Business Capstone – The Case of Uber

This report engages in a case study analysis of Uber. The report provides an overview of the company, engages in an in-depth literature review of how Uber is running its business model and services and concludes with a number of effective recommendations using which Uber can improve upon its existing services.

Running head: BUSINESS CAPSTONE – THE CASE OF UBER
Business Capstone – The Case of Uber
Name of the Student
Name of the University
Author Note

1BUSINESS CAPSTONE – THE CASE OF UBER
Executive Summary
Uber is a prominent taxi company that is based in the United States of America and which
currently operates in more than seventy different countries of the world. Uber offers app cab
services, and has over the years diversified its services to include food delivery facilities, bike
rides and driverless vehicle options to name a few. As a company, Uber is continuing to grow
and expand in spite of the many challenges and setbacks it has faced in terms of client criticism
and government regulations, in the course of running its operations. This report engages in a case
study analysis of Uber. The report provides an overview of the company, engages in an in-depth
literature review of how Uber is running its business model and services and concludes with a
number of effective recommendations using which Uber can improve upon its existing services.

2BUSINESS CAPSTONE – THE CASE OF UBER
Table of Contents
1. Chapter 1 – Introduction...........................................................................................................2
1.1. Company Overview..........................................................................................................2
1.2. Reliable and Cost Effective Services................................................................................2
1.4. Promotional Limited Services of Uber.............................................................................4
1.5. Rating Scheme..................................................................................................................4
1.6. Additional Services and Products of the Uber Company.................................................5
1.7. Research Questions...........................................................................................................5
1.8. Research Aims and Objectives.........................................................................................6
2. Chapter 2 – Literature Review.................................................................................................7
2.1. Business Model of the Uber Company.............................................................................7
2.2. Understanding how Uber can address its Competitive Situation Globally.....................12
2.3. Understanding the Growth Strategies of Uber................................................................17
2.4. Challenges Facing the Riding Industry Today................................................................18
3. Recommendations for Future Improvement of Uber.............................................................20
Conclusion.....................................................................................................................................22

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1. Chapter 1 – Introduction
1.1. Company Overview
Uber is a multinational transportation company that has truly transformed the way in
which the world moves today. It connects drivers to riders and vice versa in a seamless fashion
through its applications and it has made cities and towns of the globe far more accessible than
what they used to be before. The company was established in the year of 2009 and has its
presence today in several hundred cities worldwide. The global presence of Uber is one that is
rapidly expanding and it is a company that is continuing to bring people, towns and cities
together. By the year of 2015, Uber had emerged as a high profile company, perhaps the most
high profile company of the specific generation to which it belongs. Passengers are connected to
drivers by the Uber Company in quick and efficient manner and on a scale that is unprecedented
(Horan 2017).
1.2. Reliable and Cost Effective Services
What has particularly contributed to Uber being so popular among its customers is the
fact that its services are both reliable as well as cost effective. Customers prefer to use Uber over
other app cab services because of the breathtaking efficiency that this company’s value
proposition is characterized by. As many as two million or more Uber rides are being booked in
a day, today, worldwide and the net commission of the Company that it gets from its drivers
ranges between 1.5 to 2 billion dollars as of the year 2015 (Posen 2015). As many as 2 million
Uber rides are being booked in a single day, and the net revenue of Uber drivers is estimated to
range between one and a half to two million dollars as of the year of 2015 (based on case study
provided).

