Uber is considering its options in the Chinese market including a price war, imitation of competitors through taxi-hailing, mergers and acquisitions, or strategic partnerships. The group analyzes these options and recommends a three-part action plan. In the short term, Uber should shut down its unprofitable People's Uber service and pursue strategic alliances to expand in high-end markets. In the mid-term, it should collaborate with the government on regulations and forecast vehicle needs in cities. For the long term, Uber may reintroduce People's Uber as a customized, profitable service if regulations allow.

1. UBER
Group K
PRESENTED BY:
Alessio Mascolo
Andrea Saponaro
Marcella Ancona
Elido Caputi
Zhao Xinyu
Liu Ling
Xu Shang
1

2. AGENDA
Part 1
Part 2
Part 3
Part 4
UBER DESCRIPTION AND
INDUSTRY ANALYSIS
COMPETITOR ANALYSIS
NEW OPTIONS
ACTION PLAN
2

3. PART 1
3
UBER
DESCRIPTION AND
INDUSTRY
ANALYSIS

4. 1 American Multinational Online Transportation Network
Company
Founded by Garrett Camp and Travis Kalanick
Headquartered in San Francisco, California.
WHY
2010
WHAT
WHEN
Inspired by a bad experience of getting a
cab in Paris
4

5. Online/Mobile market is increasing
rapidly
4.0%
77.3%
91.7%
81.2%
57.5% 50.6%
44.4%
34.9%
0.00
100.00
200.00
300.00
400.00
500.00
600.00
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2010 2011 2012 2013 2014e 2015e 2016e 2017e
Mobile Market Value(yuan) Growth Rate
ONLINE/MOBILE MARKET IN CHINA
5
ONLINE CHAUFFEUR INDUSTRY
— A RAPID INCREASING MARKET
CAGR (COMPOUND
AVERAGE GROWTH RATE)
OF LAST 5 YEAR:
52,96%

6. Private car ownership is increasing
rapidly
PRIVATE CAR OWNERSHIP IN CHINA
3.4
4.3
6.1
8.8
10.9
13.1
18.6
21.5
0
20
40
60
80
100
120
140
0
5
10
15
20
25
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Number of private-owned vehicles(Millions)
6
ONLINE CHAUFFEUR INDUSTRY
— A RAPID INCREASING MARKET
CAGR (COMPOUND
AVERAGE GROWTH RATE)
OF LAST 5 YEAR:
21,95%

7. The number of taxi is increasing
slowly
NUMBER OF TAXIS IN CHINA
3.7%
-0.9%
3.3%
1.0% 0.3%
1.5%
1.7%
2.4%
2.6%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
850000
900000
950000
1000000
1050000
1100000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Numberof Taxis in China Growth rate
ONLINE CHAUFFEUR INDUSTRY
— A RAPID INCREASING MARKET
7
CAGR (COMPOUND
AVERAGE GROWTH RATE)
OF LAST 5 YEAR:
1,69%

8. 2013 2015Aug Nov 2014 May Aug Nov 2015 May Aug
Uber Black pilot program in Shanghai
8/23/2013
Price Reduction in Shanghai
Launch of People's Uber
10/22/2014
Partnership with BAIDU
12/6/2014
UberGreen in Wuhan
5/13/2015 -
10/10/2015
People's Uber Price Reduction 30%
8

9. 11
By 2015.6, Uber had
covered 11 major
Chinese mainland cities
1 million
1 million rides per
day in the Chinese
market
NOWADAYS
Kalanick
«At the current market
growth rate, Chinese
market will surpass the
United States market
before year-end»
But let’s have a look at the market share…

10. 2 78.3%
2.4%
10.9%
8.4%
Didi Kuaidi
Other
Uber
Chinese Online Chauffeur Market,Fist Quarter,2015
Yidao
Source: Analysys International, « Online Chauffeur Business Growing Rapidly in China in 2015 Q1, » May 12, 2015,
www.analysys.cn/yjgd/8926.shtml, accessed July 1, 2015
MARKET
SHARE
10

11. PART 2 COMPETITOR
ANALYSIS
11

12. 20152012 2013 2014 2015
Kuaidi Launched
8/13/2012
Didi Launched
10/10/2012
Yihao Zhuanche by Kuaidi --> Chauffeur market
Didi Zhuanche -->Chauffeur market
1/13/2014 - 2/14/2015Promotion Price War
2/15/2015 -
11/26/2015
Didi Kuaidi Strategic Merger
They make war…
Then they make love
DIDI KUAIDI IN CHINA
12

13. 2010: Founded
2014.6: APP was launched
High Customized Services
2 YIDAO
Focus on
Chauffeur Service
13

