UberCase Study Presentation

Team 2: Allison Canum, Kevin Carlton, Alyssa Enders, Joey Froehlich and Danny Maasarani

Agenda

1. Company Background

2. Case Highlights

3. Business Model

4. Internal Analysis

5. External Analysis

6. SWOT Analysis and Recommendations

Company Background

● Founded in 2009● Founders: Garrett Camp and

Travis Kalanick● Based in San Francisco ● Originally a private car service

for executives● Communication through emails

and codes● Started growth in 2010● Use technology to bring

together passengers and drivers

Case Highlights

Pricing Strategy

● Surge Pricing● Lyft and Taxi Competition

Marketing Communications

Market entry/Employee recruitment

● Butting heads with Lyft

Business Model

Product Definition

Tap the app, get a ride

Uber is the smartest way to get around. One tap and a car comes directly to you. Your driver knows exactly where to go. And payment is completely cashless.

Customer Definition ● Do not own a car.

● Do not want to drive themselves to a party or function.

● Like to travel in style and want to be treated as a VIP.

● Want a cost-efficient cab at their doorstep.

Relationship:

● Social Media

● Customer Support

● Review Rating and Feedback system

Value PropositionCustomers:

● 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 normal taxi fares.

● Uber’s tagline says – Your personal driver.

It lets customers travel in style.

● Fixed prices for certain common places

(Airport)

Drivers:

● Additional source of income.

● Flexible working schedules. Can work part

time or simply whenever they like.

● Easy payment procedure.

● 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.

Profit Proposition ● Surge Pricing● Car rides on per KM/Mile basis● UberX, Uber Black, Uber Taxi, Uber SUV

● Uber keeps 20%, drivers keeps 80% of fare

Distribution Channels

● Social Media● Websites● Mobile app for Android● Mobile app for iOS● Popular destinations

Internal Analysis

Internal AnalysisMission Statement: Transportation as reliable as running water, everywhere for everyone.

Strategic Objectives:

● Aggressive growth and global expansion

Strategies:

● Recruitment strategies○ Drivers/logistics and social media/public relations

● Promotional strategies○ New user discount codes○ Social Media - Twitter, Facebook, YouTube, and its website○ Promotional Events - “Romance on Demand”, ice-cream delivery, Christmas tree delivery, etc.

Internal AnalysisResources:

● Financial - $258 million in capital (2013) from investors● Human - Founders, internal management team, recruiters, drivers, etc.● Technological

Capabilities: “Tap and ride” technology, fast, reliable, “safe” and convenient transportation

Core Competencies: Customer service, User experience, Ride options

Competitive Advantages:

● First mover (2009)● Customer loyalty

External Analysis

External Analysis - General Environment Political

● Laws banning or limiting the number of Uber drivers

● Registered with Federal Motor Carrier Safety Administration

● Airport pickup not allowed

Economical

● Increased Competition

Social

● Low driver wages● Certain areas● Economic friendly alternatives

Technological

● Self driving cars● Electric cars

External Analysis - Industrial EnvironmentThreat of New Entrants (Low)

● Barriers to Entry are high● Regulations on amount of drivers

Threat of Substitutes (High)

● Existing Substitutes○ Taxi○ Public Transportation○ Biking

● Quality performance and price comparisons

External Analysis - Industrial EnvironmentBargaining Power of Suppliers (Low)

● Oil and gas prices● Manufacturing leverage● Switch to gas saving cars● Supply of drivers

Bargaining Power of Buyers (Medium)

● Low to no switching costs

Threat of Rivalry (High)

● Competition - Lyft, Taxis, etc.

External Analysis - Industrial EnvironmentThreat of Rivalry (High)

● Competition ○ Lyft○ Hailo○ Sidecar○ Taxi○ Car-pooling

External Analysis - Competitor AnalysisFuture Objectives: Expand and be able to offer rides at airports and areas where they are currently unable to. Expand into highly populated, local areas such as Miami and Washington DC and international markets such as India.

Current Strategies: Offer rides to areas where taxis have no presence or where taxis are too costly.

Assumptions: Uber can assume that the future will lead to more success for their company. Lyft and Taxi services will continue to improve so Uber must stay on top of their game.

Capabilities: Uber is capable of providing rides through the use of a smartphone app.

Response: Uber must expand into new areas and lobby for certain laws. Uber must pay drivers more for better customer satisfaction.

SWOT Analysis

SWOT AnalysisStrengths

● It is a well-recognized brand.● As cashless payment system is used, Uber can track and

choose highly rated drivers.● The prices are lower compared to traditional taxi

operators.● It has a high standard of service, verified drivers and cars.

Uber Black users enjoy very high standard of service.● Operational cost is quite low. As it relies on

customer-to-driver interaction, a dispatcher is not needed.

Weaknesses● The idea can be easily copied. Nothing will prevent

competition from presenting the same product.● Very unpredictable business model.● The relationship between Uber and the drivers is ethically

questionable. It lacks the real connection. So, it is expected that loyalty between Uber and its drivers is quite low.

● There are privacy concerns within the application itself with it’s users.

Opportunities● Can tap growing markets in suburban areas where taxi

services are not available.● It can exploit new and big markets in countries like India

where taxi services are inconvenient and expensive.● Additional services like transporting older patients to

hospital, transporting children to school and transporting pets to the vet can be offered.

Threats● Some new legal regulations in countries like Germany will

ban Uber from operating.● Problems with local authorities can lead to fines. It will also

earn a bad public relations.● Increasing competition will ultimately decrease prices. This

will result in loss of customers. ● As new markets and drivers are joining, fraud and

scandals are also increasing. It is damaging for the brand.

Recommendations● Maintain consistent pricing for customers in both rural and non-rural cities.

● Provide validated proof of safety for customer peace of mind.

● Expand business model into other facets of business (i.e. UberAlternate/

UberAlternateX, UberTour, UberFresh, UberEssentials).

● Allow users put in for a reservation hours or days in advance, and let drivers

commit to pick up a reservation.

The End. Questions?