Uber Technologies: In-Depth Analysis of Business Model and Strategies

This report provides a comprehensive analysis of Uber Technologies, examining its business model, competitive environment, and growth strategies. It begins with an executive summary, followed by an introduction outlining the report's objectives, the context of the case study, and the rationale for the research. A literature review explores Uber's business model, competitive situation, and response to market dynamics. The findings and discussion section delves into the company's performance, supported by SWOT, Porter's Five Forces, and PESTLE analyses. The report identifies key challenges within the ride-sharing industry and offers strategic recommendations for future improvements, including addressing competitive pressures, optimizing growth strategies, and navigating regulatory hurdles. The report concludes with a summary of findings and recommendations, aiming to assist Uber in maintaining a competitive advantage and achieving long-term success in the dynamic business environment.

Running head: UBER TECHNOLOGIES
UBER TECHNOLOGIES
Name of the Student
Name of the University
Author Note

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Executive Summary
The Uber can be understood to be one of the largest business models present in the globe and
a story of success. The company currently operates in more than 60 countries and more than
300 cities. The focus of the report lies on the overall operations of Uber and determines the
manner in which the company can gauge long term success. The report follows a
comprehensive format whereby the Introduction is followed by the Literature review and the
findings and discussion. This paved way for the Recommendations and Conclusions as well.
In regard of this, the report aims to determine the various strategies and operations of the firm
by making use of various strategic models and tools which assisted in determining the past
performance. The recommendations can assist the firm in ensuring a competitive advantage
in the long run.

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Table of Contents
Introduction................................................................................................................................3
Literature Review.......................................................................................................................6
Findings and Discussion..........................................................................................................15
Recommendations....................................................................................................................20
Conclusion................................................................................................................................22
References................................................................................................................................23

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Introduction
The business organization can be understood to be considerably dynamic in nature
and it is with respect to this, that it becomes considerably important for the organization to
come up with considerable plans which will assure them and assist them to maintain a
competitive advantage in the long run (Aguinis, Edwards and Bradley 2017). The aim of the
report is to provide the overall performance of Uber and its overall business model. This
section on the Outline of the paper will state down the overall objective of the report, throw
light on the background of the company and describe the rationale of the study as well.
Context of the case study
Uber is a smartphone application for sharing the ride which pre-calculates the fare, the
estimation time of arrival as well as the offer to split the costs among the different riders as
present. When the ride is complete then the money must be paid. Although the idea which
Uber has come up with is fresh, however, the concept is not a new one and the older taxis
have been utilising this concept since very long. Uber became considerably popular in 2007
and has its operations around the globe. The simple mechanism and the profound business
model have made the company considerably popular throughout the world. Although the
organization receives considerable competition from local companies, it is still the most
preferred application (Lasserre 2017). The case study named: `Uber: Changing the Ways the
World Moves` is a case study which has been published in the Harvard Business Review in
the year 2017 and throws light on the overall performance of Uber in the business
environment. The case study provides a comprehensive insight into the origin of the
organization, the manner in which the application tends to work, the driver model of the firm,
the competition which the company currently faces and the battle relating to the publications
and the Public relations which is generally faced by all multinational organizations as present

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around the globe. The case study has provided an outline of the manner in which the
company has been responding to these forces which lie in the business environment and what
are the future projects which the company plans to undertake and how it will maintain its
competitive edge in the long run (Meyer, Neck and Meeks 2017). The project will look into
the manner in which using its strengths, the business will be successfully able to make the
business grow and certain recommendations will be based for its future.
Aim of the Research
The aim of the research can be understood to be the reason why any research is
generally carried out and it is with respect to this that, the aim of the report is to outline the
overall operations and business model of the Uber and to examine whether the firm will be
able to make use of its growth strategy in the long run and to provide recommendations for
the long run of the firm.
Objectives of the research
The objectives of the research can be understood to be as follows:
1. Analysing Uber’s business model
2. To assess the way Uber should address its competitive situation globally
3. To examine Uber’s growth strategy
4. To research, identify, and explain three critical challenges facing the ride-sharing
industry.
5. To provide recommendations with justification for future improvements for Uber
Rationale of the Study
The rationale of the study can be understood to be the primary reason why the
research is carried out and what usefulness will the study be able to fulfil. It is for this reason,