14. Riders enter
a pickup
location
Choose preferred
kind of vehicles
The Uber system
automatically match
a driver and a rider
Riders enter both
pick-up location
and destination
Wait for drivers
to respond
All taxi drivers currently
using the app decide
whether to take the order
Riders choose
the time of
using a car
Riders select
their preferred
vehicle type
Riders choose which
driver to fulfill the order
UBER
DIDI
KUAIDI
YIDAO
BUSINESS
MODEL

15. Option Service
UBER
People’s Uber Non-profit ride-sharing
Uber X Cheaper than Uber Black & Regular cars
Uber Black Luxury cars for each trip
DIDI KUAIDI
Kuaiche Private car owners & Regular cars
Taxi Taxi - hailing
Shunfengche Carpooling
Zhuanche Different kinds of vehicles options & Licensed rental
companies & Travel insurance & high-end service
Daijia Substitute drivers
YIDAO
Zhuanche Chauffeur service
Shijia Test driving of selected cars
Daijia Substitute drivers
SERVICE
15

16. PRICING • Based on distance & time
• Different base rate for different service
• Pay additional tips to attract drivers to pick up
• Based on distance & time
• All services require base rate
• Based on distance & time
• Surge Pricing ( based on current
supply-demand ratio, eg.
1.2X,1.8X)
Didi Kuaidi
Yidao
Uber
Base Rate Rate per KM Rate per min
Didi Fast Ride 0 1.5 0.25
People’s Uber 0 2.17 0.35
Base Rate Rate per KM Rate per min
Didi Chauffeur One 15 2.9 0.5
Yidao 10 2.8 0.4
UberX 15 2.3 0.4
Note: The prices listed are the lowest offerings available in Beijing; km=kilometer; unit=yuan;
Source: Case writer, data collected on the Uber official site, the Didi Kuaidi official site and the Yidao official site.
16

17. 顶部“开始”面板中可以对字体、字号、颜色、行距等进行修改。顶部“开
始”面板中可以对字体、字号、颜色、行距等进行修改。
2
Payment Solution Didi Kuaidi Yidao Uber
Cash
√ ╳ ╳
Wechat
√ √ ╳
Debt Card / Credit Card
√ √（Credit Card Only） √
Alipay
√ √ √
Charge the account
√ √ √
PAYMENT SOLUTION
17

18. OUTSIDE
Fierce competition in
Chinese market
Conflicts with local
drivers and ride-
hailing services
Legal issues
ISSUES & PROBLEMS
INSIDE
Surge pricing may charge too much on
customers regardless of the nature of
the change
Payment solution is not as convenient
as competitors
The quantity of Uber drivers is small compared
to the amount of taxi drivers
18

19. PART 3
NEW
OPTIONS
19

20. 20
STRATEGIC
PRIORITIES
REMAINING IN CHINA
YES
GREATER MS
MORE GENEROUS
SPENDING
TO GAIN CONSUMERS
& PROFIT FROM ITS
BUSINESS
ANOTHER WAY
NO
We decided among those 4 options according to the following criteria…

21. New Options
•Price War
•Imitation
•M&A
•Strategic allieances & Partnership
21

22. M&A Price War
Strategic
Alliances &
Partnership
Taxi Hailing
OPTIONS
Low
Costs
to
sustain
High
High
22
Results in terms of level of competition
Low

23. Product to be pushed: People’s Uber
Main aim of the strategy: Market Share
Through a penetration pricing strategy Uber could set lower
prices with the goal of exponential growth of both
customers and team drivers together with the possibility of
gaining market shares.
Price
War
Competitive advantage: Cost Leadership
GAP

24. PROS
• Stimulate the market
• Enlarge customers base
• Create more trade through
”word of mouth”
• Discouraging new possible competitors
• Exploiting demand elasticity
CONS
• ST solution not sustainable in the LR
• Incurring high costs (2,4b RMB
spent by Didi and Kuaidi)
• No economies of scale available
• Never ending price war with
competitors
• From a penetration to a predatory
strategythreat(government legal issues)
PRICE WAR
24

25. PRICE WAR
25

26. New Options
•Price War
•Imitation: Taxi-Hailing
•M&A
•Strategic alliances & Partnership
26

27. Product to be pushed: new services  taxi-hailing (based on Didi
Kuaidi)
Main aim of the strategy: Increase the number of app’s users
and increase the market share
Imitation:
Taxi
Hailing
Competing with Didi Kuaidi in both businesses: Taxi-hailing
and Chauffeur Online

28. IMITATION STRATEGY: TAXI HAILING
PROS
• Improving relationships with taxi
drivers and government
• Increasing new channels
• Increasing number of users
CONS
• Difficult to find an agreement
• Deteriorate brand image and core
value
• Didi monopoly
• Government banned the practice
of taxi drivers to monitor different
taxi-hailing apps
28

