Case Study on Uber Inc.: Challenges and Business Plan

This case study explores the dynamics of the rising Uber company and fosters hypothetical feedback on the challenges facing the company currently. It covers Uber's macro and micro environment, competition, challenges, and business plan. The analysis shows how Uber can create a significant impact on the industry by cutting fees, creating proper terms and conditions of work, maintaining legal standards, and enacting changes in commission percentage for drivers.

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CASE STUDY ON UBER INC.
By:
Marketing management
Professor’s Name
Institution
Date

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Executive summary
I chose to conduct my case study on the Uber company because of the recent exposure of Uber
scandals such as Uber drivers failing to show up after customers request cabs when the fares are too
small, on the Quartz online magazine. News link, https://qz.com/1387942/uber-drivers-are-forcing-riders-to-
cancel-trips-when-fares-are-too-cheap/
The purpose of this paper is the case study to explore the dynamics of the rising Uber
company and to foster hypothetical feedback on the challenges facing the company currently.
The research adopts facts based on the dynamic nature of the company and developing a case
interpretation of the type of business complexity as well as providing an appropriate business
plan to steer the company into the future.
The analysis shows that The hailing Uber company that is currently facing numerous
challenges can create a significant impact on the industry by cutting the fees charged on
customers, creating proper terms and conditions of work, maintaining legal standards and
legislation as well as enacting changes in commission percentage for drivers. Uber will do its
best to keep off its competitors and be the best in the market of digital transport service
providers. It aims at reaching the entire population from old to the young to provide a quicker
and more convenient ride in relation to the already existing taxi market service.

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Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................6
Organizational background for The Uber Inc..............................................................................................7
Current issues and challenges in uber enterprise recently..........................................................................7
Uber macro environment.............................................................................................................................7
Market demography.................................................................................................................................7
Customer perception of Uber services.....................................................................................................8
Ecological and physical environment......................................................................................................8
Uber growth in a given city.....................................................................................................................8
Political environment...............................................................................................................................8
Uber micro environment..............................................................................................................................9
Media.......................................................................................................................................................9
Uber revenue and cost structure...............................................................................................................9
Services...................................................................................................................................................9
Competition...........................................................................................................................................10
Challenges facing Uber.............................................................................................................................10
Competition...........................................................................................................................................10
Individual taxi operators........................................................................................................................11

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Termination of Uber operations.............................................................................................................11
Taxes.....................................................................................................................................................11
Access Fees...........................................................................................................................................11
Security.................................................................................................................................................12
Negative publicity.................................................................................................................................12
Relation with drivers.............................................................................................................................12
Funds.....................................................................................................................................................13
Global dominance..................................................................................................................................13
Uber's business plan..................................................................................................................................13
Marketing strategies..............................................................................................................................13
Marketing communication.....................................................................................................................14
Product efficiency..................................................................................................................................14
Pricing...................................................................................................................................................15
Maintaining the legal standards.............................................................................................................15
Distribution............................................................................................................................................15
Office accessibility................................................................................................................................15
Security.................................................................................................................................................16
Driver company relationship.................................................................................................................16
Conclusion.................................................................................................................................................16
References.................................................................................................................................................17

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Introduction
A thriving business is the desire of all entrepreneurs in today's world. With high levels of
competition, all business owners have to raise the standards of their enterprises to be able to
compete with rival companies, increase in demand, as well as the changing trends in the market.
This is only possible by keeping watch on trends and keeping the business on the top of the
charts. (Groza & Ragland, 2015)
"The mainspring of all economic activities is human wants. Therefore, it can be said that
the main purpose of economic activities is the satisfaction of Human wants." (Fernando, 2011, p.
3) In well-developed economies, there are many and varied wants and thus a high order of
economic activities. These, give way to establishment of a wide range of businesses from
personal proprietorship to global business establishments. The success of these businesses is
however not guaranteed to be eternal. The business environment changes with fluctuations in the
wants and preferences of the population. This can cause highly established enterprises to fall
regardless of the level of establishment. (Kaufman, 2012)
In this paper, I consider the Uber enterprise. We will be focusing on the nature of
enterprise Uber is, when it was started, reasons why it was started, the founders, how it runs, the
business environment surrounding the enterprise, both macro, and micro, the success, as well as
the challenges faced by the enterprise. I also give my view on the trend and future prospect
regarding the business and whether it will survive or fall to the challenges it faces. The case
study is based on the recent scandals behind the Uber on social media and the press. I will also
devise a market plan to ensure the Uber remains at the top of the taxi business.

