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Management Analysis of Uber

Technical Report · July 2019

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 Department of Aerospace Engineering

Management Analysis of Uber

Author:
Aayushi Deohans (SC16B002)
Amisha Kumari (SC16B006) Submitted to:
Jagriti Saha (SC16B019) Dr. V. Ravi
KVNS JayaKalyani (SC16B020)
Samridhi Sharma (SC16B044)

Academic year 2019-2020

Contents
List of Figures 4

1 Introduction 6

2 History of Uber Cabs 8

2.1 The Uber Logo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

3 How UBER Works ? 10

4 Leadership Qualities: 12

5 Management Strategies 14

6 How and Why Uber became successful? 23

7 Funding 25

8 Uber Revenue and Usage Statistics 26

8.1 Key Uber Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.2 Uber Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

9 Uber Finances 30
9.1 Financial Management:Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.2 Elements of Financial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.3 Financial Model of Uber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.4 Financial results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.5 How does Uber make money and optimize it to make more profit? . . . . . . . . . . . . . . . 33
9.6 Why is Uber in losses? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.7 Uber valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

10 UBER Competitors 38
10.1 Uber vs. taxi usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.2 Uber vs. Lyft vs. Grab vs. Didi Chuxing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.3 Uber vs. Lyft drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

11 Criticism and subsequent changes in strategies and policies 42

11.1 Driver criticism of classification of independent contractors . . . . . . . . . . . . . . . . . . . 42
11.1.1 Driver criticism of compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.2 Misleading drivers of potential earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.3 Criticism for collecting fares during a taxi strike . . . . . . . . . . . . . . . . . . . . . . . . . 43

2
 11.4 Aggressive strategy for dealing with regulators . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.5 Allegations of inadequate background checks and vetting of drivers . . . . . . . . . . . . . . . 43
11.6 Settlement with victims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

12 SWOT Analysis 45
12.1 Strengths: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.2 Weaknesses: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.3 Opportunities : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.4 Threats : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

13 PESTLE Analysis 50
13.1 Political factors : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
13.2 Economic factors : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
13.3 Social factors : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
13.4 Technological factors : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
13.5 Legal factors : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
13.6 Environmental factors : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

14 Further Extensions of Uber,Beyond Ride-sharing 53

15 Future Plans : Changing the future of autonomous transportation technology 56

References 57

3
List of Figures
1 Uber Success Timeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2 Present and former CEO of Uber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3 Uber Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4 Uber Surge Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5 Average cost of 10km Uber ride around the world . . . . . . . . . . . . . . . . . . . . . . . . 28
6 UBER US Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7 UBER London Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8 Three important aspects of financial management . . . . . . . . . . . . . . . . . . . . . . . . 30
9 Uber net revenue, millions of USD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10 Uber gross revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11 Uber’s net revenue and GAAP loss in 2014 and 2015 for 3Q’s . . . . . . . . . . . . . . . . . . 33
12 Fares of Uber, base price and prices for every mile, minute and cancellation fees for two types
of vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13 Uber core financials as of quarter 2 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14 The comparison graph for net and gross revenue of Uber for the year 2018 . . . . . . . . . . . 36
15 Uber valuation history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
16 Uber valuation compared to other ride-hailing businesses . . . . . . . . . . . . . . . . . . . . 37
17 Uber vs. taxis vs. Lyft rides per day in New York . . . . . . . . . . . . . . . . . . . . . . . . . 38
18 Uber vs Lyft vs Grab vs Didi Chuxing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
19 Comparison of costs of Uber with a indigenous company Ola(India) . . . . . . . . . . . . . . 40
20 Uber vs. Lyft rating by business travellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
21 Uber vs. Lyft rating by business travellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
22 Uber Eats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
23 Uber Freight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
24 Uber Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
25 Uber Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
26 Uber Bikes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
27 Uber Self-Driving Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
28 Uber ELEVATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

4
Acknowledgement
We sincerely acknowledge Dr. V Ravi for giving us an opportunity to delve into this exhilarating
experience of team work coupled with insights to the amazing corporate world of transportation
network companies and imbibing us with all the insights, knowledge and enthusiasm to under-
take research, understand and analyze efficiently our topic of Uber. We would also like to thank
Ravi sir for teaching us with so many real-life examples and significance of management in each
area or organization, which has inspired us to take a cab service which is a part of our daily life as
out topic. We would like to thank our team members for immense contribution from each side
and making this project possible and also IIST internet services which has been immensely useful
in research.

5
 1
Introduction
In recent years, a concept known as the ”sharing economy” has taken the market by storm, giving
rise to a number of truly revolutionary businesses. While a number of companies have cashed
in on this trend, the sharing economy’s undisputed king is Uber as a ride-sharing company that
empowers anyone to start earning money with their vehicle and enables those needing a lift to
quickly and affordable to find a ride. The amount of success Uber has been able to achieve in
their short history is remarkable.

Uber’s disruptive technology, explosive growth, and constant controversy make it one of the
most fascinating companies to emerge over the past decade. The almost ten-year-old company
soon grew to become the highest valued private start up company in the world.

Uber Founders, Funding received and Time line:

• Founders: Travis Kalanick and Garrett Camp.

• Company Headquarters: San Francisco, California, United States.

• Funding received by Uber: $22.2 Billion. (as of December 2017).

• Company Valuation: Over $70 Billion.

• Number of Users: More than 50 Million.

• Number of registered drivers: Approximately 7 Million (as of November 2017).