29. 29
IMITATION STRATEGY: TAXI HAILING

30. New Options
•Price War
•Imitation: Taxi-Hailing
•M&A
•Strategic alliances & Partnership
30

31. time
sales
START UP DEVELOPMENT STEADY STATE DECLINE
• M&A
• Alliances/strategic
Partnerships
• Defence advisory
• Corporate refocus
• Turnaround
• Takeover advisory
31
M&A strategy: acquisition of Yidao

32. Product to be pushed: People’s Uber, Yidao Zhuanche, Uber Black,
Uber X
Main aim of the strategy: Acquiring shares on the high-end market
Assumptions:
Yidao estimated value 1.22 Billion dollars, 10.9% of the
market shares
Uber estimated value 41.2 Billion; 8.4% of market shares
Forecast:
Being a growing industry, Uber acquiring Yidao can
strategically maximize its financial position.
M&A
strategy:
acquisition
of Yidao

33. M&A
PROS
• Double market share
• Improve relationship with government
& Chinese company
• Acquire new resources and channels
• Yidao insists on the high quality and
premium price of customized
chauffeur service
CONS
• Extremely risky
• Too expensive
• Recently Yidao increased
its capital amount of 100 millions.
33

34. M&A
34

35. New Options
•Price War
•Imitation: Taxi-Hailing
•M&A
•Strategic alliances & Partnership
35

36. 36UBER – DDIM 2015/2016
M&A Price War
Strategic
Alliances &
Partnership
Taxi Hailing
Results in terms of level of competition
Low
Low
Costs to sustain
High
High

37. Product to be pushed: UberX, Uber Black
Main aim: Acquiring shares focusing on the high-end market
In order to have success in this market, Uber needs to invest
in the right wayStrategic
alliances &
partnerships
Uber needs financial support
and governmental protection
from a Chinese partner

38. Strategic alliances &
partnership
PROS
• Direct contact with managers that
knows chinese market
• Creating additional value
• Financial availability
• Improve relationship with chinese
government and customers.
CONS
• Hard to find partners
• As you share resources
you have to share also profit
• Long-time to be achieved
38

39. Strategic alliances &
partnership
39

40. PART 4 ACTION
PLAN
40

41. ACTION
PLAN
• Uber should focus on High-end market
because of the congestion of low- and
medium-end markets and because of the
failure of the previous strategy.
• Uber should maintain the core value of
the company of high quality.
• We should create a strong brand image.
41

42. Short-Term plan
Short Term
Mid Term
Long Term
• SHUT DOWN PEOPLE’S UBER
• Expensive strategy with no effective financial returns:
• 30% price reduction without effect
• 1 billion spent for supporting the project
• Leads to a price war with competitors
NOT SUSTAINABLE IN THE LONG-RUN
42

43. Strategic Alliances
Short Term
Mid Term
Long Term
Quick Deals with companies in order to gain more consumers
Aim of the SR alliances: expand in the high-end market using the
money saved by shutting down People’s Uber
Examples:
• Top quality Hotels and Restaurants (ShangriLa Hotels)
• Travels&Tours
43

44. Government Collaboration
•Creation of a regulatory protocol for the chauffeur industry
to help the Shanghai Committee of Transportation
•Construction of the chauffeur service platform in
Guangzhou and other chinese cities
•Deals with government and car rental and chauffeur
companies (based on estimation of the car needed in each
city)
Short Term
Mid Term
Long Term
44

45. Forecasted cars needed to bid
Short Term
Mid Term
Long Term
City Population Number of Cars
estimated
Guangzhou
11 070 654 2950
Beijing
21 500 000 5729
Shenzhen
10 628 900 2832
Tianjin
15 469 500 4122
Suzhou
10 580 000 2819
Chongqing
18 284 100 4872
Chengdu
10 152 632 2705
Wuhan
10 607 700 2827
Hangzhou
8 892 000 2369
TOTAL 28 275 45

46. New big partners
Short Term
Mid Term
Long Term
• Association with high-profile chinese companies, also in order to
build a good relationship with local government
• Continue to modify our portfolio to target with customized products
new cities (UberGreen in Wuhan)
• New booking channels (online platforms, apps, Wechat)
• Theatre industry and Cinema Industry (Wanda Group)
46

47. Long-Term plan
• If the government regulates the industry, Uber will lunch
in the market a new version of People’s Uber
• NEW People’s Uber
• This time for profit
• Customized version  User can choose the driver
(Yidao)
• Premium Price Differentiation advantage
• Only licenced drivers are allowed to this service
Short Term
Mid Term
Long Term
47

48. 2020
Today
2016 2017 2018 2019 2020
People's Uber
Shut Down
Partnership with local
small high-end companies
Be an active player in the
regolamentary process of
the chauffeur market
Find new big partners and
make alliances
Launch of New
People's Uber--> more
customized and for
profit
Short-Term Run
Mid- Term Run
Long –Term Run
ACTION PLAN: FORECAST

49. UBER THANK
YOU!
PRESENTED BY Group K
49