Strategic Audit and Recommendations for Uber's Future

This management report provides a strategic audit of Uber, highlighting the issues faced by the company and recommendations for its future. The report suggests concentrating on core business, entering into strategic partnerships, launching social media campaigns, hiring professional drivers, using reasonable cars, and growth through acquisition.

INDIVIDUAL
MANAGEMENT REPORT

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
MAIN BODY..................................................................................................................................3
Strategic audit of Uber.................................................................................................................3
Strategic actions to be recommended to Uber for the future.......................................................5
Critical Reflection............................................................................................................................8
REFERENCES..............................................................................................................................10
Books and Journals....................................................................................................................10
Online........................................................................................................................................11

EXECUTIVE SUMMARY
Uber is one of the key talking point since its inception where its on-lookers alike and
value investors are arguing that the company has failed to produce a quarter that can be termed
as profitable since the day it began its trading publicly. Despite the company has changed the
face of transportation, the company is facing issues in turning a profit due to the three major
reasons:
Spiraling costs is one of reason for the failure of Uber. The company has shifted the load of
taxi’s operating cost on the head of drivers but still its costs are massive because of constant
expansion on geographic basis (Albats and et.al., 2020). Accordingly, huge amounts are required
to be devoted for setting up themselves in new market offering unique challenges. Also, the
company has spent hundreds of millions of dollars in an attempt to drive out the competition.
Beside this, there are instances of unregulated corporate spending on lavish parties, office
renovations and company events.
Mistreatment of employees is another issue hampering the success of Uber is its corporate
workforce which can be featured as aggressive and competitive one. Unethical culture within the
company results in resigning CEO and co-founder in 2017
Diworsification in case of Uber means putting all the eggs in one basket was never found to be a
good idea, the same mistake Uber is doing by trying to venture in food delivery (Uber eats), self-
driving cars and a freight service (Uber Freight). By doing so, Uber is not able to concentrate on
this core business and turn a profit (Maijanen, 2020).
Accordingly, in this report the several recommendations for the future of Uber such as
concentration on core business, entering into strategic partnership with suppliers, launching
campaign through social media platform, hiring professional drivers & providing training, Using
reasonable car instead of fancy car, growth through acquisition and hiring local taxi service
provider.

MAIN BODY
Strategic audit of Uber
As per the arguments of Uber’s investors, the company has not produce even a single
profitable quarter since the time it began to trade publicly. In 2019, the losses incurred by Uber
amounted to $8.51 billion while in the year 2020 the losses continued to take place and
amounted to $6.77 billion. However, the company has experienced an increase on year on year
basis until the emergence of coronavirus pandemic. Uber has reported gross bookings of 18.13
billion dollars across the globe in the fourth quarter of 2019 where the gross booking dropped to
10.22 billion in the wake of second quarter of 2020. The net revenue of the company in 2019,
2020 and 2021 was found out to be $13, $11.14 and $17.46 billion US dollars respectively (Uber
Technologies- statistics & facts. 2021). However, the issue of spiraling costs, the net income in
2018 was positive and amounted to 997 million US dollars but the year onwards that is, in 2019,
2020 and 2021, the company has incurred net loss of $8512, $6788 and $570 million US dollars.
On evaluating the current business situation of Uber, the following particulars have been
identified indication organizational and market activities of the company:
Increased service range: In an attempt to fulfill the needs of large number of customer, Uber
has attempted to offer extensive services through its core business segment (Ketchen Jr and
Craighead, 2020). This is even giving the company a competitive advantage. The rides are
differentiated on several grounds such customer’s purpose, occasion and budget and accordingly,
they can choose from Uber X, Uber Go, Uber MOTO, Uber Pool and many more other rides.
The consistent increase in range of services is resulting in additional cost to the company along
with effective contribution towards its bottom line.
Extensive growth through acquisition: Uber has adopted the strategy of acquiring adjacent
businesses even in a great troublesome period resulting from the advent of pandemic Covid – 19.
The several acquisitions undertaken by Uber in a recent period includes the acquisition of
Careem (a vehicle hire company), Postmates (food delivery service), Autocab (Taxi booking &
dispatch software) and Routematch (transportation technology firm). This has led to huge
commitment of funds by the company and thus causing the issue of spiraling costs. Also, the
core business of the company is getting hampered (Albers and Rundshagen, 2020).