• Average number of daily Uber Trips: 1 Million

6
Figure 1: Uber Success Timeline

7
 2
History of Uber Cabs
Uber was first founded in 2009 by Garrett Camp and Travis Kalanick under the name Uber Cab.
At the time, Camp had recently spent 800 dollars hiring a private car to transport him and his
friends on New Year’s Eve, and he was trying to figure out a way he could make the service more
affordable to the average person. Camp reasoned that allowing multiple people to share the cost
of the service would drive it down, and Uber Cab was born.

In 2010, a man named Ryan Graves responded to a tweet sent out by Travis Kalanick and be-
came the first Uber Cab employee. He was made a general manager and was given between 5-10
percent of the company. Not long after, he was named the company’s CEO.

In 2011, the company’s name was shortened to Uber, and in 2012, Uber rolled out Uber X - a
service which allowed people to work for Uber driving their own car. Since then, Uber has been
on the cutting edge of a number of transportation services and technologies, from self-driving
cars, to a carpooling service, and even a helicopter service.

Today, Uber operates in 300 cities across 6 continents, and in 2016 Uber grossed 20 billion
dollars. Interestingly enough, Uber actually lost 2.8 billion dollars on that 2016 gross, showing
just how committed the company is to continuing to push the envelope and develop new services
and technologies that will revolutionize the transportation industry.

While a lot of factors played into launching Uber into the level of recognition and success the
company enjoys, one of those factors was the ever-recognizable Uber logo.

8
2.1 The Uber Logo

In 2010, when the company was still Uber Cab, they unveiled a logo that featured a red ”UC” with
the company’s name above the logo. When the name was changed to Uber, the logo dropped the
”C” as well as the word ”Cab” in the name above it. However, the rest of the design stayed the
same.

The goal in this redesign was to make the Uber logo look more modern and luxurious – both
themes that Uber tries to touch on in their marketing.

In 2016, though, the Uber logo underwent another major overhaul, this time ditching the ”U”
and the company name entirely. Some described the new logo as bizarre, yet there is a lot of
meaningful elements to its design that really convey the type of company that Uber hopes to be
moving forward.

Speaking about the new logo, Uber said, ”This updated design reflects where we’ve been, and
where we’re headed. The Uber you know isn’t changing, our brand is just catching up to who we
already were.” In September 2018, just two days after hiring their first chief marketing officer they
came out with a new brand.The new visual identity was designed by Wolff Olins. Molly Watson
the director of verbal identity at Wolff Olins San Francisco, said the new logo was designed to
represent Uber’s growth ans security.

9
 3
How UBER Works ?
• Step 1:
A rider opens the app:
The rider enters their destination, can see wait time, car sizes, and price; then confirms their
pickup location and taps Request.

• Step 2:
The rider is matched with a driver:
A nearby driver sees and chooses to accept the rider’s trip request. The rider is automatically
notified when the driver’s vehicle is about a minute away.

• Step 3:
The driver picks up the rider:
The driver and the rider verify each other’s names and the destination. Then the driver starts
the ride.

• Step 4:
The driver takes the rider to the destination:
The app gives the driver the option to access turn-by-turn directions, so the driver can focus
on getting there and the rider can focus on enjoying a comfortable ride.

• Step 5:
The driver and rider leave ratings and reviews :
At the end of each trip, drivers and riders can rate each other from 1 to 5 stars. Riders can
also give the driver compliments. In cities where tipping is available, they can also add a
little extra to show their gratitude.

10
11
 4
Leadership Qualities:
The sexual harassment claims, the bullying, the intellectual property lawsuit are attributable to
former leader Travis Kalanick’s brash and admit-no-errors leadership style. Owing to such con-
troversies, Kalanick had to leave CEO post in june last year.The company’s newly named CEO,
Dara Khosrowshahi (who was also former CEO of Expedia), has mastered good leadership qual-
ities which might be the medicine for the scandal-prone company.

(a) Dara Khosrowshahi, current CEO (b) Travis Kalanick, former CEO

Figure 2: Present and former CEO of Uber

In one of Letter from Silicon Valley says to Dara Khosrowshahi as :

”Dara Khosrowshahi is charged with turning the scandal-plagued startup into a traditional company—
without sacrificing what made it successful.”
As per media reviews and opinions of working staff, following Good leadership quality traits were
seen in Khosrowshahi leading the company.

1. Khosrowshahi expresses just the sort of vulnerability that kills shame and allows a team to
trust that if they also experience failure and fear (both pretty much a guaranteed part of
doing anything great), their leader will understand and support them.

2. Showing emotions with employees (which most of the celebrated leaders don’t do) but any
company hoping for team cohesion, boldness, and innovation, it’s an essential one for a boss
to have, and Uber’s Dara Khosrowshahi definitely have that.

12
3. He is a reflective leader and a a relatable boss.

4. He cares about his team, including the interns and looks beyond the resume.

5. He is calm unlike former CEO who is reported to have aggressive and rude behaviour with
employees. He is also seen to respect women opposite to Travis Kalanick who is reported
to have sexual harressment cases.

6. He avoids distractions, takes risks that matter, and find ways to simplify. (follows K.I.S.S.
Rule ”Keep it simple, stupid”)

13
 5
Management Strategies

Figure 3: Uber Organizational Structure

Uber’s Growth Strategy - Study User’s Problems and Requirements

For any startup owners or Entrepreneurs, before developing a ride-sharing app, in fact, any
application, it is important to understand users’ current challenges and requirements. Herein, we
have compiled top major challenges, which were noticed solved by Uber before the emergence
of any online ride-hailing services through the mobile app.