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it can be mentioned that in order to examine how Uber has been performing recently and to
undergo an analysis the performance of Uber and the future model of the business, it becomes
necessary to ensure that the competitive situation of the firm is examined critically. Hence,
the reason why this research is being carried out is to examine the long-term performance of
the firm which will then assist in determining how the company can develop long term
strategy to ensure firms operational efficiency in the long run (Lasserre 2017) After a
thorough analysis of the firm will be done, its operational efficiency will be reviewed and
certain recommendations which Uber can make use of will be prescribed in detail. This shall
assist in ensuring long term success and overall and additionally help uber to face the
challenges which lie on their way in the ride sharing industry.
Project Deliverables
The project deliverables can be understood to be as follows:
 The analysis of the Uber`s business model will be presented. This shall be backed by
the SWOT analysis of the company which will then help in understanding the
integrities of the business model of the firm.
 The competitive scenario of Uber shall be discussed. The Porters Five forces model
will be used accordingly to examine the competitive environment of the business.
 The growth strategy shall be presented and the analysis for this will be done using the
PESTLE analysis.
 Using the PESTLE analysis, the key challenges which will be faced by the firm will
be discussed and accordingly recommendations will be provided with respect to the
same.
 The recommendations will be backed by adequate justification which will ensure that,
their implementation can be carried out successfully.

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Literature Review
The business model of Uber
This business model of Uber can be understood to be very simple. However in recent
times there has been an advanced discussion about the destructive technological companies
with the move fast and break things model. The reason why these companies want to ensure
that they are being able to move fast is because the need of the customers have been changing
accordingly and based on these needs the company needs to come up with offerings which
will satisfy them (Meyer, Neck and Meeks ., 2017). A few of the companies have employed a
better strategy than Uber has been able to done for itself. Over the time there have been
frequent customer criticism about the surge pricing policy and it is still is battling
governmental regulations. The critics are under the belief that Uber is making an impression
which is against the legal system. In many states it is believed that they are running on robber
barons illegally and hence became a big thing by breaking all the rules.
Currently the company has more than 1 million active drivers and operates in more
than 60 countries and 330 cities around the globe the company is also valued higher at $51
billion which has made the young start-up more valuable than two-third of the company in
the Fortune 500 (Ansoff et al. 2018). The company is also been credited that it has to function
on demand economy in which the different people use their smartphones in order to book the
cab and engage with the connectivity distributed workforce.
The business model of Uber can be understood to be very simple. It starts with the
taxi driver. Anyone with the registered driving license and a car of their own can apply for an
Uber driver in any of the Uber covered cities. After screening the test, the driver is then given
investment in the Uber system (Peppard and Ward 2016). This helps in providing a steady
income to any employee with a car and does not require any kind of initial investment. The

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passenger forms another part of the business model of the firm and the Uber users can
download the app and book a cab via the Uber app. While the taxi is coming and is on the
way they can even track their journey. The app serves as a convenient way to book a cab and
enjoy the service at a lower cost.
The next aspect of the model is the payment. The Uber sets the payment system.
Usually a nominal fare is charged as base fee and on top of that every kilometre is being
charged accordingly (Aguinis, Edwards and Bradley 2017). However the premium fair is
charged during the peak seasons. The passengers can be providing a credit card or any other
pay wallet system. In many developing countries a system of cash payment has also been
developed.
The fare is generally dependent on the type of the car which the consumer has
booked and also the distance which is covered by the car. The payment can be understood to
be secure because it has to be made only after the ride has been completed. The next aspect of
the business model is to divide the profits of the firm. The aspect can be understood to be the
key revenue aspect of Uber. They revise the fare in the ratio of 8 to2. Uber takes the cut of
20% on the ride fair and hence it makes the taxi drivers earn more than the general taxi
services available in any country (Bryce 2017). As there is considerable competition in
various countries, sometimes the chargers are a lesser so that they are able to combat against
the competition.
Hence it can be understood that the business model of the firm is very flexible in
nature. It changes accordingly with the changing needs of the different customers. As the
company is running on a service basis the customer satisfaction is the priority which the
company has to form for its self (Meyer, Neck and Meeks 2017). Hence disruptive changes
at early stages are the only way in which the firm will be able to gain a competitive advantage

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in the future. It needs to engage in research and development so that they are being able to
earn more in the long run. Moreover there were several legal and regulatory issues which can
increase in cost and hence the growth opportunities need to be captured accordingly (Peppard
and Ward 2016). The main strength of the business model is that the app is user-friendly and
is generally very responsive in nature which makes the service exceptional.
However there are various downfall of the model as well (Ansoff et al. 2018). These
can be understood to be in the form of the liability and insurance cases, lawsuits from the
different taxi companies which have engaged the firm in regular court battles and lastly the
overhead cost of the firm can be understood to be very high.
Competitive situation and response
Apart from Uber, there are other applications in the ride sharing industry that have
been developing locally and have been stealing the market for Uber (Moon 2015). Hence in
order to help the company in understanding how it needs to perform in the competitive
situation, it is important that an analysis of the business environment can be undertaken
which will help in analysing the external factors which govern the overall performance of
Uber. This also assists in understanding the emerging technologies which the firm can use so
that it can strengthen its competitive situation (Cramer and Krueger 2016). Hence in this
section the tools like porters five forces, the pestle analysis and the SWOT analysis will be
made use of so that the competitive positioning can be understood well.
Porter’s five forces analysis tool
Uber can be understood to be a fast-growing firm with a commanding presence all
around the globe. Only with a few years of operations the firm has an adequate customer
loyalty and exceptional mobile software which is easy to use for both the drivers and the
customers (Urbinati et al. 2018). Hence in this section the different forces which govern their

