Organising and Managing Innovation: UBER

This essay highlights the aspects of organizing and managing innovation in an organization with a focus on UBER. It discusses the innovative approaches of UBER and how it is effectively managed. The essay also explores the competitive advantage of UBER and the type of innovation implemented by the company.

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Organising and Managing Innovation:
UBER

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Table of Contents
Introduction......................................................................................................................................3
Strategic Summary of UBER...........................................................................................................3
Organizing and Managing Innovation: UBER................................................................................6
Innovative USP of Uber and its role in offering UBER competitive advantage.........................6
Type of innovation at Uber..........................................................................................................7
Effective implementation and monitoring of innovation by Uber.............................................10
Strength, weakness and the challenges faced by Uber..............................................................11
Conclusion.....................................................................................................................................13
Reference List................................................................................................................................15

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Introduction
The business environment is dynamic and considered to be turbulent due to rapid changes in its
components. The success of innovative theories necessitates effective management policies and
approaches in the organization. Any breakthrough in management leads to a potent advantage in
an innovation organization, the companies looking forward to adopting unique and innovative
approaches for the service and product delivery; require intricate and strict monitoring and
management (Nicholls, 2018). Linus is one of the best evidence of the management innovation
system. Another example is the success of Visa. It is the pioneer most near-virtual organization
that owes its achievement to the effective management of their innovation. The history of
organization innovation is filled with the success stories of different brands with such live
examples (Howaldt, et al., 2016).
The aim of this essay is to highlight the aspects of organizing and managing innovation in an
organization. The assignment will reveal the innovative approaches of Uber and how well it is
managed by their organization. The revolutionary success of Uber is contributed to their
effective ways of managing innovation.
Strategic Summary of UBER
The very idea of Uber cabs struck the founders when the individuals Travis and Garrett were
unable to get a cab on the streets of Paris, back in 2008. The idea materialized into action and the
final product in 2010 when Uber Cab connected to their first customer in San Francisco. Later, to
distinguish themselves separately from the taxicab, the company shortens its name to "Uber"
(Uber.com, 2019). It was a pioneer most organization designing smartphone-based app for
booking and availing cabs. Their journey of success went beyond the streets of San Francisco

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and reached Paris. Later in the years that came by, Uber expanded its business service to almost
every alternative nation in the world. Uber ride includes UberX, UberPool, XL, Bikes, etc. that
serve a variety of customers (Uber Newsroom, 2019). Uber did not restrict their product mix to
automobiles. It started delivering ice creams and sweets in different cities located in the United
States. Later in 2015, the brand launches Uber Eats, which delivers delicious foods on demand
(Uber.com, 2019).
Figure 1: Demographics of Uber Users in the United States
(Source:Iqbal, 2019)
Uber has positioned its service-product very strategically. The brand segmented the market
demographically, based on age, gender, income group and urban context of the clients. The
middle-income group citizens or females owing to their safety mainly access Uber Pool. The

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urban population forms the largest customer base of Uber. It is evident from the statics available
that major users belong to the age group of 18-24; with a small minority of population belong to
the 55-64 group avails the service (Uber.com, 2019).
Figure 2: Age Group of the user's profile
(Source: Iqbal, 2019)
Uber has created a dual-sided platform, which has strengthened its value proposition. It benefits
both the clients and the drivers. It provides an opportunity for the drivers to earn, flexibility in
selecting their working hours, and better usage of their vehicles. The value proposition for the
customers includes ease of booking through smartphones and availing services at any point of
the day as it offers 24x7 services and ease of tracking the arrival schedule of the cab. These days,

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the brand introduced methods of security tracking as well to ensure the safety of the clients (Uber
Newsroom, 2019).
Though with the success of Uber, many other similar services entered the market, yet the brand
enjoys a competitive advantage over their rivals, as it was the pioneer leader. The customers
generally tend to align with the service with which they are acquainted with. The brand name
becomes synonymous to the service provided. Moreover, constant renovations in their models
and business approach to customizing their services according to the growing need of the
customers have appealed more to their client base, creating their own loyal patrons (Iqbal, 2019).
Organizing and Managing Innovation: UBER
Innovative USP of Uber and its role in offering UBER competitive advantage
Uber is an American company, which uses a digital platform to reach their customers. The brand
etched its name quite swiftly in the market that can be owed to its unique value proposition. UVP
should exactly offer to the client that is demonstrated through their name (Uber Newsroom,
2019). The unique value proposition is the first aspect that the customer perceives about the firm.
These short statements drive the employees, organisation, and clients towards the core vision.
These propositions intend to deliver maximum satisfaction to the clients, which no other business
will be able to offer. Such proposals tend to hold back the customer base for the companies
(Weigelt, & Sarkar, 2012).
To determine and establish the value proposition for the clients, brands need to recognize their
customers. Demographic attributes play a special role in identifying potential clients. As soon as
the customer segment has been identified, customization of the service and product becomes
easier for the establishment. Uber has segmented its market based on a demographic factor,