• Challenge 1: The Fear of Unfamiliarity

Uber noticed that people had a fear of unfamiliarity of drivers. Moreover, the majority of
people were not comfortable to ride with the unknown driver. Just because they would not
be much familiar with the driver.
Solution by Uber

14
 Uber had taken this challenge very seriously, and they came up with the idea in which people
can see the profile and status of drivers before hiring the cab. Through the Uber app, users
can now see the driver’s profile, his past trips, and the ratings. By inducing this trend, Uber
has broken the fear of unfamiliarity in people. Check out this image, for example.

• Challenge 2: Not Able to Get Real-time Notifications About The Ride

Before Uber, people were not able to get the real-time notifications of their rides. Due to
this, people had faced hurdles in their daily lives, for instance, reaching out to their offices
or doctor appointments.

Solution By Uber
Uber had noticed these issues were faced by people, and they came back with the feature in
which people could check out driver’s location after booking the cab and they also get real-
time notifications about their rides in terms of arrival and the cancellation of rides. If you
are planning to create apps like Uber, then this solution can wonder for your ride-hailing
business.

• Challenge 3: People Were Afraid to Stick in Traffic for Long Hours

Due to the long waiting hours of a traffic jam, people were usually stuck in their routes. One
of the biggest challenges, users faced because of the lack of knowledge about the shortest
routes, where they could meet less traffic.

Solution By Uber
Uber closely noticed this challenge, and they worked on it. Uber came up with the idea
in which Uber app only provides one of the shortest routes with less traffic area to Uber
drivers. From now on, people have less fear of stuck in traffic for long hours while driving

15
 through the Uber app. In fact, they have advertised this single feature in India with # Look
Before You Leave concept.

• Challenge 4: Users Wanted to Go Cashless in Taxi, too

In the past, users’ first concern was – cashless payment while booking taxis. They were not
able to pay their drivers online. And, this was the major challenge was faced by the majority
of people.

Solution By Uber
Uber noticed the above issue and came up with the solution – go with the cashless while
driving the cab through the Uber app. The cashless payment system was induced by Uber
in order to prevent the people who wanted to travel cashless.

16
Lessons Every Startup Can Learn from Uber

• Have Safeguards in Place to Avoid Scandals

While Uber has earned an impressive reputation over the past year, it has also faced criti-
cism over a few scandals. Some customers claim that drivers had cheated them out of money
or sexually assaulted them. Some of these stories have been confirmed, while others have
been thoroughly debunked – either way, they can still have negative implications for Uber’s
brand.

These types of scandals reflect poorly on any company’s brand image. For this reason, the
company – and other entrepreneurs who follow its lead – would be wise to put sufficient
safeguards in place to keep issues from arising and nullify any negative publicity that follows.

Mark Cuban once spoke of Travis, saying; “Travis’s biggest strength is that he will run through
a wall to accomplish his goals. Travis’s biggest weakness is that he will run through a wall to
accomplish his goals. That’s the best way to describe him.”

Key Takeaway: Be proactive about the scandals that could affect your organization and have
a plan for how you’ll handle any that arise. Now isn’t the time to hide your skeletons away
in the closet.

• Minimize Infrastructural Requirements

Startups inevitably face higher expenses as their businesses grow. That said, there are many
ways they can minimize their costs by keeping a reduced infrastructure in place.One of the
reasons that Uber has grown so quickly is that it doesn’t have the same overhead expenses
as traditional cab companies.Uber has been able to save money by hiring noncommercial
drivers.
Controlling expenses is a critical part of running a business, so strive to be as cost-efficient
as possible.

• Provide Competitive Compensatory Packages to Attract Workers

Since the company’s infrastructure is more limited, it doesn’t require the same amount of
manpower on hand. As a result, Uber can offer more flexible schedules to employees, which

17
 are attractive to people that need additional streams of income. Many Uber employees like
they idea that they can make money on the side while working a regular job.
Offering excellent compensation is a great way to attract high quality employees. Create a
compensation package that appeals to them and that distinguishes your business from your
competitors.

• Decentralize Decision making

Company executives can realistically manage most functions during a company’s initial stages
of growth. However, delegation becomes more and more important as the company pen-
etrates new markets and grows its subscriber base. Uber faced this challenge head on by
outsourcing more remedial decision making functions to local organizations as growth ac-
celerated.
To see this in action, consider that the company’s central headquarters in San Francisco still
accumulates data from all of the cities that Uber operates in and uses it to make more com-
petent decisions. However, this office has little involvement in most other aspects of the
company, such as hiring. Instead, Uber believes that local management has a better under-
standing of the measures that need to be taken to ensure services are provided efficiently
and that both customers and employees are satisfied with the experience.Empower local
managers to make crucial decisions.

• Keep it Simple
Contrary to popular belief, elegant business models are rarely the way to go with start ups.
More moving parts in a business model means that there are more ways for things to go
wrong. Subrah Iyar, the co founder of Moxtra and Webex, argues that the genius behind
Uber’s approach lies largely in its simplicity.

– Develop a clear vision for your business model in advance.

– Communicate procedures to everyone in the organization and provide sufficient train-
ing to incoming employees.
– Provide necessary internal controls to ensure the business operates in line with the
company’s vision.

18
 – Monitor customer feedback, regulatory changes and other external variables so the
business can adapt as needed.

• Leverage Word of Mouth Customers are more likely to trust feedback from their peers
than advertisements. A report from Nielsen shows that 84 percent of customers take action
from personal recommendations – the highest rating of any advertising method surveyed.
Uber encourages customers to share their personal experiences, because it recognizes that
doing so is one of the fastest ways for the company to grow.

Word of mouth is a core part of Uber’s marketing strategy and it’s played a large role in the
company’s success.

