ABS106 Business Model Report: Uber's Business Canvas Analysis

This report provides a detailed analysis of Uber's business model using the Business Model Canvas framework, examining key components such as value propositions, key partners, activities, resources, customer relationships, channels, customer segments, cost structure, and revenue streams. It f...Read More

Business Model Development

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
Business Model Canvas Components....................................................................................3
Business Model Canvas.........................................................................................................4
SWOT Analysis.....................................................................................................................5
CONCLUSION..........................................................................................................................5
REFERENCES...........................................................................................................................7

INTRODUCTION
In this report, Uber is taken as an organization, which is an American technology
company providing offering number of services which comprises of ride-hailing, food
delivery, freight transportation etc. The company is based in San Francisco and is having its
operations in more than 900 metropolitan areas all across the world. The rationale behind
selection of this organization is that Uber is one of the most prominent business platforms
and is also admired by various innovators and the entrepreneurs and is a front end to a great
business model. The success of the company is underpinned by its business model due to
which this organization is being chosen.
Business Model Canvas Components
a. Value Proposition
The key value proposition of Uber is the availability of exact rise that user wants and
in addition to this, it is on-demand from the App as there is no need to pre-order or book even
though there is a facility to do so if required during pick time (Business Model Canvas Uber.
2020). Uber provides reliable rides and further addition to this; the app also provides ETA of
the rise which makes it easy for the customer to select the ride. The prices are also very low
in contrast to other taxi rides.
b. Key Partners
The partners of Uber are considered very crucial as it involves the drivers who are
on the supply side of Uber and are essential to have sufficient in numbers. another important
partner is restaurants as the importance of Uber eats was highlighted during Covid-19 crisis
while Uber rides fallout or collapsed. The tech partners and the commercial partners were
also very important in order to ensure that the app is working properly or not and the creating
new channels to local markets.
c. Key Activities
As of now, Uber has accomplished large scale pertaining to the three main types of
activities which are operational excellence which involves reducing the safety risks which
occurs due to negative coverage (Andreassen and et.al., 2018). Next is continued expansion
into new countries and cities and the last is improving value proposition through the way of
providing cheaper rides by using Uber pool or express pool.
d. Key Resources
The most important asset is the active users and drivers followed by data assets
which involves capturing the data of users/ next is the technical data which helps in drawing

better insights about the users. Uber brand ranks 87 on the Interbrand Index having a brand
value of $5.7bn. it also has digital assets like User app, Driver pp, Uber Eats App, Uber Eats
Manager App etc.
e. Customer Relationships
In terms of making good relationship with customers, Uber has focused more safety,
security and the privacy of information of the people. Also, in order to main good relation,
the company has lowered its prices and the entire technical system is fully automated.
f. Distribution Channels
Uber makes use of social networking sites, promotions, heavy discounts on using
coupons and the mobile app as its distribution channels (Eisape, 2020). These channels create
a sense of initial awareness about the brand and makes it easy for customer acquisition.
g. Customer Segments
Uber has segmented the customers into two groups drivers and customers of all age
group above 18 in case drivers. It makes use of classic market segmentation as well as micro
segmentation.
h. Cost Structure
Uber incurs the amount in respect to platform development, hosting etc. In addition
to this, it incurs payment in respect to sales and marketing expenditure for grabbing
customers and expanding business. There are payments of salaries to employees and the
driver payment as well.
i. Revenue stream
Revenue is generated through three main sources, one is pay per ride charges, next is
surge pricing during pick times and the next is in respect to premium Uber brand.
Business Model Canvas
KEY PARTNERS KEY ACTIVITIES KEY RESOURCES
 Drivers
 Restaurant
 Tech partners
 Commercial partners
 Continued expansion
 Operational excellence
 Improving existing value
proposition
 Active drivers
 Data assets
 Technology assets
 Digital assets
 Brand
VALUE CUSTOMER RELATIONSHIPS CHANNELS

PROPOSITIONS
 Custom ride
 ETA prior to ordering
 Lower prices
 Cash free
 Taxi on demand
 Safety, security and privacy
 Pricing
 Highly automated
 Mobile apps
 Social media marketing
 Discounts, promo
CUSTOMER
SEGMENTS COST STRUCTURE REVENUE STREAMS
 Passengers of all age
group and medium to
high income group.
 Drivers
 Platform development
 Sales and marketing
 Salaries
 Pay per ride charges
 Surge Pricing
 Premium Uber brands
SWOT Analysis
Strength: The key strength of Uber is its key partners, distribution channels and
customer segments which is very strong.
Weaknesses: In terms of weakness, the revenue streams, customer relationship is its
core weaknesses as there have been incidence pertaining to the safety and security of the
travellers.
Opportunities: Uber has the chance to use driverless technology and other services, it
can start its own movers and packer’s services for the public convenience as they ae having
sufficient amount of resources (SWOT analysis of Uber. 2019).
Threats: The main threat is customer and employee retention due to rise in
competition. The lawsuits filed by Uber drivers against the company’s minimum wage
policy.
The one which might not work for long is that if Uber rides were not considerably
cheaper in comparison to the other taxi rides as the main customers groups are looking for
cheaper rides.

CONCLUSION
It can be concluded from the above that the business model of Uber is very unique
which makes it a perfect organization to study and is also very helpful for the students and
start-up entrepreneurs to gain an insight pertaining to how the business model is designed and
the reason behind the creation of such models. This report provides the how the Uber’s
business model canvas has helped it in attaining its desired goals and objectives and also
incorporates various key components which are essential to be accounted for. In respect to
the SWOT analysis, the major weakness of the company is in regard to its revenue stream as
it has always focused on providing cheaper which might not be possible in future.

REFERENCES
Books and Journals
Andreassen, T. W., & et.al. (2018). Business model innovation and value-creation: the triadic
way. Journal of Service Management.
Eisape, D. (2020). Comparing Platform Business Models: A Balanced Scorecard Approach
based on the Platform Business Model Canvas. Nordic Journal of Media
Management. 1(3). pp.401-432.
Online
Business Model Canvas Uber. 2020. [Online]. Available Through:<
https://innovationtactics.com/business-model-canvas-uber/>.
SWOT analysis of Uber. 2019. [Online]. Available Through:< https://bstrategyhub.com/swot-
analysis-of-uber-2019-uber-swot-analysis/>.