Case Study Fact Sheet

Uber Pricing Strategies and Marketing Communications

11/19/2020
Sydney Green

Background
 Uber was founded in 2009 in San Francisco, California by Garret Camp. Over New
Year’s Eve, he spent $800 hiring a private driver for him and his friends. He realized
sharing the cost with people is much more affordable, which sparked his idea of Uber. It
started out as a private car service for top executives and progressed into a service
company for majority of the world population.

Issues/decision alternatives facing a firm

 Uber is facing trust and safety issues of the passengers riding with the driver. All drivers
are screened for any records to ensure the safety of the customers.
 Uber is also facing legal issues regarding insurance coverage for accidents and regulatory
laws of legal taxi operations.
 Surge pricing

Competitive environment/issues
 Lyft became Uber’s biggest competitor. There are also a variety of other competitors in
the market; Hailo, Sidecar, taxi, car-pooling and rental cars.

Current marketing strategy

 Offer rides to areas where taxis have no presence or where taxis are too costly.
 Uber attracts its customers with cost awareness perks they can’t find anywhere else.

Consumer behavior, trends

 Customers think Uber is remarkably convenient and it’s obvious been a common trend in
the younger generation. I think it very smart and wise of people my age to use Uber when
commuting home after a night out. I also think it is very convenient for travel purposes,
not having to worry how to get to and from places.
The marketing mix
 Uber uses the 4 P’s of marketing consist of product, place, price and promotion.
Product – Uber is a service company; it doesn’t sell products. Place – given Uber is
active all around the world, they do not have too many offices. Also, the nature of the
business doesn’t take place in a designated location. Price – determined by a base rate,
rate for estimated time and distance and demand in the area. Promotion – Uber relies
heavily on word of mouth to publicly gain market share. The offering of free rides
worked very well to spark of the interest of people to start using their service.
The value proposition(s)
 From a customer standpoint, no longer need to wait for a taxi for a long period of time.
Prices are less than that of taxi fares and offer free rides/discounts from time to time.
 For the Uber drives, it provides a very flexible schedule where they can work part time or
whenever they want. It provides them with an additional source of income through and
easy payment method.

Facts in the case that represent constraints/hurdles

 The negative comments about surge pricing for Uber did not sit well with people. The
fares would increase as much as seven or eight times the normal price!
 Facing legal hurdles whether Uber is deemed a transportation service or not.
 Safety issues involving drivers arrested for assaults, racial comments, drunk drivers, or
customer complaints about drivers taking longer routes.