Uber Case Study: Strategic Analysis of Resources, Environment, Issues

This case study provides an in-depth analysis of Uber, a high-tech transport company established in 2009. It examines Uber's internal resources and external environment using SWOT and PESTEL frameworks to determine its competitive position. The study identifies specific issues faced by the organization, including driver treatment, background check failures, and unethical practices. Alternative courses of action are proposed to address these problems, such as improving driver welfare, enhancing recruitment processes, and managing passenger safety. The best solution, focusing on recruitment and selection improvements, is recommended for implementation. The study concludes by emphasizing the importance of managerial involvement in addressing Uber's challenges to regain its competitive advantage and maintain passenger safety. Desklib provides access to similar case studies and solved assignments for students.

Running head: Case Study of Uber
CASE STUDY OF UBER

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Table of Contents
Introduction......................................................................................................................................2
1. Analysis of internal resources and external environment for determining its competitive
position............................................................................................................................................2
2. Specific issues faced by organization..........................................................................................5
3. Alternative courses of action the organization can consider managing each of the problems:...5
4. The best solution and recommendations for implementing chosen strategy...............................7
Conclusion:......................................................................................................................................8
Reference list:..................................................................................................................................9

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Introduction
With its establishment in 2009, Uber has emerged to be a high tech company in the transport
industry with the technology of the right sharing application. It was also considered to be the
highest valued transport business when the company has offered its services to over 200 cities in
about 53 countries. By 2015, the company had been valued at the US $40 billion, and it was
observed that the company had yearly revenue of about $10 billion in 2015 (Cramer & Krueger,
2016). It is important to understand the internal resources and the external environment of the
company in order to determine its competitive position. It is also essential to determine the
problems being faced by the company and recommend measures that can be adopted for its
improvement.
1. Analysis of internal resources and external environment for determining its competitive
position
In order to reflect on the internal sources, SWOT analysis tool shall be effective to understand
the strengths and weaknesses of Uber as well as assess its opportunities and threats.
Strengths:
 It is a well-renowned brand and has high
service standards with verified cars and
drivers.
 It has unlimited vehicle fleets, and the
regular service regulations of taxi are not
applicable for the Uber cars
 It has low operational cost and is dependent
upon the driver and customer interaction
Opportunities:
 The traditional cab system has become a
dissatisfied factory for the customers due to
the high prices and long wait time
 There are opportunities for chatting on the
growing markets in the Suburban Areas,
where there is a lack of availability of taxi
services (Means & Seiner, 2015).
 Increased Uber driver shall reduce the
arrivals estimated time and the valuation of

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 The cashless system of payment and little
competition faced by Uber with tracking
facilities and dual rating system has
enhanced the safety and trust factor in the
company
Uber should also increase
Weaknesses:
 The business model can be easily imitated,
and the relationship between the drivers
and the Uber Company has often been
ethically questionable (Bales & Woo,
2016).
 The incentives for the customers to stick to
over is also low
 There have been issues of unpredictability
in the business model and privacy concerns
raised by the customers.
Threats:
 Drivers are dissatisfied with a low-profit-
margin that can lead to their
discouragement
 Self-driving Cars can be a real threat to the
demand for Uber cars
 With the introduction of new drivers in
new markets, there are threats of scandals
and frauds that might have a negative
impact on the brand reputation of Uber
(Rogers, 2015).
For the assessment of the external environment of the PESTEL analysis Framework shall be used
in this study:
Political factors: In its initial stage of development, the company had faced various
controversies as it did not have theory regulations with regards to insurance and responsibility. It
had also faced scrutiny such as charges were filed against Uber by France for its advertising and
in Netherlands; Uber faced rulings for its drivers not possessing taxi license (Means & Seiner,
2015). There has also been political discussion regarding the minimum wage laws in the industry
not being followed by Uber.

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Economic factors: The operation of Uber is in a sharing economy where there is a sharing of
intellectual and physical resources (Posen, 2015). Many countries have banned Uber as it leads
to an increasing competition faced by the regular taxis. They have been a debate about whether
the growth of Uber shall add more employment opportunities, or it will affect the existing
employment rate in the taxi industry.
Social factors: The growth of Uber has been attributed to the support it has received from the
customers as it is an easily accessible platform for travelling. It is convenient to book an Uber car
and track the pickup time and the drop timing by launching the application of Uber on the
smartphones (Hall, Palsson & Price, 2018). Word of mouth promotion has been the secret for the
success of Uber.
Technologicalfactors: The spread of Uber's popularity had a strong influence on social media. It
has been used as a promotional technique, where individuals share their riding experiences on
the social media sites that have been a source of encouragement for the other travellers.
Technology lies at the core of the operations of Uber as the booking is made through the
application, and the customers can also track the driver's location through the GPS network. The
application is the backbone of the company. If the application is not connected to a phone having
a 4G network, then it cannot be operated.
Legal factors: UBER has faced constraints in different locations due to its weak regulatory
background and employment laws.
Environmental factors: The impact of Uber on the environment has been increasing, and it has
often been criticized for the increased level of traffic condition and higher fuel usage (Li, Hong

