Uber Case Analysis

Uber Case Analysis
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1. Introduction
Uber Tehnology Inc. is a software company which operates a mobile application that
helps to connect people in need of transportation and drivers. The company was founded by
Garret Camp and Travis Kalanick in 2009 in response to the growing need for flexible and
convenient transport solution in the modern metropolis (Uber, 2016). The innovators wanted to
create a service that could meet people’s desire for a speedy and comfortable transport service in
the urban areas without having to pre-book or hail down a cab as was the initial practice.
The idea of a service that could provide comfort and convenience to the masses at an
affordable price stemmed from the culture of the shared economy that was taking root at the time
(The Economist, 2012). Under this paradigm, anyone could enjoy high-end services such as a
luxurious room or car for a while without having to own it, and at an affordable price. They just
had to find someone who owned such an amenity. Uber and other similarly modeled services
such as AirBnB therefore only served to connect the facility owners with the demand, at an
affordable cost.
2. Nature of Uber’s Innovation
2.1. Focus on Innovation
Uber has been a revolutionary innovation, sending shockwaves throughout the transport
industry. The company leveraged on the use of technology in order to bridge the gap that existed
between drivers and clients in the cab business. Through the use of GPS and a mobile
application, drivers can receive a customer request for transport and be able to locate the exact
location of the client. In addition, analytical tools help the drivers to know where customer traffic
is high (Devan McClaine, 2012). The application also informs drivers of any customer within
close proximity of their position after they have made a drop. This increases the possibility of

them getting a client on their return run hence reducing down time. The multiple features of the
system helps drivers to maximize on business, therefore ensuring increased profitability.
2.2. Levels of Innovation
From the customer’s perspective, Uber has brought convenience that was missing in
previous services. The ability of the service to deliver a driver to the precincts of the customer on
short notice eases the process of getting a cab in today’s cities. Customers can therefore request
for transport on the application and relax as they wait for their ride to arrive as they are
constantly updated on the status of their request. Through its differentiated products; UberBlack,
UberX and UberTaxi, the company is able to provide unique service to the various market
segments. This product diversity is meant to address the varying needs in the market (McClaine,
2012). Customers who are in need of luxury vehicle services can use the UberBlack service
which provides high end Sedan and SUV transport such as for special occasions. For regular city
service, clients can settle for the UberTaxi or the UberX which enables any four-door salon
owner to make money off their car by signing up as an Uber driver on the site.
2.3. Types of Innovation
The new model of transportation that has been brought by Uber has completely
transformed the transport sector. It continues to appeal to many a city traveller with its cheaper
fares, ease of flagging and convenience. While the impact of the Uber revolution started in San
Francisco, the craze has since spread to other cities inside and outside of the United States. The
expansion has mainly been premised on understanding the local transportation culture in a city
and tailor-making the service to suit traditional practice while at the same time offering the
convenience of technology integration which Uber offers.

2.4. Open Vs Closed
Central to Uber’s upward growth tangent has been the operational model on which it is
built. Unlike the traditional taxi service, Uber considers its drivers as clients who are integral to
the success of its business paradigm. As such, it has endeavored to create a conducive
environment for them in which they can operate with unlimited potential and without the
bureaucratic barriers that impede the operation and profitability of the traditional taxi (Rusli,
2014). This has been achieved by eliminating the licensing requirement for drivers and paying
them attractive commissions on their job. This has helped to reduce driver turn over and
motivates them to work harder in order to earn more.
2.5. Speed of Diffusion
In addition, having the drivers use their own cars has helped the company cut on
operation costs arising from insurance and maintenance. The technology-based business model
has also aided the company’s expansion strategy as it is easily transferrable to a new locale
without much logistics of setting up an elaborate physical establishment for the company. In
addition to geographical expansion, the paradigm offers much leeway in terms of the expansion
of the business scope of the company. Uber can easily expand to the delivery of parcels,
groceries among other in a new model of urban logistics that could hold the key for its future.
3. The main drivers of innovation for Uber
3.1. Increased Competition
In a market that is worth over $11 billion in America, innovation is key for Uber to get
ahead of the competition (Christensen et al., 2016). The rideshare company has taken the
conventional taxi service head on. And they are feeling the heat that Uber is taking to them,
resulting in gimmicks such suggesting the illegitimacy of the company’s model in the scheme of