University Supply Chain Management and Technology: Uber Case Study

This case study analyzes Uber, a leading online cab service, examining its evolution from a black car service to a global provider of various services like ride-sharing and food delivery. The study delves into the different business models Uber has employed, including the black car ride service, ride-sharing, and food delivery models, and their impact on the company's growth and market position. It explores the digital strategies implemented by Uber, considering the managerial implications and challenges, such as surge pricing and customer satisfaction. The analysis highlights the importance of adapting to market demands, addressing customer complaints, and maintaining a strong competitive edge in the dynamic online cab industry. The study concludes with recommendations for Uber's future digital strategy, emphasizing the need for customer-centric approaches and innovation.

Running Head: SUPPLY CHAIN MANAGEMENT AND TECHNOLOGY
Supply Chain Management and Technology: The Case Study of Uber
Name of the Student
Name of the University

SUPPLY CHAIN MANAGEMENT AND TECHNOLOGY 1
Executive Summary
Uber is one of the most popular online cab service organisation that was established with
headquarters in San Francisco, United States. The organisation initially served customers with
online services of cabs available at their required destination through to a mobile based
application, which made the organisation have an exponential growth and expansion to the
business. With the expansion, the organisation started to initiate into its next ventures of sharing
cab rides with other users, food delivery and even for micro mobility systems. There are several
Business models that Uber has introduced in the market throughout its business life cycle. The
company is render to be massively successful as per the revenue collection over investments and
profit made. However, like any other business organisation the organisation readily faces some
issues which might cause a setback for the organisation if the issues are not resolved. The
business would be vulnerable to serious implications within the business and also might result
into the rise of regional organisations getting more preferences from the customers or a specific
segment of the customers.

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Table of Contents
Introduction......................................................................................................................................3
Discussion and Analysis of Uber Company....................................................................................3
Background of Uber....................................................................................................................3
Business Models Used by Uber...................................................................................................5
Development of Digital Strategy for Uber..................................................................................8
Managerial Implication....................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

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Introduction
Online cab business is one of the newest businesses that have come into existence due to
the significant upgrade of handheld devices like mobile phones after almost a decade of the 21st
century. The main business is basically providing passengers with their own cabs for a
predetermined journey through a mobile application. In the mobile application, a person can
simply create his profile and book his journey and a cab will show up to his location within
minutes or in his specified time (Mims 2018). The person is able to pay the fare in cash to the
driver or through online payment system directly from his account. There are several online cab
businesses that operate in various parts of the world (regional) but among them, Uber is by far
the largest and serves more countries of the world than any other. Naturally, the area of business
of Uber is huge and spans over multiple countries of the world. Without the implementation of a
suitable business model, it will not have been possible for Uber to extend their business
worldwide.
The purpose of the report is to analyse the business models deployed by Uber and to
develop an appropriate digital strategy for the company for the upcoming future.
Discussion and Analysis of Uber Company
Background of Uber
The organisation of initially started in business for providing services to its customers by
developing an application that would help them book online cab from required destination at any
point of time. Ever since the business started to grow and expand exponentially the business
started to venture in different fields of the market as well not just restricting itself to online cab

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services. It started to initiate into other business ventures as well including sharing rights with
other customers, micro mobility systems and food delivery services. Starting from United States,
the company grew, flourished and currently now serves 67 countries as well as 78 cities in the
Asia-Pacific region making in the largest company in the industry (Bashir, Yousaf and Verma
2016). In addition to the deployment of a suitable business model, another main reason behind
the success of the company is the number of investors it has. These investors have faith in the
company’s business model and invest huge sums of money every year.
The business was initially known as UberCab which started in San Francisco for
providing black car rides. It mostly was available for executives the business gradually started
becoming successful, and the company started to bring about changes in different aspects
including its name from UberCab to Uber (Smith 2016). In addition, services were launched
outside of United States, Paris being the first city outside USA. One main point of business of
the company is that it does not own any of the cabs. The cabs are the properties of the drivers
themselves and they can register to work for Uber on a temporary or permanent basis. Uber
provides a smartphone to the drivers through which they can accept trips, track routes of the trips
selected by the passenger, register receipt of cash and various other features.
The organisation has pricing strategies developed for charging the services from the
customers after each ride or before. It is for this reason that the increase on demand model have
been utilised for the pricing strategy by Uber. The organisation has delivered a benchmark in the
market for standard demands which varies in every City. The price variations depend on the set
benchmark standards which increase or decrease accordingly (Srnicek 2017). For example, let a
person wants to travel from A to B and the cab fare during standard demand is $10. However, if
the person books during high demand time (during heavy rains, office hours and others), the