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& Zhang, 2016). It has often been realized that Uber has promoted the use of private
transportation over public transportation that is adding to the level of pollution.
Figure 1: Competitive Advantage of Uber in Operational Market
(Source: Uber Revenue and Usage Statistics, 2019)
2. Specific issues faced by an organization
From the analysis of the case study, the following issues have been identified:
 Uber functions as a provider of right sharing services, and hence, it has treated the drivers as
independent contractors and not employees for which it has been dragged into lawsuits by the
drivers on various occasions. There have also been acquisitions of poor treatment of the
drivers with 20% earnings of the driver to be deducted by the company if the drivers are
unable to manage the minimum wage (Bales & Woo, 2016).

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 Uber has failed to check the background of various drivers, who had a history of criminals
records charged on various grounds. This shows the disregard of the company towards the
safety of the customers.
 Uber has often been questioned on its practices being unethical. There was an attempt to
embezzle the drivers of lift by hiring an independent contractor. It has appointed Uber
operatives to influence Lyft drivers to work for Uber that is considered to be malpractice
(Wallsten, 2015).
Figure 2: Market Share of Uber
(Source: Launch Everywhere—How Uber Won 450+ Markets – OneSky, 2019)
3. Alternative courses of action the organization can consider managing each of the
problems:
In the era of competitive rivalry, Uber has faced issues in relation to disruptive technologies.
Uber technology needs a skilful hand to deal with the issues and problems on riding management

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and other important areas. In the opinion of Matsui (2019), TNC companies such as Uber were
not technically considered to be direct competitors. Handling of technology in the proper manner
is considered as an important process for dealing with the organizational objective of
management and consideration.
While considering the driver treatment problem in the company, it has been found that they are
not given basic facility like other employees. As opined by Martinez (2019), the Uber driver did
not have minimum wage facility, overtime payment, unemployment insurance and the protection
on the discrimination. By giving their medical insurance, employee insurance facility and health
and safety protection, the problem can be resolved. Apart from this, it can be said that the issue
can be resolved if the policy guideline of Uber company can cover all the employee welfare
process like all other company did for employee management.
In the opinion of Matsui (2019), recruitment processes of Uber also have issues which have
negatively impacted the organizational popularity. Inadequacy of background checking before
recruitment has a negative impact as many of the passengers faced troubles in regards to the
safety factor. Drivers are involved in criminal activity can be removed by proper recruitment and
selection strategy. Before employment, the management authority has to be effective enough to
check the driver's background. The procedure has a positive impact as the possibility of a
criminal offence will become less. In the recruitment and selection process, it is necessary for
the management authority to have documentation process within the concern of the local police
station. By this process, passenger's safety can be managed very properly.
As per the study of Kidd (2019), in the management of driver’s refusal problem, necessary steps
can be taken by the authority. Under the Americans with Disabilities Act (ADA), drivers are

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penalized who refuse to accept the ride of the wheelchair passengers. In case of any misbehavior
with the passengers, driving license of the driver should be rejected. To manage issues on the
passenger’s health and safety, suitable and necessary steps should be initiated by taking a strong
decision.In the opinion of Matsui (2019), there must be the helpline number where the
passengers can complain regarding any issues while riding. By this process, the possibility of
passenger’s health and safety management could be managed effectively.
In the opinion of Schmidkunz et al. (2019), undermining Competitors issues of Uber can be
resolved by giving more training to the drivers. It is very much necessary for the management
authority to enhance the communication skills of the drivers so that they can cooperate with the
passengers very properly. Assessment of the driving skills is also an effective way of reducing
road accident where involvement of the skilled driver in the company has a suitable impact on
the organizational development process of management and operation.
As opined by Leenes (2019), UBER has stressed on the incentive issues of the drivers, which
may be affected by the management process and financial factor. It is necessary for the company
to set out a daily ride target. Likewise, the incentives shall also be given to the employees
accordingly. By this process, the financial issues and incentive issues may be reduced.