• Find Genuine Solutions to Real World Problems

Customers give their business to the companies that solve the problems they’re facing. Make
it your priority to provide genuine solutions to problems your competitors have overlooked.

• Be an Early Adopter
Being the first entrant into a new market is crucial. Uber was the first ride sharing company,
which allowed it to carve out a large share of the market. While Uber eventually faced com-
petition from other emerging ride-sharing providers like Lyft and SideCar, the company has
a stronger brand presence because it was the first to market. As a result, consumers will al-
most always think of Uber first when they think of ride-sharing companies – and that’s the
kind of brand recognition you can’t buy.
For this reason, there’s a significant benefit to entrepreneurs who take their ideas to market
as soon as possible.
You can gain a strong competitive edge by being the first company to market. Remember
the saying, “Ready, fire, aim.”

Uber’s Revenue Generation Model:

If you have ever travelled in a taxi, you might have paid the driver in cash at the end of your
journey. The cash collected by each journey is the only source of revenue for a traditional cab
company. Uber is no different. Neither does Uber have a different revenue model than the one
mentioned above nor it has any other source of revenue as of now. But just imagine 1 million
rides a day. It will help you calculate those big numbers that the company earns. Let’s dig a little

19
deeper to understand Uber’s source of income.

What has made them so successful is the fact that the revenue model is as unique as their busi-
ness model. It can be explained as:

• Different cab models to cater to everyone:

Uber has not limited itself to a particular segment of cars or to a particular segment of people.
There is Uber X, Uber Black for those who love to travel in a black car, Uber Taxi for those
looking for cost-efficient solutions and Uber SUV for those who want luxury.

• Surge Pricing Technology:

Variation in cab fares according to situation is an important aspect of their business model.
Whenever the demand increases, per mile prices are automatically increased. The new price
depends on the number of available drivers and the number of requests made by people who
want to travel. It has applied for a price surge technology patent in the US.

Figure 4: Uber Surge Pricing

• Other Uber rides:

Uber has come a long way from cabs. It now offers boats, helicopters as well as some other

20
 transportation means on demand. They recently launched a motorcycle-pickup service in
Paris, a delivery service in San Francisco, and an ice-cream-truck-delivery service in a few
cities too. However, these means are available in selected geographical locations but it has
led them to add new streams of revenue into its business model.

Salient Features of Uber

• A user can tap his smart phone and call a cab at his location or could also book a ride in
advance.

• One can have SMS, Email alerts, Notifications to Passengers.

• The customer can track the driver as he arrives to his location. The driver can also track the
exact location of the customer and reach his exact location.

• The payment procedure is handled by them. In some countries like India, they have even
started accepting cash payments which are paid directly to the driver. Its Automated gener-
ated e- receipts.

• Can get Travel History, has Multilingual support

Value Propositions

Customers:

• No need to wait for a taxi for long times.

• Free rides on certain occasions and discounts from time to time. Prices lesser than the nor-
mal taxi fares.

• Uber’s tag line says - Your personal driver. It lets customers travel in style.

• Fixed prices for common places like Airport etc.

Drivers:

• Additional source of income.

• Flexible working schedules. Can work part time or simply whenever they like.

• Easy payment procedure.

21
• Those who love to drive can earn money while pursuing their hobby.

• Uber pays drivers to be online, even if they don’t get any request.

22
 6
How and Why Uber became successful?
Uber’s business and revenue model just can’t be stated as complete if this widely asked question
about their successful journey is not answered. There were certain factors that led to Uber’s suc-
cess. Here’s a brief journey that Uber went through when it launched. Similar journey can be
followed by any start up which aims to make it as big as Uber.

• The problem with local Taxis:

Earlier, people had to stand on the street side and wave their hand in order to signal a taxi to
stop. The wait time, the inconvenience and high rates were a problem for everyone. Quite a
few taxis were available and drivers / taxi companies used to charge whatever they thought
was right. There was no control on prices and people were left with no other option. Apart
from this, the situation was worse during the peak hours as it was quite hard to find an empty
cab.

• The launch of Uber:

Uber recognized the ongoing problem in regard to booking a taxi and gave a technological
solution through a mobile app. The solution to book a cab by tapping a smart phone brought
a revolution in the taxi industry. The app was officially launched in 2010 and soon became
popular due to the value it provided to people.

• The early adopters:

It is quite difficult to market a newly launched product or service in any geographical area.
What gave it the edge is that it launched in San Francisco, a city which is home to tech savvy
people. The first drivers on the platform came through cold calling. Many of them were
professional drivers with other cab companies or were self employed as a taxi driver.

To get their first customers, they took to social media and other mass marketing means. It
offered discounts, free rides and rates that were too less as compared to other cab services in

23
 the city. The first customers were those who enthusiastically wanted to try the new service.
It offered rides from club venues to user’s doorstep so the party people were amazed. It
offered rides to the corporate sector who worked in offices helping them to save time.

• Word of Mouth advertising:

Whosoever took a ride in Uber was baffled by the first hand experience. This made the early
users to become regular customers and they also helped spread the name by word of mouth
advertising. This word of mouth advertising was one of the major driving force

• Main Growth opportunities tapped by Uber:

– Party people who go to clubs, parties or events.

– Business Travellers and Tourists.
– Cab at doorstep in bad weather conditions.
– City’s Nightlife.

