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GROUP 1 UBER IN 2018.pdf
- 1. UBER IN 2018 GROUP 1 ALAJAS ARCILLA LIM LU MAGLAHUS OLARTE An External - Internal Analysis: UBER is the developer of the car-hailing smartphone app that provides a platform that allows users to access transportation and food ordering services 2 different types of providers that operated in the ride-for-hire marketplace: taxicab services and limousine services A common form of licensing is the medallion system In other countries, the regulations of the ride-for-hire are similar to US regulations. Introduction Ride-for-Hire in U.S. and other countries
- 2. Uber was founded in San Francisco 2009 by Garrett Camp and Travis Kalanick to develop a smartphone app that offers a new ride-for-hire service. The Uber app contains the following features: Relies on a network of established, licensed, limousine drivers and companies that wish to be a part of its system. Makes use of big-data analytics to identify the best areas for drivers to wait in order to speed up the response time to customers requests. Uses data analytics to make use of “surge pricing”. Allows riders to rate drivers Uber spent nothing on marketing by spreading through word of mouth Uber's Service
- 3. For regulatory responses, there were a lot of objections from taxicab companies against Uber. The following concerns raised were: It operates like a cab company but does not have a taxi license It’s cars don’t have insurance equivalent to taxi insurance It may threaten taxi dispatcher’s way of making a living Limos usually have to book an hour in advance, by law, while only licensed taxis can pick someone up right away, but Uber picks people up immediately without a license deemed the service as illegal Uber soon faced several competitors and among them is Lyft Uber created a new service category called "UberX" Uber's Services
- 4. The 2015-2018 period was a challenging period for Uber’s expansion strategy due to regulatory issues and fierce competition. On the bright side, the service continued to grow, specifically in America. Regulatory pressure in 2014 and 2015 have forced Uber to end its services in some countries in Europe because of unlicensed, nonprofessional drivers using their own vehicles, not suitable for taxi operations, and failure to report crimes. Uber hit some big potholes In Russia and Asian countries, Uber withdrew due to fierce competition with the local rivals. Contrastingly, Uber exhibits stable growth in India and Latin America. Management Missteps In 2017, Uber was involved in several lawsuits and scandals that destroyed its image Kalanick step down, and he resigned on June 20, 2017. In August 2018, Kalanick was replaced by Dara Khosrowshahi, CEO of Expedia.
- 5. He’s an exceptional leader Khosrowshahi has done the following: Hired Harford, the company's first diversity officer and COO Provided compensation with London lawmakers Held meetings that Kalanick never did during regulatory issues Oversaw negotiations that led to a large investment by Softbank in Uber In the future, Khosrowshahi is positioning the company for an IPO, as early as 2019. In order to do that, he needs to form a parth to profitability for Uber. Profitability may be on the way Khosrowshahi Takes Over
- 6. Lower maintenance costs since it is an asset-light kind of business Wider customer reach due to networking strategies and with the use of “Accelerators” Surge pricing strategies has attracted drivers to work under their industry Smoother and convenient transactions on both drivers and consumers Cheaper advertising costs by means of word of mouth Technological advances brought by Uber to maximize user convenience is consistent to consumer demands Uber has slowly become the new norm for transporation Uber’s service is most needed on special occasions and during a bad weather Uber pioneered the user and driver rating system which responds to the common frustration of bad drivers and bad customers respectively 1. 2. 3. 4. 5. 6. 7. 8. 9. Opportunities: 10. Effective and faster methods of gaining attention to newer states to operate 11. Exit barriers for established firms in the industry is easier 12. Independent contracts with taxi drivers has lesser expenses to manage 13. Low investments in their expansion projects which easens their method of establishing to major settlements 14. Traditional taxi drivers may opt to work under Uber because of their employee benefits and better employment 15. Discounts on major cities has attracted consumers to use the Uber’s service 16. Increasing population opens to more app users 17. Took the initiative to introduce "nature-friendly vehicles" 18. Assure safety to riders
- 7. Threats:: Low switching costs - customers can use another application without incurring costs High bargaining power of suppliers Buyers have a higher bargaining power Taxi industries are close substitutes with one another There is a tight competition in the industry and may push Uber to cut down costs Several states have stricter regulations in operating Uber’s business Surge pricing may affect customer satisfaction The preference for an environmental friendly method commuting may result to fewer customers (ex: walking, biking) 1. 2. 3. 4. 5. 6. 7. 8. 9. A history of controversies can affect a customer’s impression towards the company 10. The emergence of newer companies offering the same type of service may cause customers to move to another company when not satisfied 11. Rival companies provide more unique and driver friendly benefits 12. Uber affected standard taxicab services resulting to unemployment of taxi cab drivers in the industry 13. Unhealthy work relationships may lead to a decline of employee productivity 14. Changes in administrations may lead to changes in policies 15. Efforts of ceasing operations of Uber 16. Increase employment rate of drivers 17. Banning of operations
- 8. Strengths: MARKETING FINANCE HUMAN RESOURCE PRODUCTION Huge investments in the development and refinements of its smartphone application Rating system who identifies driver's misconduct. User-friendly smartphone application connects available drivers to passengers Drivers use their own vehicles and have a high earning potential with a flexible time schedule. Uber’s dual business model Uber drivers as the “other customer” Surge pricing algorithm Cashless payment transaction Rating system for both driver and passenger Operations team on the ground Word of mouth and social networks Accelerants Uber’s referral marketing program Rating systems for both drivers and passengers Uber X Partnering with other companies
- 9. MARKETING Weakness: FINANCE PRODUCTION HUMAN RESOURCE Poor assessments on hiring the drivers Forced to suspend their services in several countries Assaults and criminal offenses Sexual harrassment and discrimination issues in the company. Unethical behavior for the staff of the company Do not have strong assessments for their drivers Faced a number of issues with authorities for not following regulations in different states and countries. Intense competition with indigenous transportation companies Their services provided using the mobile application can be easily copied Indecisive in terms of establishing Uber to another state or country Invest directly - big investments. Intense price war