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Figure 3: Operational Strategies of Uber
(Source: Uber Strategy Teardown: The Giant Looks To Autonomous Future, Food Delivery, and
Tighter Financial Discipline, 2019)
4. The best solution and recommendations for implementing the chosen strategy
As per the study of Agyeman et al. (2019), driver’s cancellation of wheelchair riders and other
physically challenged riders can be considered as an important factor that should come under
scrutiny. In the course of action, drivers must be penalized so that the company can build a
trustworthy relationship with the passengers. The solution is very much effective for the
company to regain its competitive advantage in the market place.

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Recommendations can be given on the chosen strategy for recruitment and selection. Among all
the possible alternatives, the recruitment and selection issues are more concerning as it deals
with the safety factor of the passengers. It is very necessary for the Uber authority to be careful
about the background of appointed drivers. Drivers having any criminal activity in future must
be rejected to maintain passenger’s safety. This solution is impactful as it helps to maintain a
suitable relationship between the passengers and the company. The level of client’s attraction in
the company becomes very high in this course of action. The most significant factor is that the
financial crisis of Uber in recent years can be managed very properly.
Conclusion:
While concluding the study, it is noted that Uber’s problem can be managed if there is suitable
involvement of the managers to take the issue into account. The management problem can be
mitigated by the implication of effective recruitment and selection strategy. By giving medical
insurance, employee insurance facility and health and safety protection, passengers safety issues
can be managed very correctly. Adequate facility to the drivers for regaining their motivation
towards the work can be an essential factor.The provision of employment benefits to the drivers
will allow the company to gain supremacy in the competitive market.

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Reference list:
Agyeman, S., Kwarteng, R. A., &Zurkalnaine, S. (2019). Principal component analysis of driver
challenges in the shared taxi market in Ghana. Case Studies on Transport Policy, 7(1),
73-86.
Bales, R. A., & Woo, C. P. (2016). The uber million dollar question: Are uberdrivers employees
or independent contractors. Mercer L. Rev., 68, 461.
Cramer, J., & Krueger, A. B. (2016). Disruptive change in the taxi business: The case of
Uber. American Economic Review, 106(5), 177-82.
Hall, J. D., Palsson, C., & Price, J. (2018). Is Uber a substitute or complement for public
transit?. Journal of Urban Economics, 108, 36-50.
Kidd, J. (2019). Who's Afraid of Uber. Nevada Law Journal, Forthcoming.
Launch Everywhere—How Uber Won 450+ Markets - OneSky. (2019). Retrieved from
http://www.oneskyapp.com/blog/uber-global-expansion/
Leenes, R. (2019). Regulating New Technologies in Times of Change. In Regulating New
Technologies in Uncertain Times(pp. 3-17). TMC Asser Press, The Hague.
Li, Z., Hong, Y., & Zhang, Z. (2016). Do ride-sharing services affect traffic congestion? An
empirical study of uber entry. Soc. Sci. Res. Netw, 2002, 1-29.
Martinez, G. (2019). The Constitutional Risks of Ridesharing: Fourth Amendment Protections of
Passengers in Uber and Lyft. FIU Law Review, 13(3), 551.

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Matsui, S. (2019). Is Law Killing the Development of New Technologies: Uber and Airbnb in
Japan. BUJ Sci. & Tech. L., 25, 100.
Means, B., & Seiner, J. A. (2015).Navigating the Uber economy.UCDL, Rev., 49, 1511.
Posen, H. A. (2015). Ridesharing in the sharing economy: should regulators impose Uber
regulations on Uber. Iowa L. Rev., 101, 405.
Rogers, B. (2015). The social costs of Uber. U. Chi. L. Rev. Dialogue, 82, 85.
Schmidkunz, M., Schroth, O., Zeile, P., &Kias, U. (2019, April). Road Safety from Cyclist’s
Perspective. In REAL CORP 2019–IS THIS THE REAL WORLD? Perfect Smart Cities vs
Real Emotional Cities. Proceedings of 24th International Conference on Urban
Planning, Regional Development and Information Society (pp. 597-604).CORP–
Competence Center of Urban and Regional Planning.
Uber Revenue and Usage Statistics (2019). (2019). Retrieved from
https://www.businessofapps.com/data/uber-statistics/
Uber Strategy Teardown: The Giant Looks To Autonomous Future, Food Delivery, And Tighter
Financial Discipline. (2019). Retrieved from
https://www.cbinsights.com/research/report/uber-strategy-teardown-expert-research/
Wallsten, S. (2015). The competitive effects of the sharing economy: how is Uber changing
taxis. Technology Policy Institute, 22, 1-21.