BI NORWEGIAN BUSINESS SCHOOL
EXC3505 STRATEGY
Uber Strategy Case Study
● Identify factors that contributed to Uber’s initial great success.
● Identify one challenge threatening Uber’s long-term success and how can Uber overcome this
challenge?
Team:
1. Nhat The Tran, student_id: 1034316
2. Reziya Duolikun, student_id: S219479
3. Ådne Aastveit, student_id: S1713177
Executive Summary:
In this paper, we analyze the Uber case study using the SCQA framework (Situation, Complication,
Questions, and Answers) to answer two questions about factors influencing Uber's great success and
challenge for Uber’s success in the future and how Uber can overcome that challenge. In the Situation
and Complication section of each question, Uber Case is studied based on strategy theories from the
EXC3505 Strategy course such as PESTEL, 5 Forces of Porter, SWOT Analysis, Canvas Business
Model, Corporate Strategy (Market Development, Product Development, Product Diversity, Market
penetration) to understand the factors driving Uber's miraculous growth from its start-up to the global
boom in the sharing economy. How Uber has innovated in its business model and applied modern
technologies to its business. Along with that, we have collected a lot of data related to Uber and its
competitors around the world on important operational parts such as the amount of money received from
venture capital funds, revenue over the years, drivers & customers' active ratio in their network, and
customer segmentation analytics. This gives a complete picture of the fierce competition in the
ride-hailing market and related areas of this business model. Obviously, it is a factor that greatly impacts
the development and success of Uber in the future. From there, Uber's VRIO analytics helped our team
come up with a number of solutions in terms of technology development, operational diversity, and
partnership strategic solutions for Uber so they could overcome the competitive challenge. These
solutions are intended to create an advantage for Uber to gain market share in the market of ride-hailing,
food delivery, and transportation so that Uber can ensure even more success in the future.
Table of Contents
Introduction
3
Analyze Uber with SCQA Framework
3
Question 1: Identify factors that contributed to Uber’s initial great success
3
1.1. Situation
3
1.1.1 Key PESTEL Analysis
3
1.1.2 Industry value chain
4
1.1.3 Uber Business Model
5
1.2. Complication
5
1.3. Question and Answer
6
Question 2: Identify one challenge threatening Uber’s long-term success & How can Uber
overcome this challenge
8
2.1. Situation
8
2.2. Complication
9
2.3 Question and Answer
9
2.3.1 Identify one challenge threatening Uber’s long-term success
2.3.2 How Uber can overcome this challenge
9
10
Alternative 1: M&A - Partnership Strategy with local players
11
Alternative 2: Product diversification to become SuperApp for Western:
12
Alternatives 3: Blue Ocean - Developing Artificial Intelligence self-driving car
13
Conclusion, Recommendation:
13
Reference
14
Appendices 1: Some figures/Stats of Uber and its competitors
18
Appendices 2: Our team's own analysis of Uber based on Strategy Theories (5 Forces, SWOT,
VRIO, PESTEL)
23
Uber Strategy Case Study, BI Oslo 5/2022
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I.
Introduction
Uber was founded in 2009, and it quickly became a global phenomenon for a new “sharing economy”
and valuable startup years before its 2019 IPO, with a high market value. Uber started by providing a
ride-hailing service to users through a mobile application, then expanded its service to food ordering,
delivery services. Their business model allows them to scale quickly without real asset investment like
traditional taxi companies. This model has been applied in many different fields such as room rental,
hotels, financial loans, and restaurants. According to the "Uber for something" formula, many famous
technology companies also operate similar models taken by Uber such as Airbnb, Ola, OYO room,
Lending club, Foodora. The period from 2009 to 2014 witnessed the initial great success of Uber as the
company created an economic model and started the process to grow on all continents, and it contributed
to completely changing the taxi transportation industry.
But then they themselves also faced fierce competition from rivals in the local market along with many
boycotts, legal accusations related to the regime, working benefits of drivers, and other lawsuits from the
government or traditional companies about unfair competition. By 2016 Uber sold its business in China
to its rival Didi, in 2017 Uber continued to sell to Grab in Southeast Asia. Earlier in 2017, Uber Founder
and CEO Travis Kalanick had to resign because of his involvement in many privacy scandals, allegations
related to a toxic working environment, and sexual harassment at Uber's workplace. Until 2018, Uber
was banned in many countries such as Germany, Denmark, Canada, Thailand, Portugal, Italy, and Saudi
Arabia. Although facing many problems, Uber is still doing well with revenue of more than $17 billion in
2021 and they have a successful IPO event.
II.
Analyze Uber with SCQA Framework
1. Question 1: Identify factors that contributed to Uber’s initial great success
1.1. Situation
1.1.1 Key PESTEL Analysis
Uber with a completely new product on the market and a distinct economic model will have many
advantages and barriers to placing it in an old-fashioned business environment. Therefore, the PESTEL
analysis method is very suitable to better understand how the macro factors affect Uber. With each of
those effects, what advantages did Uber take advantage of to be a game-changer and create great initial
success? Since the PESTEL analysis is quite long, it has been placed in Appendix 2, section 5, here are
some of the main ideas.
Uber was established in the context when smartphones were gradually becoming popular in the US,
Europe, and around the world, along with the complete development of Internet infrastructures such as
electronic payment technology, and payment technology. With a global location, maps make it easier for
Uber to build a product that is easy to use, transparent in service pricing, and convenient for users
including commuters and drivers. On the other hand, the traffic congression in the US in the period
2009-2014 was very complicated. According to the statistics of the Office of Energy Efficiency &
Renewable Energy and Statista, in 2012 the number of cars per 1000 people reached more than 808
Uber Strategy Case Study, BI Oslo 5/2022
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vehicles, this is a huge increase that puts great pressure on urban traffic (35)(36). Also according to a
2014 Seattle-based INRIX and the Center for Economics and Business Research report, traffic congestion
has cost the US about $124 billion, both direct and indirect. A similar statistic for Western European
countries when this number reaches 590 vehicles per 1000 inhabitants(37). Obviously, Uber with its
car-sharing model is a great and well-timed solution to the traffic problem in the US and Western Europe
during this period. People who don’t yet own a car or who don’t want to drive themselves in traffic jams
will be potential customers for Uber. Drivers have a car ready to join Uber's network as drivers. Each of
these interactions between demand and supply creates a network effect that helps Uber have favorable
conditions for miraculous growth.