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especially age, gender, income status and urban context (Uber Newsroom, 2019). Uber has
struck the cord with customers due to its value proposition. It is not disrupting the traditional taxi
industry, however, increased their convenience and value for the clients. It should be noted that
this modern industry is not against taxis. Nonetheless, it minimizes the nuisances that are caused
by traditional cab services (Kaltenecker, Hess, & Huesig, 2015).
Uber service offers hassle free and fast riding options to their patrons. It makes the booking of
the cabs an easy task by using just the smartphone through the Uber app. Moreover, it is always
available. This facility provided by the brand makes it trustworthy (Uber Newsroom, 2019). This
attracted the huge number of individuals to try the app for the very first time, as it gives service
for 24 hours and each day a week. It made traveling, easier, tension-free, and fun filled.
Distribution of the service facility according to personal choice has provided extra benefit to the
customers. Individuals can book from micro size automobiles to pool car to XL facility,
depending on their preferences and need (Uber Newsroom, 2019).
Unique propositions of Uber have offered the company a competitive edge over the others. Due
to the immense success of the brand, and the customer appealing approach, many new
establishments introduced similar services in the market. Ola is the second largest ride-hailing
organization, just next to Uber. Other competitors include Taxify, Yandex, Didi, Careem, Meru
cabs and Lyft that are giving stiff competition to Uber. However, owing to the unique value
propositions introduced by Uber since its inception, this brand is still the market leader (Uber
Newsroom, 2019).

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Type of innovation at Uber
Innovations can be introduced at various levels in a business to gain a competitive advantage
over the others. Crowdsourcing is the technique of creating something new, with the help of the
crowd. Service innovation considers benefits of both consumers and the service providers. This
increases the competitive advantage of the company introducing innovative service. Social
innovation outlines the approaches that integrate renewed disciplines to save the environment
from current devastating effects. User innovation integrates developmental activities taken by the
intermediate firms, rather than the manufacturers. Disruptive innovation implies to the
techniques that hinder the current market conditions to establish something new for the clients
(Christensen, Raynor & McDonald, 2015).
Uber is an online business that coordinates service providers and clients. It has no taxis of their
won and hires independent drivers who serve customers via the Uber app. Their innovative
scheme of booking the cabs for the clients disrupted the traditional business. It allowed online
payments, swift response to customer needs, and 24-hour service to their patrons (Yu, & Hang,
2010). This increased Uber's popularity among citizens around the world. Moreover, individuals
are growingly becoming frustrated hailing street taxis due to their refusals and other tantrums.
The company is able to fend their competitors because strong financial support and prevailing
incumbents that facilitate Uber in maintaining a monopoly over the market (Rotheram-Borus,
Swendeman, & Chorpita, 2012).

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Figure 3: Six steps of disruptive innovation
(Source: Rotheram-Borus, Swendeman, & Chorpita, 2012)
Uber not only adopted disruptive innovation, but it also amalgamated its business model with
another innovation trick to serve and satisfy its target audience. It was evident to the founders
that the individuals are increasingly infuriated over the chaos created by the traditional cab
drivers. Over time, individuals tried other means to receive resort from alternative options, such
as booking a taxi through telephone via an operator. However, it took a much longer time to
avail the cab service. Furthermore, to add to the woes of the customers’ local taxis majorly
refused to drop the client to certain locations (Uber.com, 2019).
Uber focused on providing quality service to their clients. It ensures clean cabs, increases
reliability over their services, and ensures the safety and security of the passengers. The company
uses a responsive website that allows a number of facilities like GPS location, online payment

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gateways and automatic credit card options to both the driver and the client (Kaltenecker, Hess,
& Huesig, 2015). Uber has access to a strong network of data that gives the company edge over
the others. Moreover, it has developed a strong encryption code, which ensures that the
information about the client is first transmitted to the Uber and then transferred to the service
provider. This ensures that the Uber can track the client and their location if required.
Consequently, it can be inferred that Uber services use a combination of both disruptive and
service innovation to serve their clients in a new and better approach (Yu, & Hang, 2010).
Effective implementation and monitoring of innovation by Uber
No one can deny the fact that Uber has revolutionized the traditional transport sector through its
unique app-based service. Nonetheless, the company is facing legal troubles throughout the
world. Uber has eliminated the various transaction cost that the customers previously bear while
availing cabs (Uber.com, 2019). The local taxis and car rentals used have a monopoly over the
transport industry. Owing to such a situation, the charges were fixed according to their free will.
Moreover, this traditional cab industry used to add different transaction costs to their base
charges. Uber disrupted this phenomenon by introducing its service free from transaction costs
(Habtay, 2012).
Uber did not possess its own fleet of automobiles to serve the individuals, Instead, the founders
zeroed on using the idle cars of the owners. There are many instances where the owners are not
using cars often. In these circumstances, Uber has offered an option, where the car owners will
be able to earn money through their unutilized resources. They relied on the concept of sharing
economy to optimize their profits (Reinhardt, & Gurtner, 2015).