24
 7
Funding
In total, Uber has raised $24.2 billion from 22 rounds of venture capital and private equity in-
vestors. The founders invested $200, 000 in seed money ¹ upon conception in 2009. In 2010,
Uber raised $1.25 million in additional funding. By the end of 2011, Uber had raised 4.5 million
in funding. In 2013, Google Ventures invested 58 million in the company based on a .4 billion
pre-money valuation. In December 2014, Chinese search engine Baidu made an investment in
Uber of an undisclosed amount. The deal also involved connecting Uber with Baidu’s mapping
apps. In January 2015, Uber raised $1.6 billion in convertible debt. In September 2015, Uber
raised another $1.2 billion, led by another investment by Baidu.
In 2016, Toyota made an undisclosed investment in Uber and looked into leasing options,
which could potentially aid Uber drivers financially, a move in response to the other partnerships
between Toyota’s and Uber’s counterparts. In June 2016, with plans to expand in the Middle East,
Uber received $3.5 billion from the Public Investment Fund of Saudi Arabia.[140] In July that
same year, Uber raised $1.15 billion in debt financing.
In January 2018, the company raised $1.25 billion in cash from an investor group including
SoftBank, Dragoneer Investment Group, and Sequoia Capital. The financing valued the com-
pany at $48 billion. On August 27, 2018, Toyota announced a partnership with Uber to bring
an on-demand autonomous ride-hailing service to market, a deal that included a $500 million
investment from Toyota in Uber at a $72 billion valuation.

¹Seed money, sometimes known as seed funding or seed capital, is a form of securities offering in which an investor invests capital
in a startup company in exchange for an equity stake in the company.

25
 8
Uber Revenue and Usage Statistics
Uber is hailed as the archetypal disruptive business, and has certainly played havoc with the taxi
industry in major cities across the world by tearing up the rule book. This disdain for the rule book
has, however seen it dogged by controversies throughout its existence. Though a raft of competi-
tors are gaining ground, it remains the dominant ride-hailing app across most of the world.

8.1 Key Uber Statistics

1. Uber is available in 65 countries and over 600 cities worldwide.

2. 15 million Uber trips are completed each day.

3. Well over 5 billion trips have been completed worldwide.

4. Figures vary, but Uber′ s market share of the US ride-hailing market is estimated at between
69% and 74%.

5. Uber revenue Q2² 2018 was $2.8 billion, an increase of 63% (down from 70% in Q1).

6. Q2 net loss was 91 million, following profit of $2.5 billion in Q1 (discounting sales to Grab
in Southeast Asia and Yandex in Russia, a $312 million loss).

7. Total venture capital raised by Uber stands at $24.2 billion.

8. Average Uber driver income is $364month.

9. 27% of US UberX drivers are female.

10. Chinese rival Didi Chuxing is the biggest international rival, valued at $56 billion.

Uber′ s biggest market is the US (with 41.8 million users in March 2018), though it is a truly global
enterprise with the exception of certain regions in which local business has been sold to regional
²A quarter refers to one-fourth of a year and is typically expressed as ”Q1” for the first quarter, ”Q2” for the second quarter, and so
forth. Most financial reporting and dividend payments are done on a quarterly basis.

26
operators.
The second-biggest Uber market is Brazil, in which 17 million were using the app in March 2018.
London, UK is the biggest European Uber market, with 3.5 million users. In India, there were
reportedly over 5 million weekly active riders as of August 2017.

8.2 Uber Demographics

US Uber users generally seem to mirror the population itself, being split evenly along gender and
income lines.
Usage is most concentrated among younger age groups, while there’s a relatively even split in
terms of urban and suburban users - as we might expect from a service that is only available in
urban hubs.

27
Figure 5: Average cost of 10km Uber ride around the world

28
 Figure 6: UBER US Demographics

Figure 7: UBER London Demographics

29
 9
Uber Finances
9.1 Financial Management:Introduction

Finance is the lifeline of any business and like most other resources, finance is always limited.
On the other hand, wants or demands are always unlimited. Therefore, it is important for a busi-
ness to manage its finances efficiently. Financial management refers to the strategic planning,
organizing, directing, and controlling of financial undertakings in an organization or an
institute to achieve organizational goals and objectives as we have learned in management by
objectives.
It also includes applying management principles to the financial assets of an organization, while
also playing an important part in fiscal management.

Figure 8: Three important aspects of financial management

Financial management is an ideal practice to control procurement of funds, utilization of funds,

accounting, payments, risk assessment and every other thing related to money.
Proper management of an organization’s finance provides quality fuel and regular service to en-
sure efficient functioning. If finances are not properly dealt with an organization will face barriers

30
that may have severe repercussions on its growth and development.
[3]

9.2 Elements of Financial Management

• Investment decisions includes investment in fixed assets . Investment in current assets are
also a part of investment decisions called as working capital decisions.

• Financial decisions - They relate to the raising of finance from various resources which will
depend upon decision on type of source, period of financing, cost of financing and the re-
turns thereby.

• Dividend decision - The finance manager has to take decision with regards to the net profit
distribution. Net profits are generally divided into two:

– Dividend for shareholders- Dividend and the rate of it has to be decided.

– Retained profits- Amount of retained profits has to be finalized which will depend upon
expansion and diversification plans of the enterprise. [4]

9.3 Financial Model of Uber

Figure 9: Uber net revenue, millions of USD

Uber gross revenue has been growing steadily since the beginning of 2017.

31
 Figure 10: Uber gross revenue

Uber is basically a transportation network company (TNC) offering services including peer-
to-peer ride sharing, ride service hailing, food delivery and a bicycle-sharing system which is the
basic source of income for the company.
The Uber app gives riders a predetermined cost of the ride before actually confirm the ride. Uber
uses a dynamic pricing model that is the prices for the same route vary based on the supply and
demand for rides at the time the ride is requested.

9.4 Financial results

In 2014, Uber reported a loss of 671 million on 495.3 million dollars of revenue.