Uber is also a more sustainable solution when instead of each person moving a car, it can be shared to go
together. According to a study by Hedges & Company of 252 million vehicles in the US, the average age
is 11.5 years (38). Also according to a report by US Environmental Protection, 26% of emissions in the
US are caused by small and family cars (39). Uber with regulations on the age of vehicles participating in
the system is less than 5 years old and limiting the number of cars on the street when there are many
customers using the service will significantly reduce the above carbon emissions (40). One last thing in
context is the disadvantages of the traditional taxi model. With the form of calling or waving a car on the
road to find a ride, it will take a lot of time for customers to use the service. The way to calculate the trip
fee uses the number of kilometers traveled by car, which also makes the transparency of taxi drivers
questionable as they can cheat by taking a detour. Uber with a smartphone app and charging by satellite
will ensure a better quality of service.
1.1.2 Industry value chain
Uber has an operating model based on connecting resources available in society, that is, connecting
available personal vehicles with people who need to move or transport things, and connecting restaurants
to online selling. Uber's inbound logistics operations recruit drivers and require the use of an
internet-connected smartphone app. It works simultaneously for both the driver and the customer. As for
Uber's operation, it will focus on maintaining the technology system, ensuring the scale of the DevOps
system on a large scale, and optimizing the matching of demand and supply in the fastest and most
efficient way. Uber's sales and marketing activities are conducted on its social media platforms and apps.
Electronic payment connection systems also play an important role in operating and running marketing
and sales campaigns. Uber's infrastructure support, technology development, and human resources
activities are also among the top in the world, with a flow of billions of requests on the Uber system and
application still running smoothly, a testament to its effectiveness. and quality from the Uber team. The
operation Uber uses to control service quality is a two-way rating system for drivers and customers. They
can easily complain about the service if there is a problem with the ride through the service feedback
portal on the App .
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1.1.3 Uber Business Model
A business model is how companies organize their resources to deliver value to customers. Because Uber
pioneered in creating an efficient operating model, the sharing economy, where a company can come up
with solutions to optimize the available resources in the economy without investment costs to build those
resources. So analyzing Uber's Business model is crucial for us to understand why Uber is able to create
so much innovation and success. To make this clear, applying the Canvas model is very effective to
understand Uber's business model.
Key
Key Activities:
Value Propositions
Customer
Customer
Partners:
- Building Platform
Rides/Customers:
Relationship
Segments:
- Drivers
- Marketing an acquire
+ Quality service
- Rating system
Riders:
- Investors
customers/riders
+ Low price
- Convenience
+ Who need
- Customers
- Hiring Drivers and Merchants + Safety and
- Privacy
taxi, food
- Restaurants
- Operation matching
Convenience
- Pricing
delivery
- Tech, R&D
demand-supply
+ Secure payment
- Support
service
Partners
- Technology Driven
+ Customer support
- Fairness
+ who don't
- Lobbyists
Development
+ On-demand
- Opportunity
have car
-Commercial
Partners
- Insurance
Key Resources:
- Uber’s app platform
- AI: predict demand, produce
Heatmap, Self-driving
- Network effect: Passengers +
Drivers
- Data, tech assets
- Staff, local teams
choice
+ Order tracking
Drivers/Merchant
+ Earn more income
+ Flexible working
hours
+ Car/Bike value
optimization
Channels:
- Mobile Apps for
Driver and Riders
- Social Media
- Advertising
- Website
- Word of mouth
- Discount, promotion
Drivers:
+ Who has a
car with
driving license
need more part
time income
source or full
time job
Cost Structures
Revenue Streams:
+ R&D, Platform development: Programming, Maintain, IT
+ Commission from ride chargers
Infrastructure, Admin
+ Share of revenue from Food delivery
+ Marketing (Event, Online advertising), Sales: Discount to acquire
+ Advertising cost from merchant
more customer and drivers
+ Freight
+ Drivers share revenue, Driver referrals, Salary for employees
+ Legal, policy Lobby, Payment processing
1.2. Complication
With a unique business model, using less capital for fixed asset investment, Uber has easily grown at an
amazing speed when expanding worldwide after only 5 years of starting up in 2009. Uber attracted $5
billion dollars in total investments from 2011 to 2014 and used them to build infrastructure, and
promotions to educate customers about its new superior service. In contrast, Uber faces a series of legal
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problems related to driver rights, anti-unfair competition laws from different countries, or local
governments' local firm protectionist policies. They then also face fierce competition from local
ride-hailing companies that have useful localization features for local customers. All put Uber in the
status of both developing and pioneering changing barriers in society.
1.3. Question and Answer
Question 1: Identify factors that contributed to Uber’s initial great success.
There are a number of factors that contributed to Uber's initial great success:
● Lower price based on strength of business model: Uber's model is extremely efficient and lean
compared to traditional taxi models. In terms of fixed investment costs for tangible assets such as
vehicles, payment card scanning devices, mileage counters, dispatching call centers, walkie-talkies, and
communication devices. By digitizing this system onto a dynamic application, Uber does not need to
invest in this fixed cost. Secondly, optimizing driver supply resources, which helps customers to order
cars faster. The driver does not waste time waiting in vain. This quick matching benefits both drivers and
customers. Moreover, with the availability of drivers, Uber easily expands to other services such as food
ordering and transportation, which also helps increase the number of orders/rides for drivers, helping
them to work more efficiently. These changes in the operating model help Uber significantly reduce costs
in the cost structure, thereby reducing costs for customers a lot. For example, for the same distance
(Figure 2), in 2014, Uber's total price is $10-13, and for a traditional taxi $16-28). Apparently, Uber's
service is half the price of traditional taxis.
● The convenience of service by technology: Uber effectively applies the latest technologies to optimize
business operations to help bring convenience to customers: To optimize waiting time for customers
including waiting time matching with the driver and waiting time for pickup. Uber has built demand
prediction systems and heat maps (figure 3) that show the density of users at any given time. This helps
Uber drivers to actively move to locations with many customers to receive orders faster and can quickly
move to customers' locations for quick pickup. Thus, customers will minimize the waiting time for a ride
they book. According to a 2014 University of California Transportation Center study, 90% of Uber rides
are picked up in less than 10 minutes, and two-thirds wait less than 5 minutes. Almost no one had to wait
more than 20 minutes. Traditional taxis have only 40% of the ride will be picked up in less than 10
minutes. At weekends or at night that number drops to 30% and 16% (2). Ease in service payment:
Instead of using traditional payment methods, Uber applies online payment services by credit card or
e-wallet applications. There are several ways that customers can prepay for each ride or deposit money
into an Uber account to use. Thanks to this, the payment of customers is easy and absolutely safe.
