Course Title: Marketing Management

Course Code: 04145224

Program: MBA
Summer, 2023

Date: 11/11/2023

Submitted To:
Mr. Habib Anwar Pasha

REPORT ON;
UBER MARKETING MANAGEMENT
BUSINESS ENVIRONMENT

Submitted By:

1. Shahariar Ridoy 2. S. M. Muktadir

ID: 234600004 ID: 232600019
Summer, 2023 Summer, 2023

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Executive Summary
Introduction
Uber’s sharing-economy business model dealt a blow to the traditional taxi industry. It has
changed the way people live by introduction a smartphone application to get on-demand
transportation system by connecting passengers with drivers via its smartphone application.

Problem
Uber is currently facing a number of issues as expected from a unicorn start-up. some of the
main challenges Uber is facing are;
1. Lack of focus with its growth plan. Uber is trying to take over the transportation industry
at once by being solution greedy. As it solving the car-sharing problem which is its core,
it is trying to solve both the air and water transportation challenges as well and not
leaving the massive investment it has poured into self-driving car technology. These
actions put its financial statement in the red zone and recorded a loss of over 5billion
dollars in the first quarter of 2019
2. Uber’s untimely inaction to solve some of the issues raised by its drivers on it platform
might cause a big problem for it later down the line. It hasn’t been listening enough to
some of the complaints by its drivers to reach out to solve their problems

Recommendations
Here are a few recommendations for Uber to consider and
1. Uber should focus on being a profitable company first with its car-sharing business which
is its primary business before trying to solve other transportation industry’s problems.
This could derail the company from. Achieving its full potential if the investor decides to
call it a quiet for whatever reason. Uber can easily find growth in the emerging car-
sharing business and become profitable
2. Uber should be more proactive and empathetic enough by listening to solve some of
its drivers complains before the regulator’s steps in and create laws that could jeopardize
its business model and ultimately affect its bottom line.

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Table of Contents
1. Introduction. ............................................................................................................. 4
2. Marketing Mix Analysis......................................................................................5
2.1 Product. ............................................................................................................. 5
2.2 Price. ...................................................................................................................5
2.3 Place. ................................................................................................................. 6
2.4 Promotion. .............................................................................................................. 6
3. SWOT Analysis… ................................................................................................ 7
3.1 Strength. ................................................................................................................. 7
3.2 Weakness. .......................................................................................................... 8
3.3 Opportunity. .............................................................................................................9
3.4 Threat. ...................................................................................................................... 9
4. PESTEL Analysis................................................................................................. 10
4.1. Political. ................................................................................................................. 10
4.2 Economy. .......................................................................................................... 10
4.3 Social. ................................................................................................................ 11
4.4 Legal........................................................................................................................ 11
4.5 Environment. .......................................................................................................... 11
5. Emerging Factor Affecting Uber. ..................................................................... 12
6. Recommendations............................................................................................. 12
7. Conclusion. ......................................................................................................... 13
8. Bibliography. ...................................................................................................... 14

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 1. Introduction
The traditional taxi transportation industry was disrupted in 2010 by an unknown
company called Uber. It disrupted the market with a new business model called
sharing economy. Uber Inc is an online marketplace for ride-sharing. It was
founded in 2010 and went public in 2019. Uber connects passengers looking for
car sharing with drivers via its mobile application platform (Uber.com).

This report serves to examine Uber’s marketing and business environment. It will
narrowly examine one aspect of Uber’s car-sharing business which is its primary
business. Uber’s mission is to create opportunity through movement (Uber.com).
Uber's CEO, Dara, testified to three key components that made Uber a hugely
successful start-up which is the global booming of smartphones, the invention of
smartphone app stores and people's desire for on-demand work (Dara
Khosrowshahi, 2019). It's currently working on some future projects such as
self-driving technology and urban air transport so as to help people in the
hospitality and healthcare industries to make transportation seamlessly (Uber,
n.d.)

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 2. Marketing Mix(4Ps)
A brief description of Uber’s marketing mix shows how it has positioned itself to
interpret its mission by creating opportunity through movement

2.1 Product
Uber’s main product is its mobile application for its two-sided platform connecting
drivers and users with its different services such as UberPool where a user can
share ride with other people and while UberGO and UberX offer the possibility of a
single user to order and ride the car alone without sharing it with anyone. Also,
there is UberTaxi that allows users to book a ride for a whole day to travel to long
distance. There are some other services that are available in some countries such
as UberRUSH, UberFreight and UberEats. There are also options to track via GPS
and share your ride with loved ones and as well as wifi service in some part of the
world according to the peculiarity of the market (Uber.com).