In 2015, Uber’s revenue grew to an estimated 1.5 billion dollars.

In 2016, Uber reported a 2.8 billion loss.

In 2017, losses grew 60 percent to 4.5 billion.

In 2018, Uber reported a 1.8 billion loss.

32
 Figure 11: Uber’s net revenue and GAAP loss in 2014 and 2015 for 3Q’s

9.5 How does Uber make money and optimize it to make more profit?

• The company generates revenues primarily by charging clients for the rides and through
promotional offerings and partnerships involving third parties, although it also derives ad-
vertising income from its website.

• Clients request a ride with an app on their smart phone from their current location which
generates money as one has to download the app from plays store. Google play store and
Uber earn money through this.

• Drivers for this company use GPS mostly Google maps or similar navigational technol-
ogy to locate clients and determine the best route to retrieve these clients and deliver them
to their desired destinations which in turn generates revenue for Uber and would give a
share to navigation service provider and app developer.

• Real-time ride sharing makes use of seats that are not filled in vehicles, cutting down on the
cost of transportation and lowering the use of fuel in turn saving fuel and money.

• Driver payments and ride matching are instantaneously handled using an optimization
algorithm which can be similar to assignment problem algorithm that we have learnt,
which is a tool that lists all necessary information and organizes and sorts it accordingly to

33
 provide the most efficient use of time and fuel, as well as to make the ride as pleasant as
possible for the clients.

Figure 12: Fares of Uber, base price and prices for every mile, minute and cancellation fees for two types of
vehicles.

• In 2012, it initiated UberX, a program that began offering smaller vehicles at a reduced cost.
Uber Pool, a great endeavor for tackling heavy demand and the lesser number of available
rides for busy locations was launched to attract more customers who couldn’t afford luxury
vehicles or travelling singly in a cab, now could travel at a 65 percent less price.

• Uber institutes surge price fares that attract drivers and increase the company’s overall rev-
enue, servicing clients who are in need of transportation that is otherwise unavailable in
severe weathers and important holidays.

• The payment to be made by the client is systematized through an algorithmic procedure

which takes into consideration the factors of time taken, distance traversed and fuel used.
In fact, surge pricing also makes use of these algorithms.

• On bad weather days, hours of traffic congestion and on public holidays, when the demand
for cab rides is higher than their availability, Uber clients have to deal with price surges. The
company is totally transparent about this dynamic pricing strategy and informs the riders
beforehand if there’s an increase in the price of the cab.

34
9.6 Why is Uber in losses?

Figure 13: Uber core financials as of quarter 2 of 2018

• Competition from local companies as shown above like Ola adds up to excess expenditure
on advertisement and free trips to attract customers.

• It having a higher cost base than it does revenue generating capacity or operating costs greater
than its gross profit.

• Operating costs are much more than the revenue generated.

• Uber has been forced into perennially aggressive recruitment efforts, offering sign up bonuses
that can run well in excess of 1,000 dollars (on top of normal compensation) for new drivers
which has led to loss of a lot of money.

• Multiple management missteps have further hindered Uber’s performance, fueling growing
distrust from customers, drivers and regulatory agencies.

• Investments into self-driving trucks and bikes has led to lot of expenditure but minimum
income.

• Uber also spent 142 million dollars on promotions, paid drivers incentives, spent on re-
funds, and paid millions in taxes which exceeded the revenues or profit made.

35
 • We can analyze that this company actually failed in investment decisions of the financial
management because of which even after it’s Gross revenue getting increased year after year,
it is still in losses.

Figure 14: The comparison graph for net and gross revenue of Uber for the year 2018

9.7 Uber valuation

Its valuation has shot up over its years of operation, standing at a minuscule-seeming $350 million
in early 2012, shooting up to $18 billion two years later. By the end of that same year, 2014, this
had more than-doubled. With the exception of the Softbank re calibration, the value has been
on the up since. Its rocketing in value has led it to be labelled a ‘unicorn’ – that is a start up that
has achieved a valuation of over $1 billion. Technically, with a valuation of over $10 billion, Uber
now classes a ’decacorn’.

36
 Figure 15: Uber valuation history

Figure 16: Uber valuation compared to other ride-hailing businesses

37
 10
UBER Competitors
10.1 Uber vs. taxi usage

In New York, perhaps the home of the world’s most iconic taxis, Uber became the most popular
form of private hire transport in terms of rides per day in September 2017. Since then, bar a couple
of minor dips, it’s been in front - and continuing to pull away.
As of August 2018, 436,000 Uber rides took place per day, compared to 275,000 taxi rides, and
122,000 Lyft rides.

Figure 17: Uber vs. taxis vs. Lyft rides per day in New York

One of the reasons Uber is able to command such a lead is due to the considerably larger size of
its fleet. Around 63,000 Uber vehicles were available to New Yorkers in August 2018, compared
to 34,000 Lyft vehicles and a mere 16,000 yellow cabs.

10.2 Uber vs. Lyft vs. Grab vs. Didi Chuxing

Uber was the first mover in terms of ride-hailing apps. Chief among its rivals are Lyft, Grab, and
Didi Chuxing. The first operates solely in the US market (and a tiny part of Canada), while the

38
latter two operate in the lucrative Southeast Asian and Chinese markets respectively. Didi Chux-
ing controls 90% of the market in China.
While Uber’s key focus is on North American market, the global ride-hailing market is concen-
trated in Asia.
Uber controls 46% of the market in India - the world’s third-biggest.
Lyft is the only true direct rival in the US, with local operators Didi Chuxing and Grab operating
in markets in which Uber does not have a significant presence - in both cases because business
was sold to the local rival.