● Safety service: Before moving, customers who book a car will know all the information about the trip
such as the amount to be paid, the distance traveled, who is the driver of that ride, they have a dot history,
and how is the rating. Based on this, customers have the right to refuse if they feel unsafe using the
service with a certain driver. Customers will feel safer during the trip. On the other hand, the driver's side
also has the customer's information and his riding history. Along with the reviews of the drivers who have
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served that customer before, the driver will also be assured that it is safe to do his job without worrying
about being attacked or robbed because he has info about the customer that the driver serves. A January
2015 Cato Institute study (4) on the safety of ridesharing states that “the ride-sharing business model
offers big safety advantages as far as drivers are concerned. In particular, ridesharing’s cash-free
transactions and self-identified customers substantially mitigate one of the worst risks associated with
traditional taxis: the risk of violent crime.”
● High-quality service: Instead of just providing car services with boring taxis and copper paint, Uber
offers many different service segments including high-end cars. This really completely changes the
customer experience for the service. With an affordable price, Uber customers will enjoy high-quality
service. In addition, the two-way rating system for drivers and customers also helps Uber maintain a
quality service because drivers or customers with poor ratings may be restricted from using the service.
Indeed, according to the 2014 statistics of Statista, in the US market, 78% of customers rate are extremely
and very satisfied with Uber services, 19% are moderately satisfied and only 3% are not satisfied with
Uber services (Figure 5).
● Higher availability of supply: Driving for Uber gives drivers a lot of benefits including better income
for working time, comfort in work because there is no time limit and workspace. It has completely
changed the behavior of workers, instead of being fixed, they are completely flexible. Moreover, the fact
that a person can use his car to join the uber service in his free time is also an effective solution to
increase his income without being tied to attracting a lot of drivers to join Uber. On the other hand,
having more drivers helps Uber improve service quality better, and better service attracts more
customers. This is the network effect (Figure 1a). So with its innovative business model, Uber has a
service with extremely high availability in supply and demand. The data on the matching ability, the
pickup waiting time of fewer than 10 minutes in more than 90% of rides is the clearest evidence for the
availability of drivers in Uber's system (2).
● Easy service expansion: With a convenient technology platform, Uber has launched many essential
services in core ride-hailing services such as Uber cab, Uber Black, Uber X, Uber Pool, etc. Or when
localized, Uber has additional passenger services such as traveling by motorbike, and cyclo in Southeast
Asian countries in 2014 when they hit Vietnam, China, and Malaysia (Figure 7 - Uber product
development timeline). Taking advantage of technology and the availability of drivers, Uber has provided
a variety of services to customers, thanks to this Uber significantly increased the number of customers'
active rates on the app instead of just using this application to call a moving car. On the other hand, Uber
drivers can increase their income by optimizing working time when serving many different services on
the platform.
● Venture capital: Compared with traditional business models, Uber operates under a sharing economy
model and uses investment money from venture capital funds as a lever for Uber to quickly educate
customers and expand its services globally. Uber has used a lot of attractive promotions around the world
to attract new users and stimulate old customers to use the service more. The proof is that Uber is not
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afraid to "burn money" in exchange for growth and expansion of operations. With strong investment from
investors with more than $5 billion through several funding rounds from 2009 to 2014 (14).
● Leadership: Uber founder Kalanick found a lack in the taxi market due to its long-time regulated
industry that has become the industry's biggest enemy. The government regulations made sure there
always was a higher demand for taxicabs than supply. Kalanick and Uber saw the opportunity to
revolutionize the taxicab industry with a disruptive innovation with an easy platform. Their platform
reduced production costs and expanded the efficiency of each driver. At the same time, they also were
more secure for both car owners and their customers when it comes to payment. Although Uber founder
Kalanick had to resign because of Uber's related scandals in the working environment, we can't deny his
leadership role in Uber's stormy development. First, Kalanick is a strong founder with extensive
experience and a great vision of technology. Before starting with Uber, he was very successful when he
started and sold three technology companies. Technology vision is another strong point, as he sees the
right time to start up with Uber to take advantage of the waves of satellite, smartphone, cloud computing,
and online payment technology. He's also adept at soliciting resources to grow Uber. Specifically, within
3 years from 2011 to 2014, he raised more than $ 5 billion, then more than $ 9 billion from Softbank in
2017, making Uber the most valuable startup in the world. Kalanick is also very active in lobbying for
policies to get new business models as Uber approved on a global scale. Finally, with technological
insights, Kalanick, along with an efficient operation team, ensures service quality and satisfaction for
hundreds of millions of Uber customers with billions of rides, when more than 97% of them are satisfied
or very satisfied with the service regardless of geography, territory, or culture (Figure 5). Therefore,
aggressive leadership and management are also important factors in Uber's miraculous growth.
2. Question 2: Identify one challenge threatening Uber’s long-term success & How can
Uber overcome this challenge
Based on our team's own analysis of Uber in terms of the Five Forces of Porter, SWOT Analysis, and
VRIO (Appendices 2), there are some main points of Situation and Complication.
2.1. Situation
Looking into the Ubers situation, the analysis of SWOT, Pestel, VRIO, and Porter's five forces help
determine their possibilities for further great success.
The SWOT analysis gives a great impression of Uber's situation. Looking into Uber's strengths, we can
see they already cover a broad market from ride-hailing to E-scooters and bikes with a strong brand and
the highest brand recognition. They have established a rating system, and the generally high standard
makes Uber a preferred player among its customers. Their drivers also have found insurance solutions
and dynamic prices to become more attractive and accommodate their partners.
It clearly shows that Ubers have a lot of competition in all segments for weaknesses. They also suffer
from political disputation and various regulations and laws worldwide, which have made the integration
process expensive, one of the reasons for their bad economy. Uber has to ensure entering markets
according to local regulations and policies for opportunities. They could consider licensing some of their
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drivers to establish their services in new markets. Self-driving cars and Uber air are also some significant
future opportunities. For threats, it emphasized the dissatisfied drivers, negative attention and PR, and the
effect of word of mouth. Low income and high-quality standards are also highlighted as a threat.
The PESTEL analysis shows the macro picture of an industry environment. The analysis paints a picture
of critical partners, activities, customer relationships and segments, channels, cost structure, and revenue
stream. This shows that Uber is in a great situation to continue its further growth.
The Five Forces analysis shows that Uber faces better public transport, transport sharing, and self-driving
cars for the threat of substitutes. The bargaining power of riders shows that Switching berries for riders is
Low, the Value proposition for riders is Medium, and Rider information availability is High, which
indicates that Uber has to consider their relationship with the drivers to continue further growth. For
threats of a new entrance, the barrier to entering is high, indicating that industrial profit is low.