2.2 Pricing

Uber’s mobile application is absolutely free to download from the Google play
store and Apple store but it comes at a cost to use any of its services for
movements, via its application. Uber uses an algorithm called dynamic pricing to
adjust its pricing based on time of the day, distance, traffic, route and demands at
that particular moment (Uber.com).

on the other hand, Uber uses a penetration pricing strategy to acquire the majority
of its users. it gives a free ride to first-time users and gives out free rides for
referrals as well. The free ride is part of its customer’s acquisition cost.

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 Figure 1: Fares of Uber, base price and prices for every mile, minute and
cancellation fees for two types of vehicles.

2.3 Place

Uber’s presence is in 40+ countries and 600+ cities (Statista, 2019). It started from
California in the United States and then ran a successful experiment in Paris for its
international market lunch in 2011. Ever since then, its growth has been explosive
and rapid. Uber primarily operates vis smartphone mobile application from Google
Playstore for android users and on Apple store for IOS users. There is also a
possibility of using Uber via a web. There are Uber help desks in some Airports and
Malls. User mode of entering a city is based on development, infrastructure and
population.

2.4 Promotion

Uber relied heavily on word of mouth through its referral-based marketing

especially in its early days to penetrate the market. It uses this to build the
network effect on its platform. The increasing number of users and driversthat join
the platform make it more valuable to both players on the platform and hence
create a huge barrier of entry for a new entrant. Uber also uses out of home
advertising and as well Television ads to promote its brand.

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 3. SWOT Analysis

Strengths Opportunities
● It is a pioneer and market ● New technology: self-driving
leader in its category. car
● Uber has a strong network ● Finding growth in emerging
effect markets
● It has strong platform ● Inefficiencies in the Taxi market
governance procedures for its around pricing and waiting
users. period
● it has a low operating cost.

Weaknesses
● Its overreliance on the Drivers
on its platform to make its
service plausible
● Broken and weak work culture
● Overreliance on internet
● Overreliance on data for
running smooth oper
Threats
● Government policy
● Overreliance on customer’s data
● Taxi union association
● Bad customer service
experience with its drivers

Figure 2; Uber SWOT Analysis Quadrant

3.1 Strengths

● It is a pioneer and market leader in its category. Uber brand is synonymous

to the sharing economy business model. Hence, a strong brand and good
network effect.
● Uber has a strong network effect. The number of users on both sides of its
platform makes the platform so valuable and creates a strong barrier of
entry for new users. The gap between Uber and its closest competitor
(Lyft)is so huge because of the same reason
● it has strong governance procedures for its users. The drivers and users
have a set of rules they must abide with on the platform. the drivers on the
platform have to go through some rigorous test be they can be allowed to
join the platform
● it has a low operation cost. Uber doesn’t own any of the cars on its platform
nor employs any driver on its platform on a full-time basis but rather as a
contractor.

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 Figure 3: Uber United States Market Share

3.2 Weaknesses:

● Uber’s overreliance on the drivers on its platform to make its service

plausible could be a catastrophe if they decide to boycott its service for
whatever reason. so, attention needs to be paid to how it treats its
driverson the platform. There was a recent protest from the drivers’ side
about some of the unfavorable treatment received from Uber in recent
times.

● Uber’s culture has come under scrutiny with the way it treats women at its
workplace. Several allegations were made by some women in the company
against some top executives to low-level staff about the behavior of men
towards women in the company. This painted the company in a bad image
that it forces its founder Travis out of the company as the CEO.

● it overreliance on customer’s data to run a smooth operation could be

devastating if the government should make further privacy law concerning
customer’s data protection by making it difficult for technology companies
to harvest and use those data.
3.3 Opportunities

● The emergence of new technology in the transportation industry with

self-driving car bound to be a great opportunity for Uber. This will help
Uber to mitigate the effect of problems that might come from dealing with
drivers on its platform. this is a classic example of how Artificial Intelligence
will take over from human being. The research and experiments are still in

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 the infant stage. This could be deployed in some of the advanced cities
where Uber has a presence.

● Also, the emerging market presents a great opportunity for Uber to find
growth. Most of the transportation system in the emerging markets are
inefficient compared to how transportation is being run in advance
countries.