Figure 18: Uber vs Lyft vs Grab vs Didi Chuxing

User and driver ratings play a big part in the ride hailing experience. In this respect, Lyft can
claim the edge over Uber, with scores of 4.8 on average, compared to 4.4. A normal taxi ride is
likely to average a mere 4.0

39
 Figure 19: Comparison of costs of Uber with a indigenous company Ola(India)

Figure 20: Uber vs. Lyft rating by business travellers

10.3 Uber vs. Lyft drivers

In a survey of 1,200 drivers conducted in early 2018 found that over half of US ride-hailing app
drivers only used Uber - not too far under four times those who used only Lyft. One in five re-
ported using both.

40
Figure 21: Uber vs. Lyft rating by business travellers

41
 11
Criticism and subsequent changes in strate-
gies and policies
11.1 Driver criticism of classification of independent contractors

Unless otherwise required by law, TNC drivers are independent contractors and not employees.
This designation may affect taxation, work hours, and overtime benefits and lawsuits have been
filed by drivers alleging that they are entitled to the rights and remedies of being considered ”em-
ployees” under employment law. In response, TNCs say they provide ”flexible and independent
jobs” for drivers.
In O’Connor v. Uber Technologies, a lawsuit filed in the United States District Court for the
Northern District of California on August 16, 2013, Uber drivers pleaded that according to the
California Labor Code they should be classified as employees and receive reimbursement of busi-
ness expenses such as gas and vehicle maintenance costs. In March 2019, Uber agreed to pay $20
million to settle the case.
The Central London Employment tribunal ruled that Uber drivers are ”workers”, rather than self-
employed individuals, and are entitled to the minimum wage under the National Minimum Wage
Act 1998, paid holiday, and other normal worker entitlements.
In March 2018, the Federal Department of Economic Affairs, Education and Research of Switzer-
land, gave the legal opinion that under the conditions that bind drivers to Uber that they should
be classified as employees.

11.1.1 Driver criticism of compensation

Driver’s have complained that in some cases, after expenses, they earn less than minimum wage.
As a result, in some jurisdictions, such as New York City, drivers are guaranteed a minimum wage.

42
11.2 Misleading drivers of potential earnings

In January 2017, Uber agreed to pay $20 million to the US government to resolve accusations by
the Federal Trade Commission of having misled drivers about potential earnings.

11.3 Criticism for collecting fares during a taxi strike

In late January 2017, Uber was targeted by GrabYourWallet for collecting fares during a taxi strike
in New York City in protest of Trump travel ban Executive Order 13769. The Order had trig-
gered a taxi strike in New York City, to which Uber responded by removing surge pricing from
JFK airport, where Muslim refugees had been detained upon entry. Uber was also targeted be-
cause then-CEO Travis Kalanick joined an Economic Advisory Council with Donald Trump. A
social media campaign known as #deleteuber was formed in protest, resulting in approximately
200,000 users deleting the app. Uber added user account deletion to meet the resulting surge in
requests. Statements were e-mailed to former users who had deleted their accounts, asserting
that the company would assist refugees, and that CEO Kalanick joining the Council was not an
endorsement of President Trump. On February 2, 2017, Kalanick resigned from the business
advisory council.

11.4 Aggressive strategy for dealing with regulators

When Uber was led by Travis Kalanick, Uber took an aggressive strategy in dealing with obstacles,
including regulators. In 2014, Kalanick said ”You have to have what I call principled confronta-
tion.” Uber’s strategy was generally to commence operations in a city, then, if it faced regulatory
opposition, Uber mobilized public support for its service and mounted a political campaign, sup-
ported by lobbyists, to change regulations.
In 2014, while in the midst of a regulatory battle, Portland, Oregon’s transportation commis-
sioner called Uber management ”a bunch of thugs”.
In November 2017, CEO Dara Khosrowshahi dropped the ”win at all costs” strategy and im-
plemented new values for the company, including ”we do the right thing”.

11.5 Allegations of inadequate background checks and vetting of

drivers

Concerns regarding Uber’s background checks were raised after reports of sexual abuse of pas-
sengers by Uber drivers. In November 2017, The Colorado Public Utilities Commission fined

43
Uber $8.9 million after discovering that 57 drivers in the state had violations in their background
checks. The fine amount equaled $2, 500 per day that an unqualified driver worked.

11.6 Settlement with victims

In August 2018, Uber agreed to pay a total of $7 million to 480 workers to settle claims of gender
discrimination, harassment and hostile work environment.

44
 12
SWOT Analysis

12.1 Strengths:

1. 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 (Dogtieve 2018). First mover
advantage has given it an opportunity to capture the biggest share of the ride sharing indus-
try.

2. Big brand name and awareness :

Uber has become the world’s biggest ride sharing service operating in more than 83 coun-
tries and 674 cities globally. As of 2018, the company commands 73% share of the market
in USA (Statista 2018). 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 Lyft.

45
 Another 70% surveyed, who hadn’t used the company’s services stated they were familiar
with Uber brand name (Kulkarni 2017).

3. Adaptive :

Uber is also known to adapt very well to business conditions. Because of its international
exposure, Uber faces various problems in various regions. Uber is known to be a smart mar-
keter and has adapted very well wherever it has established its business.

4. Convenience, ease of use and low costs :

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 driver 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
(Kulkarni 2017).

5. Highly diversified :

Uber has diversified its services through offering alternative transport modes including tran-
sit 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 deliv-
ery and short haul services, helping it grow market share, revenue and profits.