Climbing up on the cost of bad reputation: The company is in the news for toxic workplace
environment. The internal management is so poor where employees used to post about
discrimination and harassment faced from superior management. Due to this, many of its
employees are recently urged to move to its closest competitor Lyft. Accordingly, the company
is losing its valuable resources in the hands of its competitors which if satisfied and retained
reasonably, then the company could be benefitted in terms of sustainable competitive advantage.
Strategic actions to be recommended to Uber for the future
Concentration on core business: Core business of Uber involves the provision of ridesharing
services and the company needs to concentrate on this business segment much in order to ensure
effective services to customers, so that customers can build trust on the brand which in turn
would benefit the company in ensuring high level of customer loyalty (Čmolík, 2021). Currently,
the company is facing financial issues because of diverting its funds to different business
acquisitions where some of these business is even failing like the one was Uber eats. By going
this way, company is incurring losses and costs. Therefore, by adopting the restrictive growth
strategy, the company could concentrate on its core business along with expanding its operations
through acquiring business in a restrictive manner by ensuring that they would be able to
generate profits out of the new venture. This is possible through conducting feasibility study
before implementing any decisions related to acquisitions.
Entering into strategic partnership with its suppliers: strategic partnership allows for
establishing a relationship between two organizations which facilitates sharing of resources
among companies which helps in getting succeed. While going for strategic partnership,
companies like Uber can be benefitted in terms of sharing risks & rewards arising out the
decisions taken by both the business jointly. Uber can do partnership with local tax businesses or
the providers of riding services or any other businesses that are currently acting as their supplier.
By doing so, Uber could be benefitted in terms of producing services in an efficient manner
(Kabeyi, 2019). This in turn, would lead to reduction in the operating cost of the company
because strategic partnership would allow the company in obtaining resources at reasonable
costs. Also, strategic partnership would be a great option for Uber while acquiring businesses
because the risks associated with new venture gets shared among partners along with losses
arises on account of negative consequences. So, Uber can continue with its extensive growth

strategy commonly known as “diworsification” by committing resources in a restricted manner.
Also, this way the company could concentrate on its core business better than the current
situation within it.
Launching campaign through social media platform: In the highly competitive environment
of the contemporary world, it is necessary for the companies to adopt digital marketing strategy.
One of the way to market digitally is the social media platform. Within this platform, companies
are can even customize its marketing efforts and can target different audiences in a differentiated
manner (Amankwah-Amoah, Khan and Wood, 2021). With regards to Uber, it would be
recommended that it should concentrate on its goal of reaching its target audience through social
media campaigns by displaying its new offers at a very low cost on these platforms. What Uber
needs to do is to launch a new social media campaign, so that it could ensure greater brand
awareness among its target audience about the new offers the company is coming up with. This
would facilitate efficient provision of information to customers about the new rides immediately
because the modern customers are very much social media addicted along with trying to imitate
what their followers and fellow members are doing. Through social media platform itself, the
company can unveil the new applications through which their customers can book riding and
access information about different rides & offers of the company. Also, Uber can share its
economy plans through social media platforms by stating the names of places & cities where the
cheap fares are applicable.
In this way, Uber can ensure cost efficient marketing and targeting of its potential
customers leading to major savings and greater reach to its target audience.
Hiring local taxi service providers: It would be the best strategy for Uber if it would go for
hiring local tax drivers. Hiring locals for getting services associated with their native places is
always a better strategy because locals are aware of rules, trends, laws and customer preferences
with respect to their locality (Nair and Blomquist, 2019). Local service providers are able to
better abide by the laws and regulations imposed by their respective governments with regards to
driving, taxi services, charges & fines, etc. Uber is required to encourage local taxi service
providers to join their platforms by indicating them how it would be advantageous for them to
join the company’s platform than continuing with their current operations. Also, for hiring local

taxi drivers, Uber is required to offer attractive incentive plans. Accordingly, the company would
be able to maintain its growth along with becoming a leader in world of taxi business.
Hiring professional drivers & provide training: It is advisable or recommendable to the
human resources management of Uber company that they should hire professional driver for the
purpose of driving cars. It is because it is identified that the one of the reason behind the failure
of Uber in past three years is unethical behavior of Uber driver. It is identified that Uber drivers
are unprofessional the impact of which they face risk when working in cities as well as countries.
Many a time drivers of Uber company fails to comply with the traffic rule as well as airport rule
the impact of which they need to pay fees which the company ultimately charge from the
customers (Khandakar and Hosain, 2021). This unethical behavior of the Uber driver has causes
failure to company. Thus, it is recommended to the organization that they should hire
professional driver for their services with the help of adopting the strict recruitment process or
strategy. Not only that, it is further advisable to the company that they should conduct training
session for their employee frequently in order to enhance their personality as well as legal
compliance understanding.
Using reasonable car instead of fancy car: Further, it is also recommended to Uber
owner that they should hire use more reasonable cars which are low in cost for their customer of
different country rather than using fancy cars. It is because using the fancy cars for the lower or
middle income customer is useless for the company as it ultimately increases the price of their
services. The customer unable to afford high prices of ride services which ultimately result into
the low customer base and sales of the company (Ker and Liu, 2022). Hence, using reasonable
cars helps the management of Uber company to grow its customer base as well as sales in the
upcoming 3 to 5 years. Not only that, it also helps the company to reduce its cost of service. The
ultimate impact of which the sales as well as the profitability of Uber will enhance in the
upcoming three to five years. The reason behind suggesting this strategic action to Uber
company is that it helps the company to manage its internal performance of the business and
reduce the cost of service through training as well.
Growth through acquisition: The acquisition and merger is also one of the most
significant strategic action for the company through which they are able to grow or develop its
business in the next three to five year. Under this strategic action, it is advisable to the