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industry environment will be analysed to understand the manner in which we can map the
different competitive forces.
The threat of new market entrants
As the idea of the ridesharing cab can be understood to be very easy, Uber attracts
other businesses to have a share of its success and making significant profits since its
inception and it is due to this reason that the threat of market entrants is considerably high.
However the new entrants will be required to come up with new capacity and the large
economic costs (Baron 2016). Moreover they may also find it difficult to raise a high capital
when there is an existence of strong players in the market. Other entry barriers which they
may face is the Uber‘s policy, legal issues, technological platform and the customer trust.
The threat of substitute
The threat of substitute can be taken as a fear which is experienced by any
competitive business setting. The taxi services which are locally in the city are the greatest
substitute to the Uber services. Other modes of public transport like Metro, trains and bikes
are also a substitute to the Uber (Piercy 2016). These are user-friendly and efficient and offer
low-cost as well. However the demand they have created for themselves made it inconvenient
for the customers to use them and hence with respect to this Uber provides different
customers with the convenience that no other transportation mode can provide (Moon 2015).
Power of the suppliers
The supplier are very powerful in the industry and make more profits as compare to
the company hence in this case the suppliers can be understood to be related to the drivers
itself. The availability of the driver was the leading aspect in the transport industry as the
company does not own any cars and this it very difficult for the firm to have a control over
these drivers. Moreover sometimes these drivers also have an issue with this of contracting

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policy of the firm. The switching cost of the supplier can be understood to be very low. This
can be contributed to the fact that there is a presence of a large number of competitors of
Uber (Piercy 2016). Additionally the gas and oil suppliers also tend to be one of the major
factors affecting the firm. The supply of oil and gas has a high negotiating power in the
running of the firm.
The threat of buyers
The threat of the buyers can be understood to be powerful as the company makes
profits by increasing the price of additional features such as a bigger car, Wi-Fi service and
other security aspects. The threat of the buyer is usually governed by the negotiation power of
the customers because they have a better option (Cramer and Krueger 2016). The next factor
affecting the buyer power is the switching cost acting as a barrier which is very low. In every
country there are local ride sharing cabs available which are comparatively lower price than
Uber and this is what makes a great threat to the operation of the firm (Moon 2015).
Moreover aspects like that by information, distribution of the channels in the valley
proposition which the company provides the different customers can also be understood to be
an integral factor.
The threat of industry real rivalry
In any industry, the threat of rivalry can be understood to be very high. Many
companies are very competitive in nature and as per the porters theory, the similar size of
companies in the industry can lead to a prolonged sense of competition which is usually dealt
by Uber (Urbinati et al. 2018). As the company is present in various countries around the
world the different competitors which are faced by the firm can be understood to be the Lyft,
Ola, Curb, DIDI and other such cab applications? In the UAE, the cab firm named suggests
Careem also tends to be based on a similar Business model (Bryce 2017). Generally the

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competitive advantage which Uber is seeking out is based on the fact that it has access to
more resources which are often available to the other competitors (Morden 2016). The
company has received around 300 billion in funding and has been able to gain the first mover
advantage. In addition to this in the next section, the SWOT analysis of the firm will be
carried out it will help in understanding the manner in which the firm has been performing on
an overall basis.
Swot analysis
The strength of the company is as follows:
 The company is functioning on a largest ride sharing technology and has positioned
itself as the largest ride sharing technologies around the globe. In line of this it can be
understood that the company has been operating in many countries and hence it
makes over operations very successful (Ansoff et al. 2018).
 The brand has a strong recognition policy and is very popular amongst a large masses
 The fixed investment of the Company is comparatively very less
 The firm up with in a dynamic pricing strategy and hence the higher demand higher
price strategy is working out fine for the firm
 The company offers lower pricing as compare to other cab companies and hence this
is an advantage (Posen 2015)
The weaknesses of the company can be understood to be as follows
 There are multiple scandals which are being faced by the firm. These comprise of the
sexual harassment cases.
 The firm has faced a downturn in the overall profits and has faced considerable losses
over the last few years (Baron 2016).