Free Report Sample on Uber Significant Forces

Introduction

To achieve company goals and objectives an operation management plan is important. A relevant management strategy takes into account past, present, and future factors. Some of the forces influencing the success of Uber ride sharing economy are pricing strategy, business model, marketing, global network, and technology. These forces have led to the fast growth of the company which is worth around $120 billion today (Shoshanna Delventhal, 2020).

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Uber adopted a popular pricing model that ensures a win-win for everybody in the chain. The pricing model of Uber is one of the affordable globally hence rapid growth and even an explosion in some countries. The model ensures that drivers get higher pay compared to other taxi services at the same time charging customers lowly, they achieve this by cutting a small amount from the total payment. Uber also has loyalty programs in place for loyal customers making transportation cheaper. This pricing strategy has made Uber popular among millions.

Evolution in technology has also been a big driving force behind the fast growth of Uber. Today Uber users can book a ride with a single tap compared to other ride-sharing services and previous technologies which had several stages and troubles. The technology also allows better management of costs and making of cashless payments. The app also gives access to great deals and has security features informing loved ones of your whereabouts (Tamberino, 2015). Therefore, high technology has proved to be the core reason behind the fast growth of Uber.

Uber has in place a comprehensive marketing strategy that has ensured its fame and popularity. These strategies employed by Uber to promote its services include the use of social media platforms, brand promotions, engaging celebrities, and the use of free rides (Miller, 2019). It also has in place rating and review systems that have also been an effective marketing strategy. To retain its customers and attract new ones Uber has a loyalty program.

The networking model is also one of the reasons behind rapid growth. The business model is strong and profitable; it allows the company to deliver the best services at a lower cost as its operating costs are low.

Key Obstacles

Despite rapid growth Uber is faced with several obstacles including legal and regulatory challenges, internal struggles, and global issues. Major Cities in the United States are considering regulating Uber. A major challenge faced by Uber as it expands globally is banned by some countries (Noushin Laila Ansari, 2015). To address these challenges Uber has to develop a robust mechanism to ensure it meets all regulatory requirements and reduces friction with authorities.

Uber’s ride-sharing services are faced by internal challenges especially where its drivers are dissatisfied with company policies. With the Rideshare rating system, a driver is required to maintain a five-star rating. When a drive a driver has less than a five-star rating they risk suspension or permanent deactivation. So drivers are left at the mercy of passengers who have different views of ratings and also depending on their moods. Uber drivers have also expressed their dissatisfaction with Uber’s payment rate where they claim the company is taking advantage of them (Noushin Laila Ansari, 2015). Uber also have in place minimum pay per hour but to qualify a driver has to meet some requirements, for example, being online for a minimum of 50 minutes per hour and accepting over 90 percent of ride requests, these requirements have been criticized as its deters Uber drivers from working for other rideshare competitors yet the drivers are independent and should be free to work for any company at their own will.

Legal challenges also face Uber where the company has many lawsuits having been filed against them. For instance, not meeting regulation in the Americans with Disabilities Act of having wheelchair friendly vehicles, this is hard to meet as Uber operates on driver’s personal cars. Lobby groups are also giving pressure to local governments where Uber operates to block them as they claim they are hurting their businesses since they are not subject to licensing as other taxis are (Noushin Laila Ansari, 2015). These pressures have led to Uber being blocked in some cities. Lawsuits against Uber no adhering to safety measures have also been filed.

As Uber also tries to expand internationally it has been faced by some hurdles. So far Uber has established its roots in 82 countries, this can be interpreted as a success but not according to its motto “Available locally, expanding globally” as they have not been able to get operating licenses in other countries.

Changes

Uber app has not remained the same since its inception in 2009. It has exhibited some changes to adapt to market needs and to maximize profit while delivering the best services. Dynamics in technology is the main change that has been witnessed. Uber has invested heavily in technology and Smartphone apps with several upgrades being done regularly. Investment in technology has led to continued growth and minimization of operations cost since a lot is being done in one place rather than having a presence everywhere they operate. It has also led to the realization of other business opportunities like food delivery. Optimization of the app user interface has led Uber being popular because of: ease of use, efficiency, and learning ability.

Uber has also developed a surge pricing algorithm to deal with a situation where demand is high than supply. To bring equilibrium in this situation the surge pricing algorithm increases the charging rates. The algorithm serves two purposes: attracting more drivers to regions of high demand and satisfying those customers who need their services the most.

Key Trends

Despite, Uber’s rapid growth, competition in the ride-sharing industry is on the rise from new players, for example, Lyft, and to remain afloat in business Uber has adopted several developments. Adoption of these changes was necessary so as to increase revenue and improve ride sharing experience.

Impacts

The key developments that have Uber have announced in the recent past have gone hand with continued growth of Uber globally. On September 17th 2020 Uber announced their second partnership with public transport with Hyderabad Metro Rail Limited after successful partnership with Delhi Metro Rail Corporation to launch journey planning (IndiaSA Comms Team, 2020). These partnerships are aimed at making transport efficient, saving money and time for riders, and towards improving productivity of cities. Uber is not only aiming at making transport efficient, they also want to reduce Carbon emissions.

During lockdown s as result of Corona Virus pandemic carbon emission fell by 17% this has made city planners rethink their infrastructures. Uber has not been left behind; they have now launched Uber Green aiming at zero-emissions by 2040.

Conclusion

Uber and Volkswagen have launched a pilot project in Berlin involving electric vehicles. Volkswagen’s e-Golf car models are vehicles are the vehicles to be used in the pilot scheme. These vehicles have zero-emissions and Volkswagen have been using it since 2018; this is good as it would make realization of “Uber-Green” concept (Wolfsburg/Berlin, 2020). Uber is not only environmentally cautious; it has also put in measures to safeguard rider’s data.

Uber pulled out of a merger deal with GrubHub. This was as a result with trust issues which GrubHub had. The issues included allegations that GrubHub were using misleading websites and phone numbers so as to charge at higher rates, and known to be setting up websites for restaurants that are not in their platform. To avoid getting into trouble with its users Uber walked away from the merger talks.