Innovation and Value Proposition: An Analysis of Uber's Business Model

This report provides a comprehensive analysis of Uber's value proposition, examining its strengths, weaknesses, opportunities, and threats. It utilizes various innovation tools and techniques, including the Value Proposition Canvas, Business Model Canvas, Customer Journey Canvas, Porter's Five Forces, and SWOT analysis to identify areas for improvement and strategic recommendations. The report focuses on leveraging Big Data technology to enhance customer experience, address lagging areas such as driver dependence and customer complaint resolution, and explore opportunities for innovation, such as luxurious ride options and improved customer service. The study also considers the relevant Sustainable Development Goals (SDGs) related to industry, innovation, and infrastructure, offering insights into how Uber can achieve sustainable growth. The conclusion emphasizes the importance of innovation and adapting to market dynamics for long-term success, with references to relevant academic sources.

VALUE PROPOSITION: UBER

Table of Contents
1.0 Introduction..........................................................................................................................3
2.0 Innovation Tools and Techniques........................................................................................3
2.1 Value Proposition Canvas................................................................................................3
2.1.1 Customer’s Profile....................................................................................................3
2.1.2 Value Proposition......................................................................................................4
2.2 Business Model Canvas....................................................................................................5
2.3 Vision of Future Canvas...................................................................................................5
2.4 Customer Journey Canvas................................................................................................6
2.5 Porter’s Five Forces..........................................................................................................7
2.6 SWOT...............................................................................................................................8
3.0 Major Lagging Areas of Uber..............................................................................................9
4.0 Strategic Recommendations.................................................................................................9
5.0 Conclusion............................................................................................................................9
References:...............................................................................................................................11
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1.0 Introduction
The concept of novel value proposition may be construed to be one of the most critical
success factors (CSFs) in case of a business organisation. In today’s complex corporate world
worldwide with wide use of technology and recessive competitions it becomes utmost
important for the management to devise a market-disruptive innovation strategy that will
have a distinct value proposition for its consumers. In doing so, the business will be able to
achieve a competitive advantage in the market and thereby standout for the long-term. The
instant paper deals with such value proposition by Uber Technology Inc. (hereinafter may
referred to as “Uber” or the company or the business, as the case may be), an America based
transport company known for its worldwide presence and market-disruptive offering of peer-
to-peer ridesharing service. In this paper, the researcher will identify and analyse innovation
tool and innovation trend in the industry the application of which may add significant value
to the offering of the company in the long-run. In conducting such analysis, the relevant SDG
(Sustainable Development Goals by United Nations) of “industry, innovation and
infrastructure” has also been considered.
2.0 Innovation Tools and Techniques
Big Data technology is one of the most suitable Software –Utility system that can help Uber
to Analyse, Practice and Extract information from a large set of data to increase the novel
value proposition and design some innovative ideas for attracting more number of customers
(Athoillah et al. 2019).
2.1 Value Proposition Canvas
The Value Proposition Canvas tool will help us to understand the value proposition of the
company and the customer’s profile.
2.1.1 Customer’s Profile
Gains
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The customers of Uber will be more thrilled if they get more availability of Uber ride when
they most needed.
Pains
Customers many time have different negative experience regarding taking an Uber ride such
as online transaction fail; ride doesn't come on time; complaint doesn't solve in time etc. and
they would like to give a feedback about their experience on social site (PENQUE, 2019).
Customer’s job
Customer’s job is to give feedback about their experience and get a satisfying result for their
complaints.
2.1.2 Value Proposition
Gain creators
The unique value proposition can be provided by the big data that will help the company to
gather the locations and the timing when the percentage of booking of online rides is higher
and can provide more rides there at those particular time and locations (Überall et al. 2019).
Pain relievers
The feedback can be collected from social sites by Uber using Big Data technology to resolve
the problem. They can improvise the system of the transaction generated, ride allocated and
complaint solving team and gather more rating from the customers.
Products and services
Big Data helps the company to collect all the feedbacks, rating, conversations, hobbies and
interest of the customers to identify the gaps and provide better service to them (SAADAH,
2019). Uber also target more customers according to their interest in travelling by providing
different types of reward points or discounts or coupons for choosing them.
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2.2 Business Model Canvas
Uber is planning for innovating their products and services and target more customers in
different countries. As per the understanding gathered from the value proposition section,
Uber needs to differentiate the customer's category for targeting more customers (More &
Rakshit, 2020). Using Big Data technology, the customer's data can be collected according to
the following category
 The customer who is travelling most can be because of their hobbies or for work
 Customers who are taking an online ride more frequently
 Customers who are accepting discount offers almost everywhere
 Customers who give “likes” to the pages of different tourist destinations
Uber needs to connect with those customers by sending attractive messages; email of
different discounts; can send them seasonal passes for travelling; provide offers for rental
booking for the customers who love long driving (Alsoubaie, 2019). Moreover, sometimes
there can be many complaints those are remain pending for a long time and which results in
losing many customers, Uber can use the technology of Big Data to analyse those cases from
the comments in the customer's social profile and solve them as soon as possible.
2.3 Vision of Future Canvas
