegetables to the market and to their customers into
order to develop the product demand. Uber has been involved into taking this
strategy to various levels, the international transportation technology steadily rises
its service array.

 Market development: Uber at the beginning launched only in the San Francisco in
2009, but now it currently operates in more than 760 cities worldwide. It is further
planning and expected to be expanded in new market growth under the new CEO.
However the business sectors that constitute the biggest offer of its client base and
incomes or US, China, Brazil, India and Mexico.

 Diversification: This is considered to be the dicey strategy because initially they

started only as a taxi company, but later the ride-hailing firm entered take away food
delivery segment with UberEats. Initially UberEats launched in 10 cities. This was a
total different move of Uber.

 Business strategy: Porters generic strategies spread out two methodologies for
market development – product differentiation and cost leadership. The achievement
can be ascribed to the mix of these strategies, bringing about more accomplishment
than organisations utilizing one system.

 Cost Leadership: Any individual who claims a vehicle and can drive can turn into a
driver for uber and win cash working low maintenance. In this way, this permits cost
cutting on framework and support thusly this advantage can be passed to the two
drivers and rider which enables Uber to charge bring down expenses and without
acquiring any budgetary misfortune.

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  Product Differentiation: Uber provides with a choice to the riders to select their
preferred ride in terms of the comfort range from low cost UberX to the premium
Uber black. It is uber app that allows the riders to connect to the drivers device to
pay for the ride and rate their experience harmonizing to their convenience.

1.7. Evaluation

Uber is one of the world’s most valuable private companies, driven by its soaring revenue
growth and expansion into new markets. Uber has been actively prepping for an IPO (likely
in 2019), focusing on cutting its losses by divesting underperforming operations and
improving its operating metrics.

We have created an interactive dashboard analysis breaking down the company’s reported

$48 billion valuation (based on its most recent fundraising in December, though valuation
reports vary) using revenue metrics including monthly active riders, the number of rides per
rider per year, revenue per ride, net revenues and revenue multiple. We can modify our
forecasts for 2018 to arrive at your own estimate for Uber’s valuation.

Uber’s monthly active riders grew from 50 million in 2016 to 75 million in 2017, with the
number of rides hailed by each rider also trending higher. We expect monthly active rider
growth to remain strong in 2018, as Uber doubles down on emerging markets, taking total
rides delivered to ~5.5 billion this year. Note that the sources for this data and our estimates
are listed at the bottom of this note.

Gross revenues could cross $50 billion in 2018 as the number of rides delivered soars,
although revenue per ride may remain at similar levels. Gross revenues are the total value
of the rides billed to customers before Uber takes its cut. Meanwhile, Uber’s share of gross
revenues has declined due to its aggressive promotions and partner incentive pay-outs.
However, the company has taken steps to reduce incentive pay-outs and it is possible that
its share of revenues could stabilize in 2018.

Monthly Active Riders:

 2016: Uber reported 40 million riders in October 2016, Extrapolated this to

50 million at end of the year.

 2017: Recode

Number of Rides Per Year:

 2016: Estimated based on December 2015, July 2016 and May 2017 data
from Recode

 2017: Recode

Gross And Net Revenue:

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  2016: Bloomberg

 2017: WSJ

Valuation Multiple:

 Derived From Softbank investment at $48 billion in late 2017.

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1.8. REFERENCES

[1]. UBER Website https://www.uber.com/in/en

[2]. SWOT and Pestel Analysis https://pestleanalysis.com/pestle-analysis-ub

[3]. Menulog. (2016). Retrieved 24 August, https://www.menulog.com.auhttps://deliveroo.com.au

[4]. Australian Food News. 2016

http://www.ausfoodnews.com.au/2016/02/03/australiandietitians-predict-top-5-nutrition-trends-
for-2016.html

[5]. Foodora. (2016 from https://www.foodora.com.au

[6]. IBISWORLD.(2016b).
http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/au/industry/default

[7]. http://www.smh.com.au/business/retail/ubereats-ubers-home-delivery-service-iscoming-to-
australia-20160225-gn3iem.html

[8]. https://pestleanalysis.com/swot-analysis-for-a-delivery-service-company

[9]. https://samanthamcvicar.files.wordpress.com/2016/11/amb359-uber

[10]. https://www.marketing91.com/marketing-strategy-uber

[11]. https://bstrategyhub.com/swot-analysis-of-uber-2019-uber-swot-analysis

[12]. https://www.annexcloud.com/blog/ubers-marketing-strategy-in-7-steps-revisited

[13]. https://www.forbes.com/sites/greatspeculations/2018/02/22/breaking

[14]. https://zachariahmillerblog.files.wordpress.com/2016/06/ubereats

[15]. https://www.soulcreationz.com/post/strategic-marketing-analysis-of

[16]. https://www.managementstudyguide.com/financial-management.html

[17]. https://www.toppr.com/guides/business-environment/business-
functions/financialmanagement/

[18]. Uber. (2016). https://www.uber.com/enAU/?exp=hp-c

[19]. Magner, L. (2016a). retrieved from

http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/au/industry/d efault.aspx

[20]. Magner, L. (2016b). Courier and pick-up and delivery services in Australia. IBIS World. Retrieved
August 29, 2016, from
http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/au/industry/d efault.aspx?

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1.9. Appendix

1.9.1. Appendix 1: Uber Users: Age Breakdown

1.9.2. Appendix 2: Survey Results

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