● Moreover, the inefficiency in the traditional Taxi industry is a good

opportunity to explore and this is why Uber was started in the first place.
Uber was started to solve the problem of inadequate pricing being charged
by the Taxi industry and the long waiting time for passengers to get a Taxi.

3.4 Threats

● Government policies and regulations could pose a threat to Uber’s

operations especially in Europe where technology companies are being
regulated with the data privacy laws. Regulating how companies should
collect and use customer’s data. this could limit its ability in some ways. in
recent times, there have been problems with some local authorities in some
cities with licencing. this is a great threat to its operations.

● Moreso, it overreliance reliance on internet connection could be devasting

for its operations if anything should go wrong to any of the internet service
providers. if perhaps internet connection in a country were cut off for
whatever reason, it is going to have a massive impact on its operations and
thereby affect its revenue.

● Legal cases against Uber from its drivers and trade union could be
devastating. Trade union and association requests on Uber could be
devastating.

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 4. PESTLE

4. 1 Political

Due to its nature of its business model, Uber has generated controversies recently
from its drivers, due to the low margins they are making on its platform. This spark
a new law called California law, which states, Uber should treat its drivers like and
employees rather than as contractors which will definitely raise its operating cost
and thereby eats into its profits.

The Taxi Industry has recently started a protest about wanting each Uber driver to
get the same Taxi permit they have. This has prompted local authorities to look
into the effect of Uber’s business model in their communities. Thereby causing new
laws to regulate the ride-sharing company. Uber’s license has recently been
revoked in some cities thereby causing a disruption in its operations.

4.2 Economic

Uber’s sharing business model is a new dynamic to how business is being run. It
affords people to work independently on a part-time basis. and therefore, brings
more people into employment. it enters into partnership with some car dealers
and commercial lenders to creates some loan facilities for drivers to buy and own a
car after they have finished paying for it in some countries especially in the
emerging market. And while some own cars and employ drivers to drive the car for
the sake of making money from the new business model. It is clear that there are
layers of opportunities created from sharing economy business model which Uber
happens to be the leader in that front.

Uber also forces competition in the Taxi industry making the traditional taxi
industry to be more competitive in their offering my reducing their fees and
extorting users, making them be more professional and cut down on their lateness.

Economic Development Research Group released a study on Uber's economic

impact in the United States. the following statistics were culled from the report on
Uber.com

● Uber’s platform supports $17 billion dollars of gross domestic product in

the U.S. per year over the study period.
● The net economic value-add to drivers is $5.7 billion annually. Schedule
flexibility is the most commonly reported amenity benefit for drivers. 80%
of drivers cite the importance of schedule flexibility that the Uber app
offers.

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 ● Nearly a quarter (23%) of drivers nationwide were unemployed prior to
driving with Uber.
● Overall, 11.6% of Uber trips in the United States are taken by out-of-town
visitors. And 26.7% of visitors report spending more during their trip
because Uber enabled them to visit additional locations.
● 1 in 10 trips connects to a bus or rail line, according to riders.
● Another 14% of Uber trips in the United States allowed riders to visit
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destinations they could not access without Uber (Uber.com 2018)

4.3 Social

Uber’s disruption to the traditional Taxi industry is in itself social change to many
people. It alters the way we commute to work and makes it something of social
status to some sets of people, especially the working class. while on the other hand,
its reputation was recently attacked from allegations and offences such as
unauthorized driver using its platform, The California law et al.

4. 4 Technology

The Internet has made it possible to be able to scale its business model with ease.
its mobile application that is primarily used for running the service wouldn’t have
been possible without the internet connectivity enabled to connect passengers
with drivers on its platform.

Artificial intelligence (AI) is another powerful technology that is being used by

Uberfor running smooth and effective service. AI is used for its dynamic pricing
algorithm. it determines. Also, Uber is currently using AI to power its self-driving
car that is currently in the testing phase.

4. 5 Legal

The sharing-economy business model is a new phenomenon to deal with for

government and regulators and hence they move to put regulations in the market.
This has recently sparked a law called California law where Uber was compelled to
treat its drivers as employees whereby Uber has to cater for them.

Uber was fined in France over illegal driving and its license was revoked in the UK
over allowing the unauthorized driver to continue using its platform.

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4.6 Environment
Uber is not left out in the sustainability topic. It has introduced sustainable efficient
cars in some advanced countries like Germany where users are giving the option of
ordering a sustainable powered car called Uber Green.