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1.3. Diverse Range of Services on Offer
Uber or Uber Technologies Inc as it is officially known is a company that provides its
customers with a diverse range of services to choose from. Some of the well-known examples of
services that are provided by Uber are bicycle sharing systems, ride service hailing, peer to peer
ride sharing facilities and food delivery services. The company is headquartered in the American
state of San Francisco and it is currently running operations 785 metropolitan cities around the
world. The business model of the Uber Company is quite dynamic in its character and form with
the key stakeholders of the company being passengers, riders, and customers who avail the food
delivery services. Passengers make use of a particular app known as the Uber app in order to
book an Uber ride. At the time of booking, the price or fare of the ride is quoted so customers
have full knowledge of how much a single ride is going to cost them at the time of booking itself.
It is a dynamic pricing model that the Uber Company makes use of for its operations around the
world with the fares for a ride along the same route or location varying from one point of time to
another. The fare is based not only on the location to which the cab is going to travel but also the
demand and supply of rides at the time of placing a booking request. When it comes to its
drivers, the Uber Company perceives its riders as contractors while certain countries like the
Switzerland or United Kingdom as places where courts of law perceive Uber drivers as recruited
employees of the company. Uber drivers are seen to use their own vehicles in order to offer
driver services on behalf of the company but can also lease or rent a vehicle for the same (Posen
2015).
There are specific and highly specialized services that are provided by the Uber Company
as well, when it comes to the domain of transportation in particular. Uber X constitutes the basic
level of services provided by Uber app cab, whereby private rides are provided in standard

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vehicles that are operated by well-qualified and efficient drivers and which are capable of
accommodating as many as four people at a time. Uber XL cars are slightly larger in size with all
other facilities remaining the same. Both the Uber X and Uber XL vehicles are known to be
equipped with what may be termed as child safety seats that can be availed for extra charge.
People who move around with service animals can use Uber vehicles without hesitation. Uber
Assist is a special program designed by the Uber Company that is aimed at providing elderly
people with assistance and care especially passengers who are physically disabled and who are
not capable of moving around from one place to another without the use of a wheelchair. Uber
Bike is a popular bicycle sharing system which facilitates user to rent lime scooters or electronic
bikes using the Uber mobile app for this purpose. Chap-Chap which means fast moving in
Swahili is a low cost transportation service offered by the Uber Company in Nairobi. Flash is an
Uber service in Singapore and Hong Kong that allows customers to avail cab services in both
publicly owned and privately owned vehicles (Wallsten 2015).
1.4. Promotional Limited Services of Uber
There are a number of promotional limited services that have also been created by the
Uber Company and which are aimed at providing rides to customers of fifteen to twenty minutes
duration each in the state of San Francisco. The vehicle is the De-Lorean, a car that was featured
in the franchise of the movie Back to the Future. Uber has also made it possible for its users to
go ahead and hire speed boats in order to get across certain points or areas located on the
Croatian Coast. Transport services have been offered by the Uber Company across Biscayne Bay
in the course of the art week that was held in Miami as well as at the Bosporous Strait during the
summer, in Istanbul, Turkey (Edelman and Geradin 2015).

6BUSINESS CAPSTONE – THE CASE OF UBER
1.5. Rating Scheme
Drivers of Uber cabs and bikes and users of the same as well as users of the Uber Food
Delivery services, are allowed to rate their experiences on a scale of one to five stars. Drivers
and riders who have low ratings may have their services and Uber accounts deactivated at any
given point of time. In the month of May in 2019, the Uber Company engaged in the active
process of deactivating the accounts of drivers who had low ratings. While there has been no
effort made on the part of the Uber Company to define what it that is exactly meant by below
average or low ratings, it is clear that such an update is one that is carried out on the part of the
company in order to eliminate customers and employees who are badly behaved and who are
unable or unwilling to do anything to rectify their behavior (Edelman and Geradin 2015).
1.6. Additional Services and Products of the Uber Company
As mentioned before, Uber is a company that not only provides transportation services but
engages in the provision of food delivery services as well. This it does through its channel
known as Uber Eats, whereby meals are delivered on a daily basis from participating nearby
restaurants and that too for a fee that is as meager as four dollars. Uber has tied up with Barclays
to offer a credit card that provides customers with a variety of incentives and rewards such as a
cash back rewards scheme. Uber Freight is a service that matches truckers with freight shippers
in a manner that is quite similar to the way by which drivers are matched or mapped with
passengers (Wallsten 2015).
1.7. Research Questions
Uber is a company that is characterized by a bold spirit, a dynamic nature and a thirst for
novelty and innovation. This assignment is aimed at arriving at the answers to the following
research questions on the Uber Company –

