Uber’s

Case Study GROUP 13

• -AAKRITI MABSPG23001
• -SHIVANG MABSPG23010
• -SHEELA MABSPG23039
• -KHUSHIT MABSPG23022
• -NIKUNJ MABSPG23030
• -ROHIT MABSPG23056
• -YASHARTH MABSPG23047
Introduction

• Founder: Travis Kalanick & Garrette Camp

• First launched in iPhone
• Help to tackle the taxi issues in San Francisco
• Test run was conducted in New York in 2010
• Officially launched in San Fran- cisco on May 31, 2010
• In December 2011, they came up with Surge pricing model
QUESTION 1

How do you describe Uber’s business model, strategy? State its key elements of its value
proposition its profit formula and its approach to compete in marketplace.

Sharing Economy Model
• It facilitate the utilization of
resources through its
platform w/o owning
ownership of vehicles
Business Model
Technology Platform
Classification
• Uber positioned itself
primarily as a technology
company, providing a
platform connecting riders
and drivers rather than
offering transportation
services.
Independent Contractor
Model for Drivers
• Uber's drivers were
classified as independent
contractors, not employees,
allowing Uber to lessen
liability for drivers' actions,
evade certain tax
obligations, and bypass
employee benefits.
 Convenience

• One tap ride book

• 24/7
• Estimate Fairs
• Cashless

Diverse Service option

Value • Uber Taxi-normal licensed taxicabs
Proposition •
•
Carpooling services (Uber Pool)
Uber Rush (package delivery)
• Uber Essentials (online ordering)
• Uber Garage (partnership with local taxicab drivers)

Safety

• Real-time tracking Driver information

• Background checks
 Profit formula

Uber calculates fares based on

Uber had developed an Users notified when prices
the estimated length of the trip,
algorithm to surge price levels surged, and Uber applied for a
factoring in variable costs based
during times of high demand. patent for surge pricing.
on time and distance traveled.

• The specific formula used is: ((base fare + time rate + distance rate) * surge
multiplier) + tolls and other fees.

• Uber keeps 20-25% of total fares as profit

• Remaining 75% kept by the Drivers
• If surge pricing applies in your city when demand increases in a
specific area, that neighborhood will change color. The colored
areas of the map will range from light orange to dark red.
 Launch: Taking first steps with influencer
marketing
For its Rider Zero campaign, Uber approached
influential Indians, who exclusively tried out the
service before reporting about it to their big following
Its approach across social media channels. This resulted in Uber
being the talk of the town before even launching.
to competing
in the Build up: Referral marketing / word-of-mouth
Instead of spending their budget on TV, billboards or
Marketplace Facebook ads, Uber chose to invest in referral
marketing, tailored to the Indian market, where taxi
and rikshaw transportation is a necessity of everyday
life, especially for professionals. The Office Hero
campaign gave away rides with generous discounts or
even for free, generating a huge wave of referrals.
Discounts, festivals and new products
India has a rich festival tradition, which Uber exploited for its
referral marketing by offering free rides for Mother’s Day,
delivering colors for the popular Holi festival or discounted
transportation to and from Cricket matches. They always took into
account regional and even local differences, even resulting in the
introduction of an Uber auto rickshaw.

Strategic partnerships
Uber also managed to close smart partnerships with industry
relevant apps such as restaurant site Zomato, successful Indian
ecommerce provider Paytm, Spotify or online box office
BookMyShow. They enhanced the newcomer’s widespread,
contextual presence, sustaining the growth of its user base.
QUESTION 2
Describe competition in ridesharing industry. What leverage do buyers and sellers get in ride
sharing industry

Competition in the ridesharing industry, particularly for companies like Uber, is intense and dynamic. Several key
factors shape the competitive landscape

1. Market Saturation:
- Widely adopted services.
- Multiple companies in the same areas.

2. Price Wars:
- Significant influence on consumer choice.
- Frequent changes in pricing strategies.

3. Innovation and Technology:

- Heavy investment in user-friendly apps.
- Development of navigation algorithms.
- Exploration of emerging technologies (e.g., autonomous vehicles).
4. Driver and Rider Incentives:
- Bonuses for drivers completing specific trips.
- Discounts and promotions for riders during peak hours.

5. Regulatory Challenges:
- Varying regulations in different regions.
- Balance between compliance and advocating for favourable changes.