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Organizational background for The Uber Inc.
The Uber is a transportation company that deals with taxi, food deliveries, cab sharing,
and hiring. Its business is mainly run from the official Uber website (www.uber.com) where
orders and payments are made. Its headquarters are based in San Francisco, California, in the
United States of America. The Uber enterprise was founded as UberCab in March of 2009 in San
Francisco, California. It was founded by Travis Kalanick and Garret Camp. The Uber has grown
from a San Francisco enterprise to a worldwide digital taxi service and transport company. On
May 2010, Uber officially launched Uber services and Their mobile app.
The Uber was started by Camp from an opportunity he noted of exploitation of customers
by taxi operators. He as later joined by Kalanick, and together they formed the Uber company.
From the humble beginning, the company today boasts world-over domination in the cab
business. (Stone, 2018)
Current issues and challenges in uber enterprise recently
Uber macro environment
Market demography
The demographic analysis of Uber customers shows that most Uber customers are young
people age 25-34 years who mount to 57 percent of the users. The gender makeup shows that
About 60 percent of the users are men with women making the remaining 40 percent. 80 percent
of the Uber users are educated to tertiary level. This demography shows that the target market for
Uber customers consists of middle to upper class and educated young people aged between 25-
34 years. (Schneider, 2017)

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Customer perception of Uber services
Customer Perception on the Uber is mainly based on the price charged in a ride, the
comfortability of the ride, the time taken to reach a given destination as well as the pick-up time.
Uber boasts affordable fares as the fares have a fixed algorithm for charging in relation to time
and distance thus protecting customers from exploitation. Uber pick up time is as well taken care
of since the customer gets to choose the nearest cab and is notified of average waiting time.
(Fernando, 2011)(Nabarelli & Plalper, 2017)
Ecological and physical environment
Uber mainly provides its services in Urban metropolitan cities. This is due to the high
market concentration in urban areas. Their services are therefore limited to the urban bracket.
Uber growth in a given city
With venture to a new state, Uber's customers continue to grow since the business keeps
expanding. However, as the business keeps running, it reaches a limit where the market saturates.
This is probably a result of limited capacity in the number of drivers or cars in the given area as
well as service users. Uber poses themselves as a distinct and efficient transport service company
attracting more customers. In attempts to gain customer trust, Uber highlights positive as well as
humorous stories about fun driving experiences directing focus away focus away from bad news
to the interesting experiences that make Uber a unique brand to embrace.
Political environment
Uber services require a politically stable environment to operate so as to ensure the safety
of its customers and workers. Its operations as well require political approval so as to run within
a given jurisdiction

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Uber microenvironment
Media
Uber services are mainly digitalized. Performing services ranging from taxi services, peer
to peer car hire, luxury car hire to deliveries, Uber is gaining a global dominance in the transport
sector. Expanding its grid Uber runs services in over 800 metropolitan cities worldwide. It has
created a worldwide network of trusted services and taken the top of the charts in the transport
service. To get an Uber transportation cab, you log into the Uber website and request the closest
cab. Fares are quoted before the ride. Fares vary according to the distance, project time, as well
as the time of the day.
Uber revenue and cost structure
Gross revenue earned by the company is defined by how much services Uber drivers
deliver, that is, the price charged per ride and the commission percentage that Uber charges its
drivers. More revenue is collected from revenue from canceled rides, delays and app data from
Uber websites. Uber's marketing plan is currents based on offering affordable services to the
customer compared to other car service providers regarding customer and driver satisfaction.
Uber has been strategically developing their name value as well as acquiring additional funds
through international collaborations such as partnering with Toyota. (Bloomberg.com,2016)
(Craig & Campbell, 2012)
Services
Uber's core business is to provide a market for ride services supported by mobile phone
application and a point to point software technology that connects passengers and drivers. Its
services are based on a peer to peer car sharing service, luxury rides, motorcycle sharing, as well
as deliveries. In other countries, Uber provides even water and air rides.