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Uber does not monitor or control the pricing that cabs charge. It states that the company is not a
transport organization that will pre-fix the rates. Instead, based on the demand of the cabs and
their availability, schedule of the day and location, the charges are automatically generated. The
pricing model is transparent for the clients as the individuals are able to know the exact fare
before booking (Markides, 2012).
Uber is able to monitor its service quantity and innovation quality owing to strong software and
databases. It maintains an enormous database of drivers, whom the brand contacts as soon as the
client makes a request for the service. The algorithm used by Uber is so strong and effective that
it starts matching the nearby driver available to the client within 15 seconds or even less. This
acquaints for the fast delivery service (Schneider, 2017). The software operating for Uber stores
each data they receive, even when the drivers are not plying passengers or when no demand is
made to the schedules when there is excess demand in any area. These data help the algorithm to
decide fares and manage the workload. Furthermore, the brand evaluates the driver information
to check if the individuals are employed at rival firms like Lyft or Ola as well. Therefore, it is
evident that Uber monitors and organizes their innovations through well-developed software and
algorithms (Uber.com, 2019).
Strength, weakness and the challenges faced by Uber
The rising popularity of Uber services verifies that the company has a limitless number of
aspects that the organization is good at and distinguishes itself from the rest. The brand is
customer focused and leaves no stones unturned to gain their loyalty through their valuable
service. It makes sure that the individual receives their service irrespective of any distance and
location. Moreover, the company permits dual payment method, viz., cash or online payment.
This option gives the brand extra leverage over the competitors (Laurell & Sandström, 2016).

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The organization has made sure that the entire set of events are monitored and completed
through the smartphone, which makes it easy for the contemporary generation. Uber has lowered
its prices as compared to local taxi drivers as the driver do not pay extra transaction costs or even
taxes (Schneider, 2017). Moreover, the brand developed a system where both parties can rate
each other. This ensures in future either parties can select after going through the review. Due to
the massive database of drivers, the company has an unlimited fleet of automobiles that are
dispatched at different price points, according to the preference and needs of the individual.
Flexible working hours for drivers and part-time opportunities have increased the employment
rate as well as the number of service providers (Dudley, Banister & Schwanen, 2017).
Nonetheless, the company has its own set of drawbacks. The organization treats individual
drivers as contractors, rather than full-time employees. This is one of the serious issues that is
supported by the employees. The drivers being on contract do not enjoy the benefits of overtime,
minimum wage, and other labor laws. Another grievance from the drivers revealed that the
majority of the service providers complain that they do not get tipping options and are low paid
compared to local taxi drivers (Laurell & Sandström, 2016). Furthermore, to add to the problems
of Uber, nowadays both the clients and drivers have installed more two ride-hailing apps. During
booking, customers check the prices on more than one site and avail the one with lower rates.
Similarly, drivers also check the fare rates of different companies and provide service to the
highest paid customer. In both the scenario, Uber is facing losses (Schneider, 2017).
The major challenge faced by Uber is from the government bodies. The legislation argues that
the company evades taxes stating it as drivers' liability, whereas the drivers are non-compliant
about the taxes. Moreover, operating beyond the borders of America, the company increases its
operating risks. The cultural difference in different countries is posing serious threats to their

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operation. The brand should understand that the working culture in America is different from the
other nations, especially in Asian nations (Uber.com, 2019). However, the brand adopts different
safety measures for their clients; however, it is a growing issue in different nations. The rise in
similar services around the different parts of the world is giving intense competition to the
market leader. However, innovative strategies are the unique propositions of the brand, however,
due to digital tools and collaborative practices, other competitors are getting equal chances to
establish their business in the same domain. Just as digital tools have aided the growth and
expansion of Uber, nonetheless, it is facilitating the rivals in their business as well (Laurell &
Sandström, 2016).
Conclusion
Uber has revolutionized the complete transportation industry. This app based service offered cab
service to the clients who booked it through their smartphones. To offer better services to the
customers, the brand demographically segmented the market. It targeted the young age group
people, who are tech-savvy. Uber followed both disruptive and service innovation strategies. The
organization disrupted the traditional cab services by their impoverished services.
Innovations at Uber are effectively managed due to their strong algorithm based network. This
software handles the intricacies of the business efficiently. The biggest strength of Uber is its
customer-centric approach to resolve the challenges. However, their payment structure and
employment regulation have adversely affected the emotions of the Uber drivers. The prime
challenge faced by the company currently is from the Government legislation, which claims that
the company circumvents the taxes. Uber has reached the pinnacle of success due to its
breathtaking innovation, effective management through strong algorithms and core values.

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Nonetheless, the challenges should be addressed quickly to ensure the smooth operation of the
company globally.

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