Analysis of Uber American Company

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Introduction

Uber is an American international public company from San Francisco that has created a mobile application of the same name for finding, calling, and paying for taxis or private drivers and delivering food. The company was founded in 2009, and at first, it was intended only for travel in business class cars, but the transition to economy class made it possible to enter the international market. In 2016, a project was launched to transport passengers by helicopter and boat (Jiang et al., 2018). In addition, the company implements a variety of services for the transportation of pets, children, food and pizza delivery, car-sharing, and ranking of taxi services from “minibuses” with the search for travel companions to business and executive class. However, the company lacks a product that reflects its social responsibility to improve its weaknesses and reputation in the eyes of customers, drivers, and the state.

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SWOT Analysis

Competitors

Uber has the largest headquarters of any competitive company. Lyft, DiDi, OlaCabs, and Yandex. Taxi is the key competitors of the company. Lyft has a stronger position in the United States. OlaCabs and Yandex.Taxi are regional leaders in India and Russia, respectively. Indirectly, Uber’s competitors are local taxis and public transportation. Cities such as London and New York have a culture of local taxis, yellow or black cabs, more prevalent than in any other region where this problem does not occur.

Strengths

Even though the mobile applications market has a relatively short history, it has rapidly developed since it became a global giant in 2009. Uber has become a recognizable brand around the world with a streamlined driver and vehicle verification system. The high level of service is controlled by the company with a dual rating system, and in addition, there is no longer anyone in the service supply chain between the driver and the passenger. Furthermore, Uber has an unlimited fleet of vehicles, which creates a choice for drivers who have more freedom in customer choices and work schedules.

Weaknesses

However, the company also has weaknesses. Firstly, the uniqueness of their idea is embodied only in details. Otherwise, the same scheme of work is quite simple and can be reproduced by other competitors. Secondly, the loyalty of drivers is in doubt, but this problem is relevant for all taxi services operating through a mobile application. Other concerns are related to the confidentiality of personal information. As the company stores, many personal data and travel data monitors drivers during their trips without orders, and many more. It jeopardizes information that has already leaked into the hands of attackers once (Angrist et al., 2017). In addition, there are risks for both drivers and passengers when, for several reasons, one of them conducts misconduct. Finally, the business model is highly unpredictable and depends on many factors, all of which cannot be considered.

Opportunities

The company’s capabilities lie in regional development, reaching those countries where Uber is not yet available. Local taxis often have a high price tag and long waiting times, so the company should develop this niche. It should also include a promising direction of electric vehicles, which will reduce fuel costs and will be able to improve the environmental situation in countries. This goal will allow the company to conduct more socially responsible activities, which it also needs to develop as a large giant (Hammond & Christensen, 2016). Also, given the problematic epidemiological situation globally, the company can offer its services for the delivery of patients to the hospital with appropriate safety measures and other social transportation, for example, children to school.

Threats

Threats are often related to legal issues, and new regulations in different countries can lead to the illegality of Uber. For example, in connection with a new Supreme Court ruling in the UK, Uber has transferred all its drivers to official cooperation. Therefore, drivers will now count on a minimum wage and other social security conditions (Browne, 2021). In addition, the number of fraudulent incidents and driver strikes can damage a brand. Finally, the emergence of high competition always leads to lower prices in the market, which can also scare off drivers and cause a drain of staff and profits to compete with companies.

Uber has encountered very often challenging norms and setting new trends in the industry that undermine the tradition of transportation. Despite this and the company’s past driver strikes, stolen personal information, and other incidents harming the brand, her forward-thinking approach proved to be an effective strategy for attracting investments that continue to this day. The SWOT analysis only confirms this, given the company’s already long history, which is now surrounded by many threats and has weaknesses.

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Recommendation

The main product in demand in the US market is organizing buses for children to take them to school and back. It will meet the company’s social responsibility standards, make life easier for parents and help develop this service in the regions since its experience will already be gained. In addition, this product will improve the brand’s reputation in the eyes of the federal authorities and help develop security aspects that are sometimes called into question in these business processes, so the branding and packaging of this product will be covered. Furthermore, experience in project support and quality control will allow the company to improve the company’s existing services, such as UberKids and UberPool. Attracting investments for a social project will help restore the brand’s reputation and enlist the support of the authorities, which will increase the loyalty of drivers and the reliability of the company in the eyes of customers. Therefore, this project will help smooth out possible threats and weaknesses of the company, identified during the SWOT analysis.

Business Environment

Macro Environment

Every business organization is part of the environment in which it operates and partly shapes it according to its goals, opportunities, and threats. In the case of Uber, like any other international global company, the macro environment primarily depends on many global issues, which each local region has its specific regulators. Taking all of this data into account is a titanic job for analysts, as it includes the political, cultural, technological, intercultural, and social aspects of each country or region where Uber offers its services. Moreover, the current situation with the pandemic has brought urgent adjustments to people’s daily lives and political decisions, which also affect the company’s activities.