Bargaining power for drivers shows that switched costs for drivers are low, the value proposition is at an
average level, while at the same time, the barriers for entering are low.
The rivalry among competitors shows that Uber has a lot of competitors in all their markets, both direct
and indirect, which are necessary to consider for further growth.
The VRIO analysis shows Uber's value, rarity, imitability, and organization and gives additional
information to the internal structure of their company, and helps to identify the resources and competitive
advantage. Both value, rarity, and imitability show Uber's position as the preferred player in the market.
The organization indicates that the company has a high-quality internal structure necessary to continue
further great success internally.
2.2. Complication
​In addition, it shows that Uber is in a unique situation to continue their further great success, but they
have to continue being creative and consider its threats. They have a strong brand with a significant
customer group which can extend even further if they continue to be creative and follow local rules and
policies.
2.3 Question and Answer
2.3.1 Identify one challenge threatening Uber’s long-term success
One of the most crucial challenges for Uber is competitors in the local market. According to Statista,
Uber's market share by 2019 was 39,8%, which is higher than their two biggest competitors, DIDI
(34,7%) and Lyft (9,9%) (Uber Technologies, Statista). For Uber to keep their position as a market leader
in the industry, it must expand to maximize the value of the Uber brand.
Uber's biggest competitor is DIDI, with a total market share of 34,7%, an enterprise value of 68 billion
dollars (yahoo finance, 2022), and yearly revenue of 21,63 billion dollars (Sun Yiley, Bellon Tina, 2021).
Comparing Uber and DIDI, we find many similarities. They operate in the ridesharing industry, focusing
on transporting people and other goods fast and reliably at a fair price through a smartphone-based app
solution. Their platform is based on the same technology (Sun Yiley, Bellon Tina, 2021). Their main
differences are the way they operate. DIDI has gathered most of its market share in the Chinese market
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and operates in Japan, Russia, South America, and South Africa, while Uber's primary market is in The
United States and Canada. Especially in the market of China and Japan, Uber struggled to penetrate due
to political laws and regulations. DIDI also provides a car renting service for their drivers compared to
Uber, where most drivers are self-employed. DIDI also takes a smaller percentage of each trip. They do
not have surge pricing, which makes DIDI more competitive than Uber when it comes to price, and their
rental policy and minor cut percentages make them more lucrative for drivers overall (Horn Bria, 2021).
DIDI has also launched a plan for autonomous vehicles which will be a significant competitive advantage
compared to the rest of the industry.
Uber is dependent on its driver's loyalty to keep its position and expand even further for even more
significant long-term success. Uber has experienced problems regarding its drivers' loyalty because of
little responsibility and unsustainable wages. Uber puts itself vulnerable when drivers go to other players
in the same market for better conditions. Uber needs to keep drivers satisfied in their core business areas
while expanding their industry to increase revenue. Incredibly high populated areas like China, India, and
Indonesia are crucial for Uber's further success.
2.3.2 How Uber can overcome this challenge
Uber has experienced trouble in the Asian ride-hailing market for several reasons. In China, with
1,448,993,442 citizens (18.47% of the world population), Uber faced political issues and competition
from aggressive competitor DIDI. DiDi also offers a loan and insurance policy for their drivers, which
they prefer.
In India, with its 1,380,004,385 citizens (17.7% of the world's population), Uber launched its service as a
minor in the industry. Their main competitor, Ola cabs, has tailored its service to the local taste and
culture. Ola has managed to make its technology more secure from a customer perspective with a more
robust background check and security button in the app. Cash payment has also done them a service
available for everyone. As an Ola driver, you get a car loan financing program that opens the doors for
the ordinary Indian to start in the ride-hailing business.
In Indonesia, with 278,678,147 people (3.5% of the world population), Uber faced the same difficulties
as China and India. Uber came as a minor player compared to the local competitors Grab and GoJek.
Their technology was tailored to the Indonesian market, offering cash payments, and they built their
platform into financial service providers for unbanked consumers across this emerging market. Political
laws and regulations also made it hard to compete with local competitors.
In total, these three countries stand for a total of 39.67% of the total world population, which shows how
crucial they are for Uber's further great success.
Uber has managed to take some measures to gain a share of these Asian emerging markets. Uber is the
second-biggest investor in DIDI, with 12.8% of the total shares (Davalos Jackie, 2021). Uber also owns
27.5% of Grab (Choudhery Saheli, 2018). DIDI has launched a partnership with Ola and Grab, which
shows that uber still indirectly has a small percentage of the Asian ride-hailing market, but it is far from
enough to contribute to further success.
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Alternative 1: M&A - Partnership Strategy with local players
Partnership strategy: For Uber to continue their expansion, it will have to focus on expanding its
partnerships and building joint ventures with local providers. A joint venture will give Uber the
knowledge about the culture and markets that have been a significant problem for them in the penetration
of the Asian market and get a more substantial piece of the pie economically. They will also avoid
political regulations and laws for foreign countries. With a Joint venture, the parties can offer a broader
range of services or benefits and use each other's strengths in markets, culture, and technology. The
capacity will be more significant, and the costs and risks will be distributed. Another critical factor for a
joint venture between the companies is their stakeholder Softbank. Softbank has shares in Uber, DIDI,
and Grab, and it's natural to think that Softbank will see firms from their portfolio work together instead
of losing money competing with each other.
Merger Strategy: Another solution for Uber to continue its great success is to merge horizontally with
its main competitors to form a new entity. One primary reason for doing a merger is because it will allow
Uber to grow substantially more in a short period than what is sustainable if they were working for
themself. A further factor for Uber to merge with its competitors is the significant advantage both
companies will acquire in all markets. Both Uber and its competitors struggle to achieve a positive
balance and be economically sustainable. A merger will reduce the operation costs and give both firms
access to a broader customer base spread among several markets and countries. Both firms can focus on
their strengths in their respective markets and access valuable information. Uber is banned for political
issues in countries like Germany and Denmark. With a merger, they could operate through a different
brand and use their knowledge and experience to be presented.