Major Competitors

• Lyft
• Didi
• Grab
• Ola
• Gett
 Leverages that buyer & Seller receive

Buyers (Riders): Suppliers (Drivers)

Price Sensitivity: Flexible Work Arrangements:

• High sensitivity to pricing, promotions, and • Enjoy flexible work schedules.
discounts.
• Freedom to choose working hours and
• Ability to switch between ridesharing
conditions.
platforms for better value.
Switching Costs:
• Low switching costs for riders. Earnings Potential:
• Easy download of alternative apps, • Higher earnings during peak demand.
increasing bargaining power. • Surge pricing and bonuses motivate drivers.
Rating System: Driver Incentives:
• Influence through rating drivers.
• Various incentives to attract and retain
• Low ratings affect a driver's future trip
drivers.
Encourages positive driver behaviour.
 FIVE FORCE MODEL

Using Porter's Five Forces model, Uber may analyse the following competitive forces that it faced in 2016:

1. Potential of new entrants into the industry:

• Moderate: Uber had already built a strong brand presence and a sizable network of drivers and passengers, but
the ride-sharing industry indicated potential for new players due to low barriers to entry in terms of technology and
access to drivers. New laws or modifications to the sector might, nonetheless, have an impact on this dynamic.

2. Bargaining Power of Suppliers (Drivers):

• Moderate to High: Because Uber drivers could operate on numerous platforms, they had some influence. Uber
has to strike a compromise between its own profitability and the happiness of its drivers, keeping drivers interested
with bonuses and incentives.
3. Bargaining Power of Buyers (Riders):
• High: In addition to Uber, riders had access to Lyft and conventional taxis. Because there were so
many options, passengers had a lot of control over what they could decide between in terms of cost,
ease of use, and level of service.

4. The Risk of Replacing:

• Moderate: Uber may be replaced by conventional taxis and other ride-sharing services. Uber's
worldwide reach and strong brand helped it somewhat offset the slight danger posed by the
emergence of competitors like Lyft and regional ride-sharing services.
5. Competition in the Industry:
• High: Uber faced fierce competition in the ride-sharing business from other businesses, particularly
Lyft in the US and regional operators in other foreign markets. This competition resulted in ongoing
pricing wars, marketing campaigns, and technological advancements aimed at gaining market
dominance.Uber maintained its market domination and competitive edge by focusing on aggressive
growth, technology innovation, and strategic alliances in reaction to these challenges.
QUESTION 3
• Does uber operates as a socially responsible business ?Assess components of uber corporate
social responsibility?

Uber emerged as one of the controversial corporate entities that prominently influence the effect of corporate social
responsibility (CSR). Despite its leading position in the transport and logistic industry globally, researchers argue
that there is a poor performance record on efficacy levels based on CSR activities . However, Uber still tries to be a
socially responsible business fulfilling five CSR activities.

• Economic responsibility: A socially responsible business should be profitable and contribute to economic
development. Uber has disrupted the traditional taxi industry and created job opportunities for many people
around the world. However, there have been concerns over Uber's business model, which some argue has led to
unfair competition and exploitation of drivers.

• Legal responsibility: A socially responsible business should comply with all applicable laws and regulations.
Uber has faced legal challenges in many countries regarding its status as a transportation company and its
treatment of drivers as independent contractors rather than employees.
• Ethical responsibility: A socially responsible business should operate in an ethical manner and
consider the interests of all stakeholders. Uber has faced criticism over its handling of data privacy,
sexual harassment and discrimination allegations, surge pricing practices, and the impact of its
operations on the environment.

• Philanthropic responsibility: A socially responsible business should contribute to the betterment of

society through charitable donations or community service. Uber has launched several philanthropic
initiatives, such as its Uber Movement program that provides data to city planners to improve urban
transportation.

• Environmental responsibility: A socially responsible business should minimize its environmental

impact. Uber's operations have the potential to reduce traffic congestion and air pollution by
encouraging carpooling and the use of electric vehicles. However, the environmental benefits of Uber's
services depend on how they are used by consumers and the environmental regulations in place in
different cities.

Overall, the extent to which Uber operates as a socially responsible business depends on various factors,
including its business practices, legal compliance, ethical considerations, philanthropic efforts, and
environmental impact.
Question 4
With what strategic issues should Uber management be most concerned in 2016? What are the 4-5
issues that offer the greatest opportunities or that present the greatest threats to its well-being?

1. Regulatory Navigation
Opportunity: Collaborate with regulators to establish favorable policies for ride-sharing services.
Threat: Legal challenges and regulatory hurdles may impede expansion and increase operational costs.

2. Competitive Edge
Opportunity: Identify and exploit competitors' weaknesses to strengthen market position.
Threat: Intense competition could lead to price wars, reduced profitability, and potential market share loss.

3. Driver Relations
Opportunity: Enhance driver satisfaction through improved incentives and support for a loyal and
motivated driver base.
Threat: Driver strikes or dissatisfaction could disrupt operations and harm Uber's reputation.
4. Technological Innovation
Opportunity: Invest in emerging technologies like autonomous vehicles to enhance service and
reduce operational costs.
Threat: Falling behind in innovation may result in losing market share to more technologically
advanced competitors

5. Brand Image and Public Relations

Opportunity: Focus on positive public relations, address controversies, and build a strong brand
image to attract users and investors.
Threat: Negative publicity and safety concerns could damage Uber's brand reputation and erode
customer trust.
Thank You!
.

.
.
.
.