7BUSINESS CAPSTONE – THE CASE OF UBER
RQ 1 – How may the business model of the Uber Company be understood by referring to the
adage, “move fast and break things”?
RQ 2 – How should Uber address its Competitive Situation Globally with special reference to
the use of Emergent Technologies?
RQ 3 – What is the growth strategy of Uber? What are the biggest impediments to the growth
strategy of Uber? How is Uber trying to deal with such impediments and can this be regarded as
a good approach?
RQ 4 – What are the three critical challenges that the riding industry is faced with in today’s day
and age?
RQ 5 – How can Uber improve its services in the Future?
1.8. Research Aims and Objectives
The aims and objectives of this paper are as follows –
 To analyze the business model of Uber by referring to the adage, “move fast and break
things”
 To understand how the global competitive situation of Uber may be best addressed by
focusing specifically on emergent technologies
 To determine the growth strategy of Uber and the impediments to this strategy
 To understand how Uber is dealing with impediments to its good strategy and
determining whether or not this can be considered as a good approach
 To provide crucial recommendations using which Uber can bring about an improvement
in the rendition of its services in the future

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2. Chapter 2 – Literature Review
2.1. Business Model of the Uber Company
Uber is a company that has endured a lot of criticism from its customers because of its
price surging policy. It has also battled rival taxi companies, government regulators as well
as critics who have reprimanded the company for playing fast and loose with the money of its
customers. The adage, “Move fast and break things” can be applied quite effectively to the
case of Uber (based on case study provided). This section analyzes the business model of the
company along the lines of this adage to understand how in the process of developing and
implementing such a unique business proposition, the company has earned sufficient revenue
but has invited the wrath of customers and governments at the same given time. The analysis
will be carried out after first providing a detailed description of the Uber business model.
The business model of the Uber Company is quite a dynamic one and can be better
understood by referring to the business canvas model for this purpose.
Key Partners of the Uber Company
The key partners of the Uber Company are the drivers along with their cars, the payment
processors, the MAP API providers and those who invest in the company (Wirtz and Tang
2016).
Key Activities of the Uber Company

9BUSINESS CAPSTONE – THE CASE OF UBER
Some of the key activities that the Uber Company is seen to engage in are product
development as well as product management, customer acquisition and marketing, recruiting
drivers to operate its vehicles such as taxis and motor bikes, managing the driver payouts to
ensure that drivers of Uber bikes and cars get paid in a timely manner, and engaging in customer
support activities in order to ensure that customer queries are duly resolved and that customer
grievances and issues are resolved and addressed in a timely manner (Scheiber 2017),
Key Sources of the Uber Company
Some of the principal resources of the Uber Company are the skilled drivers who
constitute the major or principal manpower of the company and the technological platform
through which it operates (Dudley et al. 2017).
Value Proposition
Value Proposition for Customers
The main value proposition for customers when it comes to the Uber services is the fact
that the waiting time for customers is something that is considerably reduced. Customers can
simply book a cab using the Uber app service and do not have to wait for hours on end in order
for their vehicle to arrive. The price of the Uber services is far less than what one would have to
pay for the ordinary cab services, in most countries of the world. The Uber rides can also be
tracked on a virtual map and the estimated time of arrival or ETA can be witnessed on the app
itself, saving customers a lot of stress, strain and hassle while they wait for their Uber Cab to
arrive (Dudley et al. 2017).
Value Proposition for Drivers

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The biggest value that the Uber cab services holds for its drivers is the fact that it
provides them with an additional source of income. The Uber cab riding schedules are also quite
flexible and drivers have the option of working part time if they wish to. The payment process is
also quite convenient and secure and drivers can opt to get paid through online payment
mechanisms if they do not want to be paid in cash (Horan 2017).
Customer Relationship
Uber is quite active in fostering constructive and meaningful relationships with its
customers both over the short term as well as the long term. It makes extensive use of social
media channels such as Facebook, Twitter and Instagram for this purpose. Uber also offers
quality customer support services to ensure that the grievances and issues of customers are
adequately looked into. The review rating system offered by Uber is one that it makes use of to
obtain customer feedback about the driving or app cab services offered (Posen 2015).
Channels
Some of the main channels for revenue generation for the Uber Company are websites,
mobile applications that function well on an android based operating system and mobile apps
that function well on IOS as well (Wallsten 2015).
Revenue Streams
Revenue is earned by the Uber Company through car rides, with the rides being priced on
a per kilometer or per mile basis. Surge pricing is one of the most important revenue streams of
the Uber Company and it has invited a lot of criticism from customers and drivers alike. Surge
pricing occurs when the normal fare for an Uber cab ride is hiked to two to three times the