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Competition.
Uber mainly faces competition from personal taxi operators as well as another copycat
digital taxi service operators
Challenges facing Uber
Over the recent past, Uber has received a public outcry on the chronicles behind Uber
services. Accompanied by a series of strikes and protests the Uber company seems to be on the
verge of crisis. While Uber rises to be a worldwide phenomenon, it has received negative
backlash that has negatively affected its operations and brand as a whole. Questions have been
asked about Uber's integrity causing even the loyal passengers to switch services. With customer
reviews indicating complaints about ride experiences, accusations on overcharging, and the
driver lacking to know where they were going. But like any business negative allegations do not
lack. In this section we will consider the challenges facing the Uber as discussed below:
Competition
Even though Uber has enjoyed the benefits of non-competition, New similar operators
such as Taxify are on the rise putting the Uber dominance down. Following the expansion of the
digital taxi operations, Uber has been forced to up its game so as to keep its dominance at the top
to avoid being overtaken by the upcoming companies. However, the earnings have dropped
giving Uber losses resulting from a drop in the market. This rise in the level of competition of
copy-cat companies has increased reasons why Uber should watch its relation with customers
much better. (Hood & Vahlme, 1013) (Sisco, 2014) (Porter, 2008)

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Individual taxi operators
Uber has proven to be a threat to the individual taxi operators sharing the market. This is
created by their cheap accessibility as well as digital network mobility allowing them to access
customers easily. This has thus created a rivalry between Uber drivers and individual taxi
operators. This rivalry has created wars and a string of rising in insecurity through cold blood
murders of Uber drivers by individual taxi operators. Various protests have been made by the
individual taxi operators against Uber services in various countries. In some countries such as
Morocco Uber has been forced to withdraw its services due to insecurity reasons and protests by
private taxi operators who are trying to protect their home market fields.
Termination of Uber operations
Some countries and states have banned Uber services. Linking its services to criminal
activity and non-compliance to tax payment Uber services have been terminated in certain states.
This has put Uber drivers operating in such areas at great risk with the law.
Taxes
Uber has been termed a tax liability by various governments. With a number of legal
proceedings ongoing to determine if Uber is a technology company or a taxi company. If Uber is
dismissed of being a technology company, then its liable to pay taxes to the government which
will either lead to termination of Uber operations in that particular city or increased fares which
will affect its competitive nature putting it at risk of being overtaken by other taxi operators.
Access Fees
Airports, subways, and port authorities have begun cracking down on Uber drivers. The
authorities have laid down charges for picking and dropping off passengers. This has increased

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the cost of rides for customers reducing the competitiveness of Uber in relation to other taxicab
operators.
Security
The security of Uber drivers is at stake. Uber drivers follow an innocent signal of
passenger call not knowing what awaits them on the other side. Uber drivers have found
themselves on the hands of serial killers, rapists, thieves, and terrorists. An Uber driver has to
take a client to his destination despite the risks that are associated with the area. Picking
strangers up and taking them to unknown destinations can be quite dangerous and predisposing.
(Acton , 2013)
Negative publicity
With Uber making major strides of success, not everyone is pleased with their
domination. Various companies and individual taxi operators are trying to make the company
fall. A number of allegations have been publicly laid accusing Uber of underpayment and
exploitation of workers. Bloggers have written negative statements about the company just so as
it loses its competitiveness.
Relation with drivers
Uber drivers are constantly fighting back for what they consider exploitation by Uber.
With Uber fares constantly decreasing, Uber's relationship with the drivers is becoming uneasy.
With the rise in the economy, Uber drivers demand higher wages which they do not seem to get.
With Uber drivers hired as contractors, rather than employees, they have formed organizations to
help fight back for their rights alongside holding of numerous protests and lawsuits to fight for
their rights.

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Funds
With ongoing research on autonomous cars, Uber is on the verge of going broke. Uber
aims at creating auto drive cabs so as to do away with the expense of having to pay drivers. If
this plan becomes successful, then Uber could have made a great stride in becoming the greatest
digital taxi service provider as a monopoly. This research is, however, taking up most of Uber's
capital. The problem is whether Uber will survive the crisis to see the results of the project.
Global dominance
Uber faces several challenges in attaining global dominance which is its main aim, to
become the transportation player all over the world. The Uber has however seen major setbacks
in its ambition. Even in areas where Uber is legally recognized, the war with home operators
continues to grow. Legal legislation has locked Uber out of service in several countries such as
Morocco, France, Taiwan, etc. (Montague, 2018) (Lashinsky, 2017)
Uber's business plan
Considering the Uber's current status, a proper market plan needs to be designed to keep
the company above the competitive level of its rivals. For Uber to attain its goal of global
transport dominance, a series of implementations have to be done on its marketing strategies.
“Environmental issues have implications for the organization’s direction and strategy.” (Elearn,
2009)
Marketing strategies
This is based on the experience Uber gives its customers. Uber should aim at making
their prices affordable and making their services more available to all customers as compared to

