Challenges and Marketing Strategy of Uber

This report analyses the challenges faced by Uber, including taxes, government regulations, and international expansion. It also discusses Uber's market segmentation, targeting, and positioning strategies. The report further examines Uber's marketing strategy, including referrals, feedback, and special offers. Finally, the report provides recommendations for improving the HR department and training.

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Introduction
Every company faces many challenges in running the various departments or in changing the
policies. These issues affect the productivity and growth of the company. To reduce the
issues a company makes the strategy to gain the competitive advantage or to grab the high
market share. Marketing strategy is a forward-looking and long-term approach to attain the
high competitive advantage. The main objective of market strategy is to achieve the company
goal as on the basis of company goals these marketing strategies are made. In this report,
Uber has been taken into consideration to analyse the issues and strategy of the company.
Uber is a transportation network company which operates in peer-to-peer ridesharing, food
delivery, and taxi cab. It operates in 785 metropolitan areas in the world; its platform is
designed through websites and mobile application. Riders are also founded by the mobile
application (Uber, 2018).
At the beginning of the report, issues faced by the company will be discussed. After that,
market segmentation, target, and positioning of the company is analysed. At the end of the
report, marketing strategy will also be analysed to reduce the issues and attain the higher
market share.
Challenges faced by Uber
Taxes
Uber is a technology company which connects the driver and the rider. It is the responsibility
of the driver to pay taxes but the government claims the amount of taxes from the company.
According to the government, the entire ride payment is the revenue for uber that’s why uber
is liable to pay taxes. The company charges the tax from the drivers or the riders by increases
the ride fares. Due to more pressure or loss; the company has stopped the services in some
particular cities or states.
Government Challenge
The company faces an incredible risk at the time of working in cities or countries. There are
some cities and countries in which Uber cabs are banned such as American cities. In
America, the government took steps towards the industry and declared the car-shipping

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application illegal. Airport authorities banned Uber drivers to drop-off the people, the
authorities charge extra fees to drop-off and pick-up the customer at the airport (The New
economy, 2015). The extra fees paid by the drivers and the company increases the fare of a
ride for the riders, which decreases the competition as compared to the traditional taxis. The
government authority randomly bans the services which makes difficult conditions for the
drivers as well as the company (Hall, and Krueger, 2018). It is a governmental issue which is
faced by the company.
International expansion
The company faces issues while expanding the business at the international level. It increases
the operational risk of the company such as Asia has more taxes because of the large
population as compared to America. It increases the competition between the cabs and
traditional taxis (The New economy, 2015). It has been seen that in expanding the business in
Asia the company had to face tough competition by reducing the fair value of ride. The
company can easily expand the business but it is difficult for the drivers to compete against
the traditional taxies which have high brand value as compare to the Uber companies in Asia
(West, Ford, and Ibrahim, 2015).
Segmentation, targeting, and positioning
Segmentation divides the population into groups according to behaviour and nature; targeting
is process of selecting a specific group to influence or to sell the whole products. Positioning
is the selection of marketing mix which is more suitable for the target customer segment.
Uber targets all age of people with the different services; the company offers different
services to the different types of people such as Uber X, Uber Pool, and Uber XI for the cost-
saving customers. Uber Premium is also offered by the company to the customers who can
easily afford and did not mind to pay more (Research Methodology, 2018). Below table
provides a clear picture of Segmentation, Targeting and Positioning strategies of Uber:
Types of
segmentatio
n
Segmentation
criteria
Target customer segment
Uber Pool, Uber Uber Access

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Uber XI
Uber X,
Uber Moto,
Premium,
UberEATS,
Uber Go,
UberRUSH
Uber BOAT,
Geographic Region New Zealand
Australia,
Asia, Africa
North &
South
America
Europe,
Uber AUTO
– Bangalore
and Pune
only
North &
South
America,
Europe, New
Zealand
Asia, &
Australia,
Africa
New Zealand
Australia,
North &
South
America,
Asia,
Europe, &
Africa
Demog-
raphic
Age 18+ 25-65 45-65
Gender Males &
Females
Males &
Females
Males &
Females
Occupation Students,
professionals
, employees
Employees &
Professionals
Retired &
Handicapped
Behavioural Benefits
sought
cost-
efficiency
sense of
achievement
convenience
Riders status non-users,
first-time
users,
potential
users, regular
users
first-time
users,
potential
users, regular
users
non-users,
potential
users
Psycho- Social class middle class, middle class, middle class,