The situation that would make Uber inevitable is a vertical merge with DIDI. According to Statista, in
2019, Uber was the market leader with 39.8% of the market, mainly from the US, Great Britain, and
France, while DIDI had 34.7% (Statista), mainly from the south Asian market. If these companies merge,
they will cover 74.5% of the ride-hailing market. DIDI also has launched a plan for self-driving cars to
gain a technological advantage. With this technology and market share, Uber/DIDI will have a significant
competitive advantage across all land borders with first-hand experience from all the major markets in
the world. They can split the investment and significantly lower their operation cost to get an economic
advantage. The company can use its expertise to integrate its other services, such as Uber eats and E-bike
rental, to call several economic pillars and continue further growth worldwide. Uber already owns a 12%
share of DIDI (Economic Times), while DIDI's biggest investor Softbank with 20.2% (Reidy Geaorid,
Lee Min, 2021), also owns a 10% share of Uber. (Davalos Jackie, 2021). To accomplish a merger, the
majority of the shareholders must accept the solution. Uber, and Softbank owns almost ⅓ of the total
shares in DIDI, which means they only need to get control of 20% of the remaining DIDI stocks to
implement the merger.
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Alternative 2: Product diversification to become SuperApp for Western:
Uber's most competitive advantage is its enormous customer base and brand value. In 2020, people
around the globe downloaded Uber's app 95 million times alone. Uber has 93 million active
users(Statista) and a total market value of 63 billion dollars(Company market cap, 2022). Uber also offers
a range of services, from ride-hailing to food delivery. Their foothold in the western world is significant,
giving a tremendous potential for new technology and localization improvement for their service. An
option for Uber to achieve further great success is to use its customer base, customer data, reputation, and
technological competence to build an entirely new ecosystem or a multi-purpose app for on-demand
services.
When looking at Uber's competitors, Go-Jek (Southeast Asia) and WeChat (China), Go-Jek was founded
in 2010 as a bike-hailing company with 20 riders. In 2015, they launched Go-food for food delivery,
Go-mart for shopping, and Go-Tix for tickets to concerts and events. In 2021, Go-Jek merged with the
leading E-commerce company Tokopedia increasing its valuation to $18 billion (Burgos Johnatan, 2021)
and offering everything from car-hailing, food, and concert tickets to massage. With 29 million monthly
active users(Statista) with an estimated revenue of $ 65.5 million a year (Growjo, 2022).
WeChat has done sort of the same strategy. WeChat was started in 2011 as a picture and messaging app.
In 2022 WeChat offers everything from simple messages to video games. They also have an online
payment function and a business segment for marketing and E-commerce for its 1.2 billion monthly
users, 3.2 million mini-programs on its platform, and yearly revenue of 108.2 billion RMB. (Mansoor
Iqbal, 2021)
For Uber to accomplish even further success, building an entirely new ecosystem around its customer
base will mean a significant increase in income, revenue, and additional market shares in all sorts of
segments. This will mean a significant investment in new technology and implementing it in their
customers' daily lives. Still, Uber has some significant advantages when it comes to building an entirely
new super app for Western society. Uber already has a partnership (IPO) with Alphabet inc, an important
economic and technical player who can provide a tremendous amount of resources both economically
and about people's habits, interests, and hobbies, technical assistance in marketing, building a platform,
and even more customers (Donfro Jillian, 2019). Another major advantage Uber has is its partnership
with Meta in India, giving them an entirely new customer base of 500 million active WhatsApp users.
Expanding their relationship further and including Facebook and other Meta-owned apps and services
will give Uber a customer base of 3.6 active monthly users. (Richter Felix, 2021)
Imagine Uber getting access to these features from both Alphabet and Meta. It's no doubt it will
contribute to Uber's further great success. Alphabet and Meta have first-hand knowledge about
E-commerce, marketing, and personal information, while they also can provide millions of active users
from all around the globe. When designing an entirely new ecosystem, Uber also needs to improve their
already existing business to be at the same level. To gain even further advantage, lower their costs in the
Uber Strategy Case Study, BI Oslo 5/2022
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long run, and become superior as the western multi-purpose app Uber should also focus on improving
technology for their ride-hailing and delivery service.
Alternatives 3: Blue Ocean - Developing Artificial Intelligence self-driving car
Based on their existing partnership with Alphabet, one of the leading companies in AI technology, Uber
can use this to its advantage. Alphabet/Google has already tested package delivery with drones, and
self-driving cars are under development (Love Dylan, 2013). AI robotics can change Uber's business
model significantly. Self-driving vehicles in ride-hailing will give them a significant competitive
advantage over regular ride-hailing companies. AI will help Uber lower their cost and expenses related to
human resources. It will improve its efficiency and make them an even more reliable firm when it comes
to time. Another significant advantage AI will give Uber is in competition with laws and regulations,
especially in Europe. Uber has struggled to penetrate the market due to rules and regulations because the
legislation says that all persons in the ride-hailing industry need a license to operate self-driving,
GPS-controlled cars. Could this become one of Uber's ways around the rules and regulations that keep
them outside of these critical markets?
AI delivery with drones is also commonly used in the US already. An Alphabet-owned company named
wing is the first company in the US to get the FFA approval to start delivery service by AI-controlled
drones (Porter Jon, 2019). In Uber's ecosystem, drone delivery will be crucial to lower operation costs
and make it more efficient and convenient for customers to use their service instead of shopping themself.
Investing in AI technology for Uber while developing their ecosystem will give them a significant
competitive advantage and contribute to their further great success.
Figure 1: Future Uber value curve with self-driving vehicles, Source: Catolica Lisbon 2020
Conclusion, Recommendation:
As a pioneering technology company in building a sharing economy platform to help connect and share
digital cars, Uber has the advantage of being a leader with a very good brand image for customers in the
world. Globalization, coupled with technological capabilities, are advantages for Uber in a competitive
market. However, risks come from many sides such as government policies, legal regulations, barriers to
Uber Strategy Case Study, BI Oslo 5/2022
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entering new markets, or fierce competition from direct competitors in local markets. or threats posed by
the technology of the tech giants. Therefore, Uber needs to have an effective strategy to continue to
improve its business model to earn profits, increase market share, and develop sustainably. From the
analysis of the facts, and the theories from the EXC3505 Strategy course, there are three plausible
strategies for Uber. These are three strategies that can not only be implemented simultaneously without
creating any conflicts in operation but also support each other so that Uber's innovations are increasingly
widely applied to help people's lives get better.
Reference
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(Gillespie,2014)
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Ride Services: Comparing Taxi and Ridesourcing Trips and User Characteristics in San
Francisco, Page 11
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(Rayle and Shaheen,2014)
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(Schneider, 2017)
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9. Consumer adoption of the Uber mobile application: Insights from the diffusion of innovation
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(Min Somang, So Kevin 2018)
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(Wirtz Jochen, Tang Christopher, 2014)
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(Lee Zack, Chan Tommy, 2018)
12. Disruptive Entrepreneurship and Dual Purpose Strategies: The Case of Uber
https://pubsonline.informs.org/doi/epdf/10.1287/stsc.2018.0059
(Baron David, 2018)
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https://www.proquest.com/openview/14bda163d48a3a6e382d214419722ef2/1
(Spott Patrick, 2018)
14. Uber Funding rounds, Techcrunch sources
https://www.crunchbase.com/organization/uber/company_financials
No author no date?