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amount, during rush hour or late in the night. Uber earns through its Uber Taxi, Uber X, Uber
SUV, Uber Black and various other diversified services the world over. Uber Rideshare and
Uber Cargo are recently new revenue streams that have been launched by the Uber Company
(Edelman and Geradin 2015). Over and above the cab services some additional services offered
by the Uber Company include Uber Fresh, Uber Rush, Uber Eats and a driver less car initiative.
The driver less car initiative has drawn considerable criticism as Uber has created this initiated
this by poaching many members of the Robotics department at Carnegie Mellon University by
offering them six figure bonuses and doubling their salaries. Uber Eats concerns itself with lunch
delivery and fresh food delivery and Uber Rush offers bike rides to interested customers (based
on case study provided).
Customer Segments
Drivers
Customer segment of the Uber Company includes drivers who own vehicles and who
want to earn money through these vehicles by driving for Uber, people who love driving and
people who wish to be referred to as partners of Uber rather than as drivers (Wirtz and Tang
2016).
Users
Customer segment of Uber is also comprised of mainly people who do not own vehicles
and who wish to make use of the Uber cabs and bikes to get around from one place to another,
who do not wish to drive their vehicles themselves, who wish to travel in comfort and style and

12BUSINESS CAPSTONE – THE CASE OF UBER
who wish to avail cost effective cab services made available right at their very door step (Wirtz
and Tang 2016).
Cost Structure
Most of the revenue or money that is earned by the Uber Company is used in setting up
an efficient technological infrastructure using which it can operate its services and make its
services accessible to customers. Salaries are given to all those who are permanent employees of
Uber. Money is also spent by Uber in the launching of various promotional events and in
different types of marketing expenditure (Posen 2015).
The business model of Uber is also characterized by four important steps –
 The first step is when a demand for the app cab service is created. People who own smart
phones can use the Uber app to book a cab instantly as and when they need it.
 Once a request for a cab has been placed through the use of the Uber app, a notification
concerning customer details is sent over to the driver. Drivers of Uber cabs have the
option of either accepting the request or rejecting it outright. In the event of a rejection,
the notification shall once again be circulated among other Uber drivers in the immediate
and surrounding areas.
 The third step is when customer is capable of tracking the ETA while waiting for the cab
to arrive. The cab meter starts only once the customer is seated properly inside of the cab
and then the entire journey that ensues can be tracked using the Uber app as well.
 When the ride is complete, customers are given the option of rating the ride. The rating
system is one of the most important features of the Uber business model as it allows a
customer to know about the reputation of a particular driver before booking the cab

13BUSINESS CAPSTONE – THE CASE OF UBER
service and enables him to decide whether the driver is a person who can be trusted or not
(Horan 2017).
Analyzing the Business Model of Uber using the adage, “Move Fast and Break Things”
The adage of “move fast and break things” which is often applied to the use of disruptive
technologies is also an adage that can be well applied to Uber. This is because in spite of offering
cost effective and efficient services, Uber has to bear a lot of criticism from its customers
because of its surge pricing model. Surge pricing takes place when the rates or fares are raised by
Uber at a time when there is a high demand for the Uber cab services and the supply of drivers
available at hand is quite limited or short. Surge pricing is something that occurs during the rush
hours, late at night or during public events. Surge pricing is capable of boosting the normal fare
for an Uber ride to double or triple of the fare amount. It is therefore no surprise that the surge
pricing policy of the Uber business model invited plenty of criticism from customers (Horan
2017).
The surge price policy also led Uber to face a number of lawsuits filed by private
personnel, government employees and administrators who accused the company of taking too
much liberty of laws of the land. The surge pricing aspect of the business model of the Uber
Company is one of its most important detractors as surge prices defeat the purpose of hiring and
using an Uber cab in the first place. Uber was launched in the world market by offering
economical cab ride services that could be booked for easily through the use of mobile app
technology. By requesting customers to pay twice or thrice of the normal fare by virtue of its