Uber already has a vision that is to provide safe, cheap and reliable transportation to its
customers. But today is the world of innovation where it needs to be more perfect to take a
lead from the competitors. The new vision of Uber is to connect more customers and provide
a smooth and luxurious ride to the customers.
Nowadays, people live in a social site. We can get about everything of the people's lifestyle
in social sites. Big data can extract the list of the customers those are regularly visiting the
blogs and websites of luxurious cars (Zhang et al. 2020). Uber need to improvise some of
their vehicles for those selected customers who love to hire a ride for more than a day for
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holiday planning with their families and friends. These customers will not hesitate to pay a
large amount for such type of luxury where they can get a small suit type experience in a van.
This luxury can include Wi-Fi, tablets, cushions, music system, disco lights etc. For the
middle-class customers who are almost every day take rides, can be provided with some free
rides with travel or dining coupons which can make them refer more customers to take Uber
ride (Sun, 2019).
Other than the customers, Uber can get information of the more reliable and good driver who
are searching for jobs in different sites and before sending them a proposal, Uber can check
all the experience of those people using the extraction capability of the Big Data.
2.4 Customer Journey Canvas
Uber needs to conduct some research regarding the experience of the customers of taking
Uber rides. The information can be easily collected from the feedback provided in the social
sites using Big Data technology (Batra & Na, 2019). The steps that customers follow to take
ride are such as
 Search for a ride (must be safe and cheap)
 Make a comparison between two or three types of rides regarding costs, rating and
time consuming using different types of mobile apps
 Confirm a ride
 Receive and use a ride
 Monitor the experience
 Provide feedback
These steps are more or less the same for most of the customers. Uber has its mobile apps
where they provide the time of arriving on a ride, driver details, payment status and the route
of the destination (Musonera & Cagle, 2019). Uber can improvise their apps by providing the
inner structure of the cars so that customer can get to select either he/she like to hire that ride
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or not. There will be many customers who may like to reject some of the rides as they get to
know either the inner structure of the ride is suitable for them or not. But, this facility may
benefit the company also. The numbers of customers who may have patients with them or
who would like to take a smooth ride despite the money or like to get information of their
ride before riding and while getting this facility from Uber, they would not go to select other
apps (Habeeb at al. 2019).
2.5 Porter’s Five Forces
Bargaining power of customers
The buyers of Uber are mostly choosy regarding the costs. If Uber decides to increase the
cost of the rides a little bit to match the decreasing value of the currency in the market, the
customers may decide not to choose Uber for their daily rides (Dremel et al. 2020).
Bargaining power of suppliers
As Uber works with the drivers who have their cars therefore, drivers are not bound to serve
Uber in any circumstance (Kuo & Kusiak, 2019). There is always a threat that good drivers
may leave the company for a better hike in other companies or making their own business.
Threat of substitution
Taxi service is one of the most populated services of a ride in Australia. With low cost and
higher availability, taxi service can any time be the main ride stream of the customers (Dai, et
al. 2019).
Threat of new entrants
None of the mobile apps and business model of Uber is secrets and can be copied and
designed by any newcomer companies with the help of the high access of internet
(Lakshmanaprabu et al. 2019). Also, as there are very low barriers in the ride-based industry,
the number of local and global competitors is increased in the past five years and higher the
threat of new entrants for Uber.
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Competitive rivalry
The competitors of Uber can go to a higher extent to beat their competitors in the local and
global market. Some of these competitors are Lyft in the US, Ola cabs in India, Careem in
Dubai and Grab in Malaysia (Helbing et al. 2019).
2.6 SWOT
Strengths
 The company enjoys the strengths of largest technology of ridesharing
 Brand recognition is strong
 Fixed investments are low and all the running costs are recovered instantly
 Dividing customers into categories is easier
Weaknesses
 There are more choices for customers as there are number of other car aggregator
service as well in the industry
 The company has to depend on its car owners as the company does not own any cars
Opportunities
 The scope exists to connect more customers through social sites using big data
 Using Big Data, the management may collect the data related to the interest of more
customers
 Also, the tracking more potential customers may be possible using Big Data
 Accordingly, customised and luxurious service may be offered to the customers who
may need it
 Finally, the use of Big data may provide access to a large range of customers
Threats
 Retention of employees is an issue that the management faces throughout
 The acute competition may lead to price war at times.
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3.0 Major Lagging Areas of Uber
The major lagging areas of Uber are that
 They have to depend on the drivers who have their vehicles
 The same service is provided to all types of customers.
 Doesn’t work properly in customer complaint service
 More or less the same service provided as the local competitors
 A higher rate than taxi services
 In some places, the availability of service is less
4.0 Strategic Recommendations
If there will be many opportunities where Uber can provide their vehicle and hire more
potential drivers who have good communication skill, then the customer service may be
much better. Uber has to work hard to provide the type of products and services that the
customers need according to their lifestyle and status by gathering data using Big Data
technology. Uber needs to launch some luxurious ride for the holiday seeker. Uber can use
Big Data technology to improve their customer service and increase their rating. It can also
use the social network data extract by the Big Data technology to reach more customers by
providing the likable products to them.
5.0 Conclusion
The discussion and assessment established the fact that the company has been performing
reasonably well in the market. However, the innovation is UN’s one of the SDGs and the
same may need to be inculcated within the value system of the company offering in order to
achieve the sustainable growth in the long-run. The analysis has shown that the company
suffer from certain internal process related weaknesses like dependence on car owners. Also,
the market is competitive and there exists a considerable threat in the form of price war and
differentiated offering in such competitive horizon. Therefore, it becomes critical for the
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management to devise such an innovative strategy, using Big Data technology, as stated
herein, that will provide them with a competitive advantage through better customer service.
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