15. Business models and dynamic capabilities, David J.Teece 2017,
https://www.sciencedirect.com/science/article/pii/S0024630117302868
(Teece David, 2017)
16. Taxi App Revenue and Usage Statistics (2022),
https://www.businessofapps.com/data/taxi-app-market/
(Curry David, 2022)
17. 4 Challenges Uber Will Face in the Next Years,
https://www.investopedia.com/articles/investing/072215/4-challenges-uber-will-face-next-ye
ars.asp (Page Vanessa, 2021)
18. Uber Business Model: https://fourweekmba.com/uber-business-model/ (Cuofano Gennaro,
2022)
19. Uber Business Model Canvas: Know what led to Uber’s success By J work 29th October
2015, https://jungleworks.com/uber-business-model-canvas-what-led-to-uber-success/
(Jworks, 2015)
20. Yahoo Finance, DIDI stats 2022, obtained from NASDAQ real-time price, date: 09.04.2022
https://finance.yahoo.com/quote/DIDI/key-statistics/
Uber Strategy Case Study, BI Oslo 5/2022
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21. Bria H, DiDi vs Uber: Comparison for drivers, April 15, 2021.
https://www.finder.com.au/didi-vs-uber-comparison-for-drivers
22. Yiley.S, Bellon T, july 1, 2021. How do ride-hailing giants Didi and Uber compare?
https://www.reuters.com/business/how-do-ride-hailing-giants-didi-uber-compare-2021-06-30/
23. Davalos J, After Losing China, Uber’s Stake in DiDi Reaps $8 Billion in IPO, Jackie Davalos
30 June 2021.
https://www.bloomberg.com/news/articles/2021-06-30/after-losing-china-uber-s-stake-in-didi
-reaps-8-billion-in-ipo
24. Choudhery S, Uber’s CEO says the sale of its Southeast Asian business doesn’t mean wider
consolidation, Mars, 26. 2018.
https://www.cnbc.com/2018/03/25/uber-agrees-to-sell-southeast-asia-business-to-grab-after-c
ostly-battle.html
25. Reidy G, Lee M, 2021. SoftBank, Biggest Investor in Didi, Sinks After China Blocks App
ByGearoid Reidy and Min Jeong Lee 5 July 2021,
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-app-just-days-after-ipo
26. Hussain N, June 30, 2021. Didi Global valued at $80 billion in mega US IPO as shares soar,
https://economictimes.indiatimes.com/tech/startups/didi-global-valued-at-80-billion-in-megaus-ipo-as-shares-soar/articleshow/83997622.cms
27. Company marketcap, 2021,Market cap history of Uber from 2019 to 2022, Obtained
9.04.2022 https://companiesmarketcap.com/uber/marketcap/
28. Burgos J, may, 17, 2021. Gojek, Tokopedia Merge To Create Indonesian Tech Giant Valued
At $18 Billion,
https://www.forbes.com/sites/jonathanburgos/2021/05/17/gojek-tokopedia-merge-to-create-in
donesian-tech-giant-valued-at-18-billion/?sh=47c74c554104
29. Growjo, 2022, obtained: 07.04.2022 Gojek Tech Revenue and Competitors
https://growjo.com/company/Gojek_Tech
30. Mansoor I, 01.11. 2021. WeChat Revenue and Usage Statistics (2022),
https://www.businessofapps.com/data/wechat-statistics/
31. Donfro J, 04.11.2019. Alphabet Is Uber IPO’s Surprise Winner With Potential $5 Billion
Stake,
https://www.forbes.com/sites/jilliandonfro/2019/04/11/alphabet-is-uber-ipos-surprise-winnerwith-potential-5-billion-stake/?sh=407d2a1c3dda
32. Richter F, 10.29.2021. Meta Reaches 3.6 Billion People Each Month FACEBOOK,
https://www.statista.com/chart/2183/facebooks-mobile-users/
Uber Strategy Case Study, BI Oslo 5/2022
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33. Dylan Love Dec 4, 2013. Forget Amazon's Drones — Google Is In A Far Better Position To
Change Deliveries Forever
https://www.businessinsider.com/google-self-driving-car-delivery-robots-2013-12
34. Porter,J (@JonPorty) Apr 23, 2019, Alphabet’s Wing drones get FAA approval to make
deliveries in the US,
https://www.theverge.com/2019/4/23/18512658/google-alphabet-wing-drone-delivery-service
-faa-approval-commercial-deliveries
35. Fact #841: October 6, 2014 Vehicles per Thousand People: U.S. vs. Other World Regions
https://www.energy.gov/eere/vehicles/fact-841-october-6-2014-vehicles-thousand-people-usvs-other-world-regions
36. Statista: Number of motor vehicles registered in the United States from 1990 to 2020(in
1,000s)
https://www.statista.com/statistics/183505/number-of-vehicles-in-the-united-states-since-199
0/
37. INRIX Traffic Scorecard Reports U.S. Congestion Grew at Three Times the Rate of U.S.
GDP https://inrix.com/press-releases/inrix-traffic-scorecard-us-congestion-grew-three-times/
(Kirkland, WA – March 4, 2014)
38. Hedges & CompanyL US VEHICLE REGISTRATION STATISTICS from 2012-2022
https://hedgescompany.com/automotive-market-research-statistics/auto-mailing-lists-and-mar
keting/ , (Report 2022)
39. Greenhouse Gas Emissions Factsheet, US Environmental Protection Agency,
https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions#transportation (2014)
40. “UberPOOL San Francisco: Everybody’s In!”,
https://newsroom.uber.com/us-california/uberpool-san-francisco-everybodys-in/ (September
2, 2014)
Uber Strategy Case Study, BI Oslo 5/2022
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Appendices 1: Some figures/Stats of Uber and its competitors
(Figure 1a: Uber virtuous cycle. This is the Uber network effect).
(Figure 2: Who offers the best price in July 2014).
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Figure 3: Uber heat map that shows ride demand area for Uber Driver, sources Uber
Figure 4: Most important things to rideshare drivers, US 2017-2018, sources Statista.
Uber Strategy Case Study, BI Oslo 5/2022
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Figure 5: Satisfaction rates of Uber users in the United States in 2014, sources Statista.