6. Dynamic Pricing strategy :

Uber has adopted the dynamic pricing strategy which works on the demand supply prin-
ciple 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.

46
12.2 Weaknesses:

1. Sexual harassment accusations :

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 (O’Brien et al., 2018). As the most valuable pri-
vately 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 Lyft. Similar incidences have been reported in India where a rape charge
against an Uber driver in New Delhi led to its temporary ban (Gordon 2015).

2. Highly dependent on Internet :

Uber is heavily dependent on internet connectivity to expand and develop itself in devel-
oped countries. Thus, it is facing problems in developing and emerging countries where
internet is slow or poor.

3. Falling market shares :

As of 2017, Uber’s market share fell from 84% to 74% while Lyft’s grew from 20% to 22%
mainly because of the various scandals and the delete Uber campaign (Bhuiyan 2017).

4. Highly Dependent on Manpower :

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.

5. 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 updated.

6. Low barriers to entry :

Uber is in an industry where the barriers to entry are very low so it will face competition

47
 in multiple fronts. Already in India, Meru, Ola and others are giving tough competition to
Uber.

12.3 Opportunities :

1. Dissatisfaction with unorganized 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 are known to be rude and do not comply.

2. 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 en-
large its footprint over the country.

3. Partnership with hospitality brands :

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

4. 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.

5. 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 updated.

6. Alternate transport :

Uber has launched ’Uber chopper’ in various countries and can look for other transport
medium catering local needs. In India, Uber can launch Bus aggregator system.

48
12.4 Threats :

1. 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.

2. 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.

3. 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.

4. Revolt from unorganized 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.

5. Competition from Lyft :

While Uber has been enjoying superior growth through technological innovation which
came at the cost of traditional taxi companies’ business, things seem to have started chang-
ing with the emergence of Lyft.

49
 13
PESTLE Analysis

13.1 Political factors :

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 com-
pany 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. As a result,
Uber has been banned in a number of countries and such as Bulgaria, Hong Kong and Germany
and certain cities such as London and Brno.

50
13.2 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 and unem-
ployment 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 in-
come 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 fi-
nancial point of view.

13.3 Social factors :

Customers of Uber enjoy its 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.

13.4 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.

51
13.5 Legal factors :

Traditional taxi companies have to buy expensive licenses for exclusive rights to offer street-hail
trips, whereas under Uber’s new rules, its drivers act as independent contractors rather than em-
ployees, so there are significant risks to both riders and drivers to settle any disputes should ac-
cidents occur. They are not entitled to the minimum wage, paid vacations or health insurance
(Petropoulos 2016). Thus, the company undercut prices due to lower overheads (e.g. admin-
istrative 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 licens-
ing that could derail its regional expansion plans (BMI 2015a).

13.6 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 re-
ducing 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.

52
 14
Further Extensions of Uber,Beyond Ride-
sharing
Uber offers various levels of service like UberASSIST which provides additional assistance to se-
nior citizens and passengers with a physical disability, but cannot transport a non-folding wheelchair
(though there are UberWAV for wheelchair-accessible vehicles). Also UberBOAT, UberBlack,
UberGO and many other services there.
Apart from these ride service, Uber has following subsidiaries:

1. Uber Eats
In August 2014, Uber launched UberEATS, a food delivery service. Uber Eats market share
grew from 3%to 24% in 2018.

Figure 22: Uber Eats

2. Uber Freight
Uber Freight is a free app that matches carriers with shippers. Shippers tap a button to in-
stantly book the loads they want to haul. And thanks to upfront pricing, carriers always know
how much they’ll get paid.

53
 Figure 23: Uber Freight

3. Uber Health
Uber Health is a HIPAA-compliant technology solution for health care organizations that
leverages the ride hailing power of the Uber platform. The web-based dashboard allows
hospitals and other health care professionals to request, manage, and pay for rides for others,
at scale.
Healthcare organizations are using Uber Health to help get people to and from the care they
need, and to get staff to and from work.

Figure 24: Uber Health

4. Uber for Business

Whether it’s employee travel or customer rides, Uber for Business gives you an easy way to
manage your transportation needs. Built for work, it offers a clear view into employee trip
activity with automated billing, expensing, and reporting.

Figure 25: Uber Business

54
5. JUMP bikes
One can use Uber app to rent an easy-to-use electric assist bike provided by JUMP. Uber
Bike is currently available in San Francisco and Washington, DC.

Figure 26: Uber Bikes

55
 15
Future Plans : Changing the future of
autonomous transportation technology
1. The road to self-driving vehicles
This innovative team is dedicated to building safe, reliable, and cost-effective self-driving
technologies. With teams in Detroit, Pittsburgh, San Francisco, Tempe, and Toronto, the
group is bringing self-driving cars and freight trucks to the Uber network.

Figure 27: Uber Self-Driving Vehicles

2. UBER ELEVATE : The future of urban air transport

Uber is developing shared air transportation—planned for 2023—between suburbs and
cities, and ultimately within cities. We’re working with our Elevate Network partners to
launch fleets of small, electric VTOL (vertical takeoff and landing) aircraft in Dallas, Los
Angeles.

Figure 28: Uber ELEVATE

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

[2] Uber App Features

http : //www.allrideapps.com/taxi − app − feature − list/

[3] https://www.managementstudyguide.com/financial-management.htm

[4] https://www.toppr.com/guides/business-environment/business-functions/financial-
management/

[5] Wikipedia
https : //en.wikipedia.or/wiki/Uber

[6] Uber Statistics

http://www.businessofapps.com/data/uber-statistics/

[7] SWOT and Pestel Analysis

https://pestleanalysis.com/pestle-analysis-ub

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