Uber Case Presentation
- 1. Uber Case Study Presentation Team 2: Allison Canum, Kevin Carlton, Alyssa Enders, Joey Froehlich and Danny Maasarani
- 2. Agenda 1. Company Background 2. Case Highlights 3. Business Model 4. Internal Analysis 5. External Analysis 6. SWOT Analysis and Recommendations
- 3. 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
- 4. Case Highlights Pricing Strategy ● Surge Pricing ● Lyft and Taxi Competition Marketing Communications Market entry/Employee recruitment ● Butting heads with Lyft
- 6. 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.
- 7. 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
- 8. Value Proposition Customers: ● 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.
- 9. 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
- 10. Distribution Channels ● Social Media ● Websites ● Mobile app for Android ● Mobile app for iOS ● Popular destinations
- 12. Internal Analysis Mission 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.
- 13. Internal Analysis Resources: ● 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
- 15. 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
- 16. External Analysis - Industrial Environment Threat 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
- 17. External Analysis - Industrial Environment Bargaining 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.
- 18. External Analysis - Industrial Environment Threat of Rivalry (High) ● Competition ○ Lyft ○ Hailo ○ Sidecar ○ Taxi ○ Car-pooling
- 19. External Analysis - Competitor Analysis Future 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.
- 20. SWOT Analysis
- 21. SWOT Analysis Strengths ● 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.
- 22. 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.