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price may double, triple or even quadruple, effectively increasing the price to $40. While these
surge prices are not always pocket friendly for the customers, Uber has been performing
sufficiently well in the market (Lourenço 2017). There are various types of travel that the
customers can select. These services are differentiated into general travel, business travel,
executive service, pool sharing and others while also, and the types of cars depend on the type of
service selected.
Business Models Used by Uber
Throughout its 11 years of existence, Uber has used various business models that the
company has kept changing in order to make up for the changing demands of the market as well
as the customers. The business models used by Uber in its life cycle have been discussed as
follows.
Black Car Ride Service Model: This was the business model that was implemented by the
company (although it was not officially a company at that time). Previously, the initial business
model of the organisation was developed for providing executive car services on demand.
Several people could not afford the service as the revenue model for charging every car service
was extremely high for or normal people to afford. This is why the company started changing its
business structure, but not before it gathered sufficient revenue from the executive rides (Nowag
2016). Soon after gathering sufficient revenue, the UberCab Company was established. Once the
company was established, the owners quickly brought in some cab drivers who were registered
as employees of UberCab and they started providing services to common people at much more
reasonable rates than the black car ride service model. The type of service, cars and price of ride
was then divided into three or four categories (Tao et al. 2019). Gradually, the name of the
company was changed to Uber and expansion started soon. From San Francisco, the services

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were started in New York City and after some further expansion in USA, the owners ventured
internationally and started services in Paris, France. At the same time, the mobile app was
upgraded on a constant basis and also the pricing strategy was modified based on the demands of
the specific regions i.e. the same pricing strategy was not applied in two different regions. This is
specifically one of the major driving forces behind the rapid growth of the company worldwide.
Ride Sharing Model: Uber introduced its ride sharing model much later after the
company was already successful and expanded to different countries worldwide. This model is
similar to bus services, only the seating capacity is substantially less than that of a bus (Liu and
Kim 2018). It was a similar service model just like the booking of regular cab services from
Uber, the only difference being the route of the passengers that would not be depending on
where the passenger has to go but on the basis of route that the cab driver is taking for dropping
of the other cab riders in the same car. In spite of this limitation, this model was very successful
as the prices for a single passenger was shared between the passengers in one pool trip.
Food Delivery (Additional Services Model): Although this is mainly considered as a side
business, this can also be considered as a business model. This main basis of this business model
is to utilise the brand value of the main business to achieve growth in the new business (Rubin
2017). Uber has been quite successful in that aspect and the new food delivery service has
become instant hit in all the regions where the services have been launched.
Current Model: The organisation has its own set of business model standardized which is
followed by other organisations with the same services of online cab through website apps over
the entire world. The current model involves the services divided into separate categories like
Uber Go, Uber XL, Uber Intercity, Uber Executive and others. In addition, Uber also promotes

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partnerships with corporate organisations so that the employees from those organisations have an
additional option: Uber Go Executive (Di Amato 2016). The benefit of this new class is that the
customers do not have to pay for any surge pricing in any situation. The main foundation of the
current business model of the company is the pricing strategy based on demand and supply.
When the demand is less than a standard benchmark, the pricing is on an adequate level whereas
when demand is substantial, the price also gets multiplied by 2, 3 or even 4 (Scheiber 2018).
Naturally, this surge pricing policy has been a reason of discontent among the customers and
many customers are not willing or able to pay the surge price whether it is rush time or not.
Initially, Uber was poised to replace all the regular cab services in the cities but due to the surge
pricing issue, many customers still prefer to ride regular taxis that have fixed pricing rates. Even
Uber had dissatisfied their customer and received negative feedback from the customers because
of the issues it has caused to the people taking the online services before, making the users raise
their voice against the grievances that they have from the organisation and its services (Wirtz and
Tang 2016). The services of Uber has several problems which has caused serious issues to the
customers seeking online cab services at the time they needed it the most. These have been
mostly payment related problems and incidents of the drivers rejecting the right and also in
appropriate behaviour by the cab drivers during the user is already taking the right and other
service related issues. Recently, the numbers of complaints have risen considerably around the
world, forcing Uber to introduce new policies and strict actions in order to ensure the customers
have smooth experience during their rides. The new actions include monetary penalties of drivers
and providing the customers with security helpline numbers to assist them if the driver does
something wrong (Fanelli 2017). The real picture of the business of Uber currently is that despite
the issues and changes, the business of the company is quite booming in the global context but at

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the same time, in the regional markets, various competitors have grown up and giving strong
competition to Uber. The unstable market means a customer immediately switches to a different
company if he faces a single negative experience with this one (Bick 2019). As a result, Uber
needs to consider customer satisfaction and experience on its top priority list above anything
else.
Development of Digital Strategy for Uber
As discussed in the previous header, Uber head several business model developed during
the business life cycle. This is because the company was already becoming a huge success in
terms of profit and revenue gathering their distinctive issues found within the organisation that
could not be amended. The issues have the potential of making the organisation face several
dangerous implications in future, especially with the competition from the market that was
already evolving through the development of regional organisation having better preferences
from a particular set of customers.
In order to keep their business afloat and keep the profit coming, Uber needs a new
digital strategy that will ensure increase in their sustainability in business in addition to
maintaining a strong growth in the regional markets (Min, So and Jeong 2019). Following are the
proposed components of the proposed digital strategy.
IT R & D Department: The first requirement is to create a new IT research and
development department that will complete invest time and effort in upgrading the existing
mobile app and if possible, add various new features keeping in mind various aspects like
security of the passengers, appraisal system, customer care and others.