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surge pricing model, Uber has antagonized many of its stakeholders around the world (Dudley et
al. 2017).
There are many pending lawsuits that the Uber Company is faced with in American states
such as San Francisco and New York. The fact that the company refers to its drivers as partners
is considered problematic by the courts in these states, as well as in many other parts of the
world, with most global courts considering Uber drivers to be employees of Uber rather than
partners and contractors. Uber has also experienced a lot of criticism surrounding trust and safety
issues. There are several occasions where in spite of offering cost effective, proficient and
efficient cab ride services, drivers have been rude in their behavior with partners, thus putting
them off considerably. The modesty of passengers who are females has at times been outraged
by the drivers of Uber vehicles. Although the company plays an active role in verifying with the
help of the police, the details of each and every one of its drivers, it is still not able to combat or
rule out such cases entirely (Posen 2015).
In spite of all the criticism that Uber has faced as a result of its surge pricing policy, it has
stubbornly refused to back out of this policy. The argument of the company has been quite
simple in this respect. Uber believes that if it has to attract its drivers onto the roads during the
rush hours or at a time when demand for cabs are high, it has to take recourse to surge pricing
(based on case study provided).
2.2. Understanding how Uber can address its Competitive Situation Globally
In order to understand how Uber should address its competitive situation globally, it is
necessary to engage in an external and internal environment analysis of the Uber Company. The
external environment analysis of Uber will be carried out using the framework of PESTEL and

15BUSINESS CAPSTONE – THE CASE OF UBER
Porters 5 Forces and the internal environment analysis will be carried out using the framework of
SWOT analysis.
PESTEL Analysis of Uber
Political Factors – Uber is a company that has faced a great deal of political controversy ever
since its inception. It did not establish clear cut regulations for good governance to begin with,
and the insurance scheme of the company appeared to be especially dubious since it became
difficult to understand that in the event of an accident, who it is was to be held responsible, the
company or the driver. Additional scrutiny has been faced by Uber in each and every part of the
world. Charges have been filed against the company in France for inappropriate advertising, the
company has been ruled against in The Netherlands for not providing its drivers with proper
licenses, desist and cease orders have been received by the Uber Company in the country of
Poland and additional bans have been placed on Uber services in a number of Asian countries.
Political discussions concerning the operations of Uber have also centered around minimum
wage laws as applicable in the transportation industry and whether the company is seen to be
adhering to such laws or not. More often than not, countries of the world where the Uber services
are operational are those that require the company to use commercial licenses and provide all
necessary documentation prior to implementing services (Cunningham Parmeter 2016).
Economic Factors – The specific industry in which the Uber Company is seen to carry out its
services is Sharing Economy. This means that the economy happens to be based on the sharing
of intellectual or physical resources. When it comes to Uber in particular, drivers are recruited in
order to respond to the requirements of customers, and have them transported to a location of
choice. More often than not, the services offered by Uber are deemed to be far cheaper than the

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services offered by ordinary cabs in most countries. Uber is a company that has grown at a very
rapid pace in the global market, ever since its launch, thus demonstrating the fact that this is a
company equipped with tremendous economic potential (Ibid).
Social Factors – Uber customers are provided with quick and easy access to cab and other
services via the Uber mobile app. The cheap or affordable price of Uber cabs is also the reason
why it has been attracting customers in each and every part of the globe. Customers who enjoy
their Uber rides as well as those who do not enjoy their Uber rides usually post about their
experiences on social media platforms such as Facebook, Instagram and Twitter. The company is
thus able to spread information about its services through word of mouth quite quickly. Owing to
the ease and convenience offered by Uber, customers choose Uber services over other cab
services, or other forms of public transportation, albeit at a higher price at times (Meyer 2016).
Technological Factors – All customer bookings for cab services, food services and
transportation services in general as offered by Uber, are booked through the Uber mobile app.
The company is therefore solely dependent on the use of technology in order to keep its services
running in each and every part of the world. While consumers can book their appointments
through apps, they can also choose to pay for the services using the Uber app, via online
payment methods. It is a 4G internet network that drivers use in order to connect to the app in
order to make sure that it is working in a smooth and reliable manner at all times (Brazil and
Kirk 2016).
Legal Factors – The Uber Company has faced a lot of legal challenges in the various countries
of its operations. Uber services have been banned or faced with lawsuits in countries such as