Figure 6: Net income or loss attributable to Uber Technologies from FY 2016 to FY 2020 ($ million)
Existing Markets
Existing Products and Services
New Products and Services
Market Penetration
Product Development
2017: Uber US rides market share 74%
2009: UberCab/Uber Black
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2018: Uber US rides market share 69%
2012: UberX
2019: Uber US rides market share 70%.
2014: Uber Pool
Uber worldwide market share 37%
2019: Uber Comfort
(compare with 32.4% of DiDi and 9,
26% of Lyft)
2020: Uber US rides market share 71%
New Markets
Market Development
2014: Uber Fresh
2009: Uber launch in San Francisco
2015: rebranded UberEats
2011: NYC and Chicago
2016: Uber announced a plan to
2011: Uber expands to Paris
launch autonomous vehicles
2012: Toronto, London
2017: Uber Freight, plan to launch
2013: Mexico, Taipei (Taiwan),
Uber Elevate
Bangalore (India)
2019: online grocery platform
2014: Beijing (China), Lagos (Nigeria),
Southeast Asia
2015: East Africa
2016: South America
2017: More than 24 countries
2019: 69 countries and 10, 000 cities
Figure 7: Uber product & market development timeline, collected from Techcrunch.
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Figure 8: Number of rides Uber gave worldwide from 2017 to 2020, sources Statista.
Figure 9: Number of Active Driver-Partners in the US each month 2012-2015
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Figure 10: 2x2 Matrix comparison between Uber and its competitors, Source: Catolica Lisbon
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Appendices 2: Our team's own analysis of Uber based on Strategy Theories (5 Forces, SWOT,
VRIO, PESTEL)
1. 5 Forces Analysis of Uber
Threat of substitutes
Better public transport:
Medium
Car sharing
Bike/Scooter sharing
Self-driving cars
Bargaining Power of Drivers
Rivalry among Competitors
Bargaining Power of Riders
Switching costs of drivers: Low
Existing rivals (Ola, Lyft, Didi, Switching berries for riders: Low
Value Proposition for Drivers:
Grab): High
Value proposition for riders:
Medium
For Uber Eats: High
Medium
Barriers of entry for drivers: Low
Direct rivals: Medium
Rider information availability:
(Lyft, DoorDash, Grab, Gojek)
High
Direct competition from
niches: Low
Threat of new entrants
Barrier to entry: Medium/High
Industrial Profit Margin: Low
Economies of scale:
Medium/High
1.1. Buyer's bargaining power.
● Bargaining ability of customers: High. Because there are many substitutes, the customer has
more possibilities. But Uber is also well-reviewed and occupies a certain market share. In
addition, Uber is also easy to develop additional services to a better position.
● Switching barrier to demand: Low. In the long term, if the market is centralized when Uber
captures a higher market share. So if the demand shifts to an alternative product, the user will
have less advantage because there are more drivers at Uber, so the competitors will have
fewer drivers, so the waiting time for the translation will increase.
● Value for customers. Compared to direct competitors of ride-hailing services, Uber does not
have much difference when they share the same driver pool. But compared to traditional
competitors, Uber has a shorter and more convenient service time and cost.
Uber Strategy Case Study, BI Oslo 5/2022
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● Distribution channel strength: Low. Because of the convenience of technology, ride-hailing
and food delivery applications are easy to install and use, so in the short and medium-term,
Uber does not have a high advantage. But in the long term, if Uber grows the number of
drivers and users, the network effect will create an amplifying advantage for Uber.
1.2. Bargaining power of suppliers (drivers)
● Bargaining ability of the supplier: Low. Drivers have no authority to set prices, they can only
follow Uber's pricing standards. In the case of high demand, Uber has a Dynamic pricing
strategy to attract drivers operating during peak hours. Moreover, Uber also does not consider
customers as Uber employees, so the policies on labor insurance are not guaranteed.
● Driver's switching cost: Low. It is easy for a driver to be both an Uber Driver and a Lyft
driver or an Uber competitor. They can choose to perform services for which company at any
time. But because the salary difference between the two sides is not much different, the side
with more customers will attract more drivers because they can make more transactions.
● The value proposition for the supply side: Medium/High. Due to the advantage of having
many customers and the profit discount fund, Uber creates many rides so that drivers can use
their time to do better services. From there, they have a more attractive income for working
time
● Barriers to Uber: Low. There is virtually no barrier to entry as a driver for Uber. Just need to
meet basic standards such as having a car and having a driver's license.
Currently, the bargaining power of drivers is low but will increase in the long term. Due to legal
regulations, Uber and similar companies have had to change their policies with drivers such as
insurance, and treat them as full-time employees because many have run services for Uber full-time.
time. According to Business Apps in 2015, nearly 20% of Uber drivers work full-time and there is an
increasing trend. Therefore, in the long run, the negotiating power of the driver will increase to a
certain extent.
1.3 Threats from new entrants:
● Barriers to entry: For a competitor to enter the market to counter Uber now and in the future
is both likely and less likely. In terms of global scale, there will be a huge barrier of
investment to scale both demand and supply to be enough to threaten Uber as that is key to
ensuring matching transactions and ride in the network. Most of Uber's competitors are
formed locally with a more localized element. Companies like Ola, Didi, and Grab were
established before Uber entered that local market and they also have their own characteristics
to adapt to the domestic market. This has also resulted in the mergers of Uber with Didi in
China or Uber with Grab in Southeast Asia. Therefore in the future, the barrier of the
investment amount is the biggest obstacle for new companies to enter the market.
Uber Strategy Case Study, BI Oslo 5/2022
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● A group of technology companies with a large number of users along with modern
technology platforms such as Google, Apple, and Tesla can also be competitors when they
can produce applications to create more services for customers. But Uber also has the
advantage of diversifying its services in food delivery, food delivery, and medical care, which
is also Uber's ecosystem as a barrier for competitors to enter the market.
● The last thing is that when Uber gets too large, its network effect will be large enough for
reducing costs to acquire new customers, change customer behavior and start making profits.
So in a nutshell, it's going to be very difficult to have a global competitor for Uber, but there will be
plenty of small players in local markets. When they are able to localize and offer many services in
their ecosystem in terms of finance, transportation, and housework services, things that Uber has a
hard time adapting to all the local markets.
1.4 Threat of substitute products:
● Car sharing and rental companies.
● Public transport systems are better and more efficient as they expand their network and
quality.
● Applications for sharing bicycles, scooters, and motorbikes.
● The trend that users will work from home more due to post-Covid, many companies have
allowed employees to work from home or hybrid. This reduces demand for ride-hailing
services. But on the contrary, it also helps Uber get new customers from food delivery, goods
delivery, and grocery delivery.