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other taxicab companies. The quality of Uber experience will cut out competitors and keep Uber
on the top of other companies. (Padueen, 2017)
Uber should provide a platform for customers to provide feedback on the services
provided as well as give suggestions on improvements to be made so as to better their services.
This will aim at positioning Uber as the overall best choice of the customer. (Crouch, 2008)
Marketing communication
“New web Technologies have made it easy for anyone to create and most importantly
distribute their own content. A blog post, or tweet, or Youtube video can be produced and viewed
by millions of people virtually for free.” (Zerrella, 2009, p. 3) Uber should generate adverts to
entice people into the industry as well as to promote the company. This can be achieved by
television, magazine, billboard and radio advertisement as well as digital adds on mobile
platforms. (Evans, 2012) Through outlets such as Instagram, Facebook, and Twitter, the
company will be able to lay catchy eye photography that will link the viewers straight to the app.
Uber should as well have to promote their app on platforms such as google play and the apple
store. Invite a friend policy should also be embraced with offers such as commission on rides
with each successful referral. This will entice new customers into the company. (Gillin, 2008)
(Heinze, et al., 2016) (Krey & Rossi, 2017) (Parker, et al., 2016)
Product efficiency
Uber should aim at providing first-class services. This is by using cars that are in
roadworthy conditions and providing the most appropriate travel conditions as per to the
customer preference. The user application should be modified to retain the user history for future
reference. The company should also monitor driver hiring process to ensure that all drivers are

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qualified and have all relevant documents and qualification with reference to the terms of
service.
Pricing
Updates should be made on the Uber app to enable the customer to see the price before
making a transaction. Surge prices imposed on the customer should as well be done away with so
as to help maintain the level of customer satisfaction by maintaining a consistent rate of fare rate
based on the location. This will keep customers coming back.
Maintaining the legal standards
The company should focus on maintaining the legal legislation required in each field of
operation. This is so as to avoid unnecessary fines by running illegal operations. The company
should ensure they follow the appropriate procedures to venture into new states. This will also
avoid the risk of having to keep their workers at risk with the authorities.
Distribution
Increasing Uber drivers will decrease the waiting time thus meeting more customer
needs. Uber should as well expand its ventures to new countries, states, and cities. This strategy
will enable reaching of more customers and increase the efficiency the efficiency of the entire
Uber system.
Office accessibility
Uber should put up offices in areas of operation to provide physical customer care service
to the drivers as well as customers in the region. This will help boost customer confidence in the
company. It will as well make work easier in the hiring of new drivers and solving of customer
complaints at the primary level.

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Security
Uber should be able to monitor the flow of the enterprise. Fitting cars with CCTV and
GPS tracking devices, and a standby security team to respond to quickly to calls of distress by
drivers. This will ensure the safety of customers and drivers thus promoting the competitiveness
of the company.
Driver company relationship
Drivers should be given consideration in terms of commissions allocated. The driver
representatives should seat with the management and decide on an appropriate rate that is
acceptable by both the drivers and the company. This will reduce the time wasted during protests
and labor strikes.
Conclusion
This paper was aimed at exploring the overall structure of the Uber company and relating
it to the successes and challenges in its ventures. Focusing on the environments of the business
we are able to come up with a perfect design of a business plan to tackle the challenges in the
company and drive it to the future as the dominant digital taxi service provider.
Uber has proven to be a highly successful company although lately, it requires an image
adjustment of its public perception. The solution is, however, to highlight on the strengths of
Uber so as to salvage its diminishing image. Having major car sharing competitors, Uber needs
to step up the ladder of marketing and prove that all is still on track to its potential and loyal
customers. They have to lay down proper strategies to protect their drivers and customers by
providing the best services.

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By embracing a good marketing structure, the company is set to continue to grow and
achieve greater standards. Uber should ensure that more people are aware of the brand each day
and should do their best to maintain the brand name. Uber is set to ensure the best ride for
everyone in the vision of becoming the most dominant digital taxi service provider in the future.
(Fraisher & Bensoussan, 2015)
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