17BUSINESS CAPSTONE – THE CASE OF UBER
France, The Netherlands and Poland and even in the UK for not following laws pertaining to
copyright, technical usage, minimum wages, as well as laws pertaining to employee safety.
Environmental Factors – Uber is careful in its approach towards environmental wellbeing and
does not make use of the type of fuel that can be harmful for the surrounding environment. As a
consequence, it has not invited negative attention or criticism because of the type of fuel that it
uses to run its services (Meyer 2016).
Porters 5 Forces Analysis of Uber
Competitive Rivalry – Uber is a company that is seen to operate in not just one but many
different countries of the world. It faces intense competition from its rivals and competitors in all
the countries of its operation, including in the United States of America. The biggest competitor
for the Uber Company, were taxis as operated differently in different countries of the globe.
Many of these taxi companies lost their drivers to Uber who joined the latter for better
opportunities and experience (based on case study provided). Yet in time, taxi companies have
also revitalized and diversified and are now offering packages as attractive as Uber car rental
rates. Some of the well-known competitors of the Uber Company worldwide include Curb, Ola,
Grab, Didi Chuxing as well as several others. In markets of Asia and the Middle East, stiff
competition is faced by the Uber Company from rivals such as Careem. Careem operates on a
business model that is very similar to the business model of Uber and is also quite popular in
Asia and the Middle East. The threat of competitive rivalry for Uber is definitely quite high
(Wirtz and Tang 2016).
Threat of New Entry – The type of business model which Uber appears to be functioning on at
the moment is not a business model that is going to take a lot of time and resources to build.

18BUSINESS CAPSTONE – THE CASE OF UBER
Barriers to entry and costs to entry are low, facilitating the emergency of a new company in this
domain at any given point of time. The threat of new entry for a company like Uber is therefore
high (Posen 2015).
Threat of Substitution – Local cab services and other forms of public transportation, in addition
to other app cab companies like Ola and Grab are substitutes of Uber that can seriously threaten
its existence in the global market. The local cab services in cities and towns of countries where
Uber is operational can induce tourists and locals to avail cab services at reduced prices, thus
drawing plenty of custom away from Uber. The threat of substitution for Uber is high (Horan
2017).
Bargaining Power of Buyers – Uber customers are quite price sensitive leaving the company at
a huge disadvantage if it has to compete on the basis of price alone. The bargaining power of
Uber customers is high. Customers have a definite edge or upper hand as they have so many app
cab options in the market to choose from (Cunningham Parmeter 2016).
Bargaining Power of Suppliers - Uber is a company that is greatly dependent on its suppliers
largely because of the fact that it does not own any of the vehicles that are currently functioning
under the name of Uber. Both driver services as well as the vehicles are outsourced which means
that suppliers get an upper hand. Suppliers have to be taken care of as anything which goes
wrong with the vehicles or drivers results in Uber getting a bad name. The bargaining power of
suppliers is high, for Uber (Edelman and Geradin 2017).
Internal Environment Analysis
SWOT Analysis of Uber