management of Uber company that they should acquire its competitors one by one rather than
just expanding its operation and services category. It is because competitors are one of the major
factor that affect the business more as compared to any other factor. The company should make
sure that they have close eyes towards its competitor’s action and whenever their competitor
faces any liquidity problem at that time Uber should acquire its competitor. This strategy is not
new but the most effective strategy for the company to grow its business all over the world rather
than starting new operation (Valdez, 2022). It is also important for Uber that they should manage
finance for the company so that they can ultimately enhance the sales as well as profitability of
the business. Thus, it is recommended to Uber that they should utilize different sources to raise
funds as well as implement money management system within the organization to arrange
money for competitor’s firm’s organizations.
Critical Reflection
While preparing the management report, I have learnt various new concepts and
information about the organization and business management. The preparation of management
report has also helped me to identify the organization which are successful and unsuccessful in
the past year. The impact of which my research skill has enhanced. The development and
improvement of my researching and critical thinking skill is basically result of the management
report I have prepared. It is because the management report is practical which has enhanced my
practical understanding skills. While doing the strategic audit of the organization I have selected
for this report, I have able to know about the financial information that reflects the performance
of company (Bacanin and et.al., 2021). The impact of which my financial concepts
understanding has been also enhanced. Further, my prioritization as well as the multitasking
skills has also enhanced due to this project. It is because in order to do this project I need to
explore the different tasks and prioritize it on the basis of importance and marking criteria. I have
spent more time in completing the task of the assessment which contain highest marking criteria.
The impact of which I am able to complete my assessment on time.
However, on the other hand, beside of learning different things, I have also face some
difficulty while doing this assessment or report. Firstly, I have face difficulty in identifying the
issues that particular selected organization have faced due to which their businesses got failed.

Further, I have faced difficulty in selecting the articles and sources from where I can write
content of this report. My poor writing skills has causes this challenge for me the impact of
which I am unable to create high quality content in the report. But with the help of my classmate
I have done this after sometime. It is because my classmate has helped me how to identify the
sources which are good for my management report (Kang, 2020). The helping nature of my
classmate has helped me a lot with this project and I will also develop this skill in myself so that
in future I am able to develop a best and high quality report. Further, I have also face difficulty in
communicating because of my poor active listening skills. Because of mine poor active listening
skill, I am unable to listen my tutor properly which ultimately affect my assignment. So, I will
develop this skill in myself to complete the work in appropriate manner in future.

REFERENCES
Books and Journals
Albats, E., and et.al., 2020. Stakeholder management in SME open innovation: Interdependences
and strategic actions. Journal of Business Research, 119, pp.291-301.
Albers, S. and Rundshagen, V., 2020. European airlines′ strategic responses to the COVID-19
pandemic (January-May, 2020). Journal of air transport management, 87, p.101863.
Amankwah-Amoah, J., Khan, Z. and Wood, G., 2021. COVID-19 and business failures: The
paradoxes of experience, scale, and scope for theory and practice. European
Management Journal, 39(2), pp.179-184.
Bacanin, N. and et.al., 2021. Artificial neural networks hidden unit and weight connection
optimization by quasi-refection-based learning artificial bee colony algorithm. IEEE
Access. 9. pp.169135-169155.
Čmolík, J., 2021. Identification and Management of Positive/Negative Factors Influencing the
Implementation of a Business Strategic Plan.
Kabeyi, M., 2019. Organizational strategic planning, implementation and evaluation with
analysis of challenges and benefits. International Journal of Applied Research and
Studies, 5(6), pp.27-32.
Kang, J. M., 2020. Intelligent reflecting surface: Joint optimal training sequence and refection
pattern. IEEE Communications Letters. 24(8). pp.1784-1788.
Ker, S. K. and Liu, S., 2022. Uber Freight: Assessment and Determination of Optimal Design
Features for a Drop Trailer Service Offering and Network (Doctoral dissertation).
Ketchen Jr, D. J. and Craighead, C. W., 2020. Research at the intersection of entrepreneurship,
supply chain management, and strategic management: Opportunities highlighted by
COVID-19. Journal of Management, 46(8), pp.1330-1341.
Khandakar, S. A. and Hosain, M. A., 2021. Assignment on Strategic Management Practices of
Uber Technologies Limited.

Maijanen, P., 2020. Teaching the history of strategic management. In Teaching Strategic
Management. Edward Elgar Publishing.
Nair, S. and Blomquist, T., 2019. Failure prevention and management in business incubation:
practices towards a scalable business model. Technology Analysis & Strategic
Management, 31(3), pp.266-278.
Valdez, J., 2022. The politics of Uber: Infrastructural power in the United States and
Europe. Regulation & Governance.
Online
Uber Technologies- statistics & facts. 2021. [Online]. Available through <
https://www.statista.com/topics/4826/uber-technologies/#dossierKeyfigures>