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Digital Marketing: Digital marketing is one of the most effective techniques that are
currently used by multinational organisations to reach out to the customers (Gassmann,
Frankenberger and Sauer 2017). Extensive use of social media by the people makes it an ideal
platform for conducting digital marketing. Various promotions and marketing activities can be
done through digital media in order to attract more customers.
Use of Modern Technologies: The main challenge that Uber currently faces is that it still
does not have control over its drivers. Although Uber is able to track the location of the car using
GPS trackers, the company still cannot stop various misdeeds or even crimes committed by its
very own drivers (Ferrari 2018). Some recommended technologies include the use of RFID for
real time location of the car and also use smart contract for employment of the drivers.
Big Data Analytics: This technology can significantly help the company to make analysis
of the market and change business strategies accordingly in order to ensure sustainability in
growth and revenue (Andreassen et al. 2018). Big data analytics has the potential to be driving
force behind the growth and sustainability of the company as it will then be more prepared for
rival organisations and their strategies.
Managerial Implication
While the recommended plan for the company is to implement various digital business
strategies, there might also be risks in the same. Use of RFID and other tracking devices can
violate the local laws if prior permission is not taken from the authority. Digital marketing has its
own drawbacks with breach of privacy of customers may occur due to malicious files and
entities breaking through the links and enter into the customer’s systems (Schwalbe 2018).
However, in spite of these risks, these technologies will be extremely beneficial for the company

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and hence, it is recommended to go ahead with this digital strategy in the upcoming future. The
focus of the company should be on the customers’ basic needs and requirements and take
appropriate actions accordingly.
The proposed changes may also create various managerial implications that may or may
not be desirable for the management of the company (Teece 2018). The management might have
to go through some significant changes in order to incorporate various business decisions and
strategies. However, as discussed already, these steps are necessary in order to ensure sustainable
growth of the company as well as trumping the other market competitors who are also following
Uber’s original business model and gaining significant portions of the regional markets.
Conclusion
Therefore, in conclusion, it can be said that the organisation of Uber was developed for
providing cab services to the the customers through online application which was a huge hit in
the market as the company gained immense success from the customers through the innovative
services provided to them. Due to this extremely innovative service, the organisation gained a
huge success providing Rapid growth and expansion to the organisation which made over to start
other services alongside is online cab services, like that of food delivery, shared rides and micro
mobility system. The Organisation was initially named as UberCab but due to to the the changes
that the organisation has made in its initial business model, changing from executive black car
rides to normal cab rides for people to afford, the gathering of revenue make the business
successful such that it was renamed as a single propriety known as Uber. The organisation
started its basic charges set on the increase on demand model, which made the organisation
charge for each cab ride standardized and selected as per the the economic condition of each

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City, for which the price in range varied. The increase and decrease in cab rides was set owing to
the benchmark standard. The first business model that was implemented by the company was
black car ride service model. The business also had several setbacks about service level
problems, such as having negative feedback received from the customers going to the issues
within the app, payment issues or declination of the rider for providing the service and even
inappropriate behaviour during the ride. In order to make up for these problems and ensure
sustainable growth at the company, a new digital strategy has been proposed that the company
can utilise to ensure better quality services for the customers.

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References
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Vaerenbergh, Y., 2018. Business model innovation and value-creation: the triadic way. Journal
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Bick, G., 2019. Uber SA: disruption of the local taxi industry?. Emerald Emerging Markets Case
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Di Amato, A., 2016. Uber and the sharing economy. Italian LJ, 2, p.177.
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or how can EDP BE the Uber and not the taxi driver (Doctoral dissertation).
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market (Bachelor's thesis, Università Ca'Foscari Venezia).
Gassmann, O., Frankenberger, K. and Sauer, R., 2017. A primer on theoretically exploring the
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comercial or how can EDP be the Uber and not the Taxi Driver (Doctoral dissertation).

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Mims, C., 2018. Uber’s biggest problem: Its business model. Source Unknown.
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Teece, D.J., 2018. Business models and dynamic capabilities. Long Range Planning, 51(1),
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