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graphic and Lower
class,
and upper
class
and upper
class
According to the above table, it has been seen that the company sets the target as per the
customer behaviour. The company offers the Uber X, Uber XI and Uber pool to the lower
and middle class who can easily afford the fare. These cabs also travel everywhere where the
company is operating. These rides are especially for those who are of age of 18-25 because at
this stage students and employees are struggling for the successful career. The other rides
offered by the company to the high-class people who can easily pay more. Usually, these are
the settled people or handicapped which can pay more but need a high level of comfort. The
company target all age people with the different level of category (Uber, 2018).
Market strategy of Uber
Referrals
The company gives the opportunities the people to ride free by referring the application to
friends. The company provides money-get-money offers in which the first timer gets the free
ride to try the services. It is a marketing strategy of the company to attract the more
customers towards its services. It helps the company to get the high market share by
increasing the demand of customers (Weinstein, and Winston, 2016). It has been seen that the
company earned high profit from which it can easily pay tax amount. It reduces these issues
of the company; not only the company but also the customer gets the advantage of the
services of the company. The company also offers the incentives to the drivers so that the
relationship with drivers and riders are maintained. It further reduces the international
competition or can easily enter the new area (Lawton, and Rajwani, 2015).
Feedback
There is one major difference between the traditional taxies and Uber cabs that the cabs have
a rating system for both drivers and passengers. Drivers are highly motivated by their ratings,
and the passenger gets the extra benefits on high stars. This system helps to promote trust
between the driver and riders, so the risk of losing a customer due to high fare is reduced. The

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company also takes the advantage of the customer review; it can solve the complaints of a
customer which attracts the more customers and beat the competitors (Marketing, 2018).
Special offers
Uber always launches new special offers; groups of people around the world enjoy these
services. It delivers the services from the kitchen to offices and other times. It also offers the
ride to a passenger with the celebrities to promote the services of the company. People are
attracted towards the rides just because of benefits provided by the company and to meet the
celebrity. These surprise and delight tactics work on loyal customer and generate the positive
attitude within customer mind towards the company and drivers (Nagle, and Müller, 2017).
This helps the company to compete with the competitors by building the strong brand image
in the market. This strategy also reduces the government risk because higher demand of
customer created trust and strong relationship of customers with the company. The
government could not ban any kind of beneficial services for the customer (Alstyne, Parker,
and Choudary, 2016).
Recommendations
Record of Human resources
From the above analysis, it has been recommended that the company should adopt tracking
systems so that the company can easily track the complaints of riders and improve the
services. The company has to use the appropriate tool which tracks the complaints and record
of the employees’ data (Fritz, Tilahun, and Dugas, 2015). It is observed that the record of
employee improves the productivity of the company.
Training
It is said that the employees are the main assets of the company. It is necessary for the
company to hire the excellent employees to achieve high market share. Drivers and
employees of the company are selected by the HR department. It is the responsibility of the
department to select the appropriate candidates. The company has to provide the best training
to the Human resources department; so that they can conduct the inclusive interview. Senior
leaders, HR staff, and managers have to train to build the strong relationships and encourage
the new ideas.

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Conclusion
From the above analysis, it has been concluded that Uber connects the people to travel from
one place to another. The company’s main aim is to connect cities and people; it uses the
transportation to achieve the objective. Uber faces many issues such as high taxes,
government risk, and others. The company sets the target, segmentation, and positioning to
gain the high revenue and attracts more customer towards the company services. The
company makes marketing strategy to reduce these issues and gain the competitive
advantage. These strategies mainly include referrals, providing special offers, and many
others. Marketing strategy helps the company in building the strong relationship with the
customer and increasing demand. It has been recommended that the company has to record
the data of the employees or to adopt the technological software which will help the company
to track the customer complaints. It is observed that the company will expand the business at
the international level in a few years.

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