2. Uber SWOT Analysis
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Strengths:
Weaknesses:
- Diverse portfolio. (Cars, Bikes, E-bikes, food
-Competition in all market segments (cab
delivery, etc.)
service, E-bikes, food delivery, etc.).
- Portfolio with a lot of price options (uber black, - Little bond between company and drivers (can
UberX, Uber POP)
easily change to other operators).
- High brand recognition.
- Unpredictable business model (politics, laws,
- High standard cars and service.
etc.)
- No hired drivers (less responsibility)
- Easy to copy the business model.
- Their platform.
- Already been banned or is in juridical dispute
- cashless payment.
with several countries( Germany, Great Britain).
- Rating system for security and trust.
- Dynamic prices (Some customers react when
- Dynamic prices (can be cheap, encourage more the price is too high)
- Bad economy.
drivers in unfavorable times)
- Reliable prices for the customer.
-Very slow and unreliable in other countries.
- Uber has insurance options for their drivers.
-Very fast and reliable in some countries.
Opportunities:
Threats:
- Ensure entering a new market in accordance
- Drivers want higher compensation.
with local regulations.
- gotten some negative attention (pricing, work
- Get all drivers licensed.
environment, etc.)
- Expand services like Uber eat and Uber connect - Relies heavily on word of mouth and social
to increase revenue.
media.
- Self-driving cars (do not need to rely on
- Low income combined with high-quality
drivers)
standards make drivers look for other options.
-Uber air (https://www.uber.com/in/en/elevate/)
3. VRIO of Uber
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Value
Rarity
Imitability
Organization
-Brand image, Uber`s
-Uber is international
-Uber offers great
-Uber as a brand
brand image is well known
with high cultural
quality, especially in
offers financial
as reliable and cheap.
exposure and
bigger cities. It's fast
strength.
- Uber has high brand
international recognition. and reliable at a fair
- Uber is
recognition internationally.
-Uber is
price.
fighting climate
- It is valued at about 17
solution-oriented and
Their “location” is a
change through
billion because of its
adaptive. When they are
mobile app,
“your city our
platform for transporting
not allowed to operate in
everyone with a
responsibility”
people and goods.
a country, they find a
smartphone can
campaign.
-Uber's market share is 39,
way around the
download and get
-Uber evaluates
8% according to Statista.
regulations or operate in
access to their offers.
diversity and
-Uber's product is
other services.
- Uber's marketing
57% of its
innovative because of its
- Uber offers several
communication is a
employees are
platform which gains
types of transportation
vital reason they
men, while 43%
access to all sorts of
methods in all price
have a 39.8% market
are female.
transportation methods and
ranges to satisfy their
share.
-Uber's board of
goods in a short time.
customers' needs.
-Uber in general has
directors is well
-Secure payment method
-Uber has launched an
a good reputation
experienced and
for both driver and
insurance policy for their among customers.
highly
passenger.
drivers that cover a total
- Surge pricing
knowledgeable;
Uber's platform has 93
of 100.000$
makes Uber
this gives a
million active users.
-Uber has large
competitive under
competitive
shareholders like
normal
advantage.
Morgan Stanley to back
circumstances.
them up.
Uber Strategy Case Study, BI Oslo 5/2022
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4. PESTEL Analysis
Analyzing economic, political, technological, social, environmental, and legal factors helps to better
understand the impacts of these macro factors on Uber and the ride-hailing industry during the time
of Uber's startup.
The political policy factors for a new business model like Uber are unclear globally as it is so new
and has never happened in the past. Some governments are supportive of Uber's new economic
model, while others are more compliant with regulations. Because Uber is both a normal taxi
company but also more like a technology company. In the US, Uber faces many heated debates about
its services to consumers, drivers, and the principles of the sharing economy. This clash of positions
has resulted in a lawsuit for the company in the state of California (Gillespie. 2014). Also, many
instances have been recorded where the vehicles have been seized since the driver didn't have a taxi
permit. As a result, Uber is banned in some other countries too, such as Bulgaria, Hong Kong, and
Germany, as well as in certain cities. There has also been additional scrutiny around the world:
France has filed charges based on the ad, the Netherlands has ruled Uber drivers do not have taxi
licenses, and a parking order in Portland. Thus, political challenges can have a deep effect on the
business of Uber.
Uber has used technology and the popularity of smartphones to create a new form of economy which
is the sharing economy. This allows Uber to operate a taxi service without having to invest in owning
a car or driver. As a result, their service is cheaper and easier to catch a ride between the customer
and the driver. On the other hand, people are still considering whether Uber's economic model will
destroy the career opportunities of traditional taxis. Or provide a career opportunity to another group
with a lower or higher salary. But one thing is for sure, Uber has been growing at an incredible rate
around the world, which proves the potential of this economic model. So, when it comes to being
affected by economic factors, they don't affect Uber that much. Uber has achieved very rapid growth
in the face of intense competition excellence based on low prices and great customer service.
The social aspects of business are also important for in-depth analysis. Because the beneficial
relationship between demand and supply is inseparable. The rides are made simply and quickly via
the smartphone application, bringing convenience to users with just a few taps on the app. This also
offers affordable prices and very good customer service. Many of these distinctive features help Uber
grow in popularity. In some places, due to the difference between drivers and commuters, service
prices may increase, but in general, it is not significant. Besides, Uber also faces controversies
related to fair competition, laws on driver background, and interests of parties, but Uber still
overcomes barriers to stand out as a huge challenge. With the competition, it is because its social
image is already very strong.
The past three decades have seen the growth of everything in the economy and its roots in
technology. Likewise, the ubiquity of smartphones, high-speed Internet, cloud computing, and other
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Computer Science-based technologies have enabled Uber to offer a modern service where trip fares
are calculated based on the location of pickup point and destination, users can pay for the trip
directly through the application without cash, as well as all trip information is transparent. Therefore,
technology is one of the very important factors driving the rapid growth of Uber. Additionally, Uber
continues to improvise and use technology intuitively for marketing.
Legal compliance is an important challenge for businesses, and failure to comply can result in huge
fines. Uber's rise is a challenge for legal authorities, who are grappling with whether laws that apply
to traditional services must apply to it.
Uber’s effect on the environment is ever-shifting. Many believe it increases traffic congestion and
fuel usage. But studies have shown Uber hasn’t increased congestion (2). Hundreds of thousands of
drivers have transitioned to electric vehicles globally and on the Uber website, Uber has pledged to
be an all-electric, zero-emissions platform by 2040, with 100 percent of all rides taking place in
zero-emission vehicles, mass transit, or micro-mobility.
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