19BUSINESS CAPSTONE – THE CASE OF UBER
Strengths – The brand equity for a company like Uber is enormous. This is a company that is
recognized as a brand worldwide and it is expected to grow and develop at quite a rapid pace.
The fact that Uber is an aggregator and does not have to make any high and fixed investment is
something that works to its advantage. It can keep on adding more and more cities and towns to
its network. Customer satisfaction is something that Uber has always prioritized and it is one of
the main reasons why the company is doing so well today. Uber uses a dynamic pricing strategy
that functions on supply and demand principles. When the demand is high, the price will be high,
something that has proven to be very beneficial for the company indeed. Uber is also one of the
most adaptive of companies and has managed to adapt very well to the regions or countries
where it has set up business (Correa et al. 2016).
Weaknesses – Two key weaknesses of Uber is that it is highly dependent on manpower and
internet. It is also capable of catering only to customers who are well versed with the use of
technology (Smith 2016). Some of the company’s marketing tactics in the recent past have also
been quite aggressive inviting criticism from customers and rivals alike as well as the criticism
of governments. Whenever Uber made an entry into a new market in a new part of the world, it
simply decided to ignore government rules and regulations and it launched operations without
waiting for being given permission to do so, leading the business to be viewed with hostility and
negativity (based on case study provided).
Opportunities – Uber is a company that is already quite dependent on technology use and it can
further take advantage of newly emergent technologies like artificial intelligence and self-
powered data and other services to automate its services and make these more conveniently
accessible for customers. Uber can for instance take advantage of the newly emerging self-driven

20BUSINESS CAPSTONE – THE CASE OF UBER
cars to offer app cab services for customers, while using artificial intelligence to automate the
existing system making it more flexible and efficient than what it presently is (Smith 2016).
Threats – Uber is a company that is faced with numerous rivals and competitors worldwide.
Local can services and local public transportation facilities in addition to app cabs like Ola serve
as a threat to the company as they offer quick and easy transportation at similar or reduced prices
(Posen 2015).
2.3. Understanding the Growth Strategies of Uber
Market Penetration
There are two main growth strategies that are associated with the Uber Company. These are,
market penetration and market development. Market penetration occurred when the Uber cab
services were initiated through the use of a single mobile app connecting customers with taxi
drivers. Convenience associated with the use of the app led to its popularity and the customer
base of Uber grew in leaps and bounds. Extra convenience and low cost services have enabled
Uber to set up base in not one but several countries of the world (Berger et al. 2018).
Market Development
Market development is a process that entails introducing a new service or product into a
new region or a new market. The brand Uber is one that keeps growing and the company keeps
adding to its line of products and services. It is present today in as many as 83 countries and in as
many as 674 or more cities. Some of the markets where Uber has a very prominent customer
base are China, USA, Mexico, India and Brazil among others (Cohen et al. 2016).

21BUSINESS CAPSTONE – THE CASE OF UBER
Barriers to entry, restrictions with regard to fuel use and the prevalence of
numerous app cab services that offer facilities similar to that of Uber at reduced prices, are
three of the biggest impediments to the growth story of the Uber Company as can be witnessed
today. Conducting operations in various countries of the world, like the United Kingdom for
instance, is proving to be more of a challenge for a foreign company like Uber ever since Brexit
and the launch of a new right wing government that has been hostile to the presence of foreign
businesses in the UK. Concern for the natural environment, has led many countries of the world
to encourage limited use of cars or vehicles that emit dangerous amounts of fuel into the
environment. More and more people who share a concern for the environment are also preferring
to walk or use public transport instead of app cab services like Uber. There has been a spurt as
well in the number of app cab services worldwide. Today, there are plenty of companies like
Ola, Grab and Careem that can give a company like Uber a run for its money by offering similar
services based on a similar business model, made available for prices that are far lower than the
prices charged by Uber for the same services (Cohen et al. 2016).
Uber has responded to challenges in its growth story in the form of diversification.
Today, Uber is known not only for its app cab services but also Uber Bike, Uber Eats, as well as
promotional limited services that are designed to capture and retain the interest of customers both
over the short term as well as the long term (Berger et al. 2018).
2.4. Challenges Facing the Riding Industry Today
Three of the challenges that the Riding Industry is faced with today are as follows –
1. Drivers are Unpredictable and Difficult to Retain