4. Emerging Issue Affecting Uber

Uber lack of focus on its path to profitability has been its biggest issue. it has
continued to bleed money without making a profit since its inception. It reported
over $5billion loss in the first quarter of 2019. Even though, the financial market is
still backing it because of the expectation that it would make a profit soon. Uber
strategy has been to keep growing its market share in the transportation industry
by lunching different similar service along the verticals in some markets and while
the financial market is still backing it but this could easily weary the investors at
some points. Uber is being solution greedy. It wants to capture all the possible
technology solution to different forms of transportation that exist.

5. Recommendation
Uber should focus on trying to be a profitable gaint leader and reconsider its
expansion plan by doing it in phases pending the time its honeymoon with the
financial market is over. it should focus on solving the right problem rather trying
to be everywhere. Like Google, over 70% of its revenue is from advertising which is
AdWords (Statista, 2018). Uber shouldn’t be too bothered about other players
capturing the other segments of the transportation industry such as air and water
but should continue its investment in those segments in a more conservative way.
It should try to solidify its position not just as a market leader in the technology
transportation Industry but a formidable and profitable company. Even though its
brand asset and network effect make it formidable but its financial statement makes
it more venerable with any serious new entrant with strategic assets,
capability and huge war chest such as Amazon, Apple, Google et al. If Uber can
maintain positive balance sheet, it could easily acquire other perceived small
competitors to strengthen its empire.

furthermore, localization should be parts of its mantra. It should be opened to treat

each country with its transportation needs rather than just using one size fits all
approach based on its classifications. Some of the emerging market should be
Uber’s focus because of their transportation challenges. It failed to quickly capture
India’s ride-sharing market to an Indigenous local rival called Ola who has about
60% of the market share. Failure to do this will breed competition from some of
the locals who will ultimately solve the right problem. Uber would have
established the sharing-economy ecosystem in the emerging market but would fail
to solve the right problem. it should focus on solving the right problem. it can’t be
solution greedy.

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Uber should be proactive and be at the forefront of some of the issues that could
arm its operations especially some of the topics that have surfaced in recent times.
Uber should try to start the conversation on these issues rather than wait for
government /regulators to step into some of these issues. Starting the
conversation and trying to solve some of these issues in a diplomatic way and this
will make it brand look responsible and listening. it will show empathy and the
aggrieved parties will most likely want to sit and resolve the issue with Uber rather
than wait for regulators to come up with laws or lawsuits that could literarily
destroy its business overnight. Fighting with regulators could be a distraction it
might want to avoid it especially at this stage of its business lifecycle. Microsoft’s
anti-trust’s fight in the USA was a big distraction for it. It makes them failed to see
some of the early opportunities in the internet search era. Microsoft misses out on
search advertising, system networking, social media etc. (Gates, 2019).

Moreover, Uber should step up its customer service to its drivers so as to avoid
them forming a Union membership based whereby they can present their case as
one in a strong voice. If that should happen, their demands will be endless and if
they should realise the amount of power they command on the platform. Uber
should do everything possible to make sure that they are not one and try to be on
the front foot their customer’s concerns. Can you imagine Amazon’s marketplace
sellers forming union on Amazon. It would be so devastating.

6. Conclusion
Uber has a lot of potential to solve humongous problem in the transportation
industry with technology. but based on careful analysis of Uber’s marketing and
business environment with how its struggling to mitigate some issues. Uber should
engage in tactical empathy to solve some of its problems on it platform. It need to
listening well and quickly come up with solutions that can alleviate these
problems. it is better to be the driver of how these problems are solve rather than
wait for external bodies such as regulators/ courts to pass a law on its business
that could have serious consequence. Uber should try to become a profitable
company and expand from them. It should take a second look at its expansion plan
by focusing on some high impact emerging economy to find growth.

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7. References
● Dara Khosrowshahi, 2019. A letter from our CEO. [Online]
Available at:
https://investor.uber.com/a-letter-from-our-ceo/?_ga=2.95663637.8635
48174.1579355789-1976625463.1578817902

● Uber, n.d. About us. [Online]

Available at: https://www.uber.com/us/en/about/
[Accessed 19 January 2020].

● Uber Technologies, Inc. [Online]

Available at:
https://en.wikipedia.org/wiki/Uber

● The History of Uber [ Online]

Available at:
https://www.investopedia.com/articles/personalfinance/111015/story-uber.asp

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