22BUSINESS CAPSTONE – THE CASE OF UBER
Drivers constitute the key to success in riding industry. Drivers are to be kept happy and
pacified at all times, and it they on whom passengers depend to be safely transported home
after work or to some other location where the passenger needs to be. Retaining and
rewarding drivers can prove to be a challenge for companies that offer transportation services
at cost effective rates. Such companies in order to cater to customer demand might find it
difficult to pay their drivers as well as they could have if the rates had been slightly higher,
and this in turn places the business in jeopardy as drivers can quit at any given point of time
and take up a job elsewhere (Cohen et al. 2016).
2. Price Wars
Transportation companies often enter into price wars with one another in order to remain
in the game for a long span of time. This is something that more often than not spells financial
doom for the transportation companies. By continuously reducing prices or offering discounts
and deals in order to win the approval of customers and provide them with the incentive to use
transportation services, companies often run the risk of running at or incurring a huge loss. While
competition instigates companies to enter into price wars in the first place, it is the same
competition that can lead certain transportation companies to go out of the game because of the
meaningless price wars that they engage in (Cohen et al. 2016).
3. Creation of Customer Loyalty Programs of Long Lasting Value
A significant challenge faced by the riding industry today is how to retain customers. One
way of doing so is through the establishment of customer loyalty programs. For app cab service
companies this becomes extremely hard to do, given that customers are seldom ever loyal to a
single app. Efforts have to be made to keep customer satisfaction levels high at all times, in order

23BUSINESS CAPSTONE – THE CASE OF UBER
to give customers the incentive to use app cab services instead of availing ordinary transportation
services for the same (Horan 2017).
Ways by which the Challenges faced by Riding Industry can be Addressed using
Information Technology
Information technology can be used to make the driving system fully automated, thus in
turn making the driving process far more convenient for professional app cab drivers than what it
used to be before. By introducing online systems of payment only and making these mandatory
for customers in the place of cash, the price war of transportation companies can be brought to an
end. Customers who use online systems to pay for services can be offered rebates and discounts
instead of having to witness a rapid decline in prices at times and a rapid surge at other times.
Customer satisfaction can be ensured using information technology by making the latest music
and games accessible in app cabs at affordable rates, thus giving customers more incentive to use
the app cabs (Meyer 2016).
3. Recommendations for Future Improvement of Uber
The Uber Company can improve its existing services by leaps and bounds if it takes the
following recommendations into consideration –
 One of the quickest ways by which Uber can bring about an improvement in its
services is to give its customers the option to chat when using the chat service in the
app. This will allow customers to simply chat and take updates from customer care

24BUSINESS CAPSTONE – THE CASE OF UBER
representatives or drivers instead of having to call them, and get their concerns or
queries resolved in a far quicker manner than before (Posen 2015).
 Uber should give its customers the option to select a driver of their choice based on
review ratings. Not all the Uber drivers are well behaved, but those who have good
ratings are generally known to be people of exceptional behavior. Hence giving
customers the option to select their driver can be a great thing for the Uber Company
to do (Horan 2017).
 Increasing the rates or engaging in surge pricing is something that Uber needs to stop
immediately if it wants to retain its customers and drivers over the long term. While
this is an aspect of the Uber business model that appears to be beneficial for drivers, it
is actually not so because customers avoid booking Uber cabs at a time when the rates
are unusually high, thus leading to a loss than a profit for drivers. By putting a cap on
price surge, Uber can play a vital role in retaining customers and drivers at the same
given time (Smith 2016).
 More ride in details ought to be included as a part of the Uber app cab services
overall such as the weather conditions of the day. This is always useful for customers
to know especially for those who take Uber cabs to work in the early hours of the
morning or return home late with Uber in the wee hours of the night (Meyer 2016).
 Establishing better channels of communication is also one of the ways by which Uber
app cab services can be improved upon. The company needs to be more active on its
social media pages to take detailed review of customer experiences (Dudley et al.
2017).

25BUSINESS CAPSTONE – THE CASE OF UBER
 Uber needs to be careful about its recruitment and selection of drivers. Regardless of
whether or not drivers are contractors or employees of Uber, it is important for the
company to remember that it is represented by its drivers at the end of the day and
must take care it recruiting the most competent drivers in order to keep its customers
happy (Wallsten 2015).
Conclusion
Thus, while Uber is one of the most prominent and successful companies globally, it is a
company that has of late been facing challenges or impediments to its growth. Information
technology is something that Uber as a company should make use of to address its challenges,
address its competitive situation globally while also adding new features and revisions to its
existing services, in order to stay in the game for as long as possible.

26BUSINESS CAPSTONE – THE CASE OF UBER
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