Economically, Uber, despite its threats and weaknesses, is considered a successful company. The global pandemic has introduced restrictions on human activities, such as social distancing and the transition to remote work. At first glance, these two factors have a positive and negative impact on the company’s activities, but in general, they turned out to be more favorable for Uber. The need to be at home has dramatically increased people’s need for delivery services, which the company abounds in. Social distancing has also forced people to use taxis more often, making it more challenging to keep their distance on public transport (Nian et al., 2020). For the first quarter of 2021, the company reported record increases in profits on several points (Uber Investor, 2021). What is more, Uber provides many jobs, which has a positive effect on the economy of any state, but the issues of low wages due to competition or tax problems are more related to political factors.

The political factors the company faces include conflicts with the law and long-standing traditions of shipping and handling. The success of Uber does not leave any government indifferent, which often considers bills aimed at regulating the activities of the company itself (Baron, 2018). Questions about whether drivers can be official employees of the company or only contractors, the corresponding competence of drivers are often raised in countries such as the USA, South Africa, and the UK (Henama & Sifolo, 2017). Uber cannot influence these factors, so the company can only strengthen control over the legal aspects of such problems.

Uber is a company that has grown on technology that has become an integral part of people’s social lives. Maximum usability and continuous development of technological aspects in various areas of the company, such as marketing, interface, applications for cooperation with Uber, allow the company to stay afloat in an age of lightning-fast changing trends and evolving technologies. In a world where every second count and the pace of activity constantly increases, services’ ergonomics comes first.

Marketing success in modern times also depends on the social and environmental responsibility of any large company. Legal issues are one of Uber’s weak points, as a vast number of temporary drivers can be incompetent without a license to taxi or carry many passengers, emotionally unstable, or, conversely, demanding on wages, which creates specific problems for reputation and compliance with the law. Environmental Responsibility for the prospect of switching to electric vehicles fully meets current trends, which, on the one hand, can solve the problem of the human factor of errors in drivers. On the other hand, the loss of a considerable number of jobs, imperfection, and distrust of technologies at first can create unforeseen losses for the company.

Micro Environment

Uber’s competitors are listed above; the rest of the microenvironment is represented by customers, service providers, intermediaries, the marketplace, and the mechanisms of the organization itself. Due to the manufacturability and ergonomics of the application, there are no intermediaries between the service provider, in other words, drivers, couriers, and the client. The mechanism of operation of the organization itself is based on the needs of customers and legal norms, and in general, it is only the program code of the application that selects the necessary drivers or couriers according to the client’s requirements. The interaction of company employees with customers and drivers occurs only in emergency or conflict situations. Thus, the company’s microenvironment is mainly represented by the technical side, which regulates all the organization’s activities.

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Marketing Plan

Segmentation and Target Audience

The presented recommendation based on the SWOT analysis results implies the use of the idea of transporting children by buses to schools using Uber funds. The market segmentation in the company is presented very clearly and is oriented not only to the specific needs of the end customer but also to his financial condition. The company provides more than five different categories of taxi rides in various countries, ranging from economy class to elite transportation (Camilleri, 2018). It is worth noting that their parents, who also have different financial positions, will be financially responsible for the transportation of children, and therefore it is possible to use the experience of segmentation of the transportation market for this purpose.

Naturally, this approach requires an upfront investment, regardless of the level of popularity of the future service. More extensive investments will be required by megalopolises, where the number of schools and students is much higher than in the regions. The geographic factor is closely intertwined with the demographic one. In big cities, the company’s funds will allow considering the travel time of traffic jams, the route of arrival for children, and much more. Drivers will need the correct category of driver’s license and particular competence in transporting children since the level of safety must be higher due to the company’s responsibility. The behavioral factor should consider the cultural and social predisposition of families to trust their children to a third-party company. Again, this service will be more relevant in big cities, where both parents are more likely to be employed. Therefore, according to the analysis, the service is initially better tested in large cities. Distribution to the regions, taking into account the successful experience of megalopolises, will make it easier to implement this service with relevant advertising and the absence of traffic congestion.

The Marketing Mix

According to Porter’s five forces model, this concept seems to be the most advantageous since competition for this service is presented either locally or does not exist at all. Therefore, with the successful example of Uber, there is a possibility of new players emerging, but given the company’s broad capabilities, it will fight in a competitive battle. Threats can be expected from two sides: bargaining power of suppliers or competition of public transport; the bargaining power of buyers, as well as the threat of substitutes, as customers have the right to distrust their child’s company, preferring to use their own time or that of relatives for safety reasons. Consequently, the critical factor in introducing the service to the market is precisely the safety of children, which requires the driver’s competence and better and more stringent control over the health of vehicles, building the safest routes, and maintaining control inside the buses. These ways of choosing customers constitute the intra-industry competition of the company within the framework of this service.

The 4P model allows better thinking about product introduction to the market. It is a service inside the Uber app that allows clients to connect to deliver children to a specific school. Specially equipped buses will travel along a particular route, collecting children from their homes, bringing them to school and back. The fee will be deducted for each trip since children’s attendance can be regulated by school quarantine, morbidity, personal plans, and much more. The company’s means already include the ability to create a convenient and comfortable platform for the implementation of such an idea technically and a massive headquarters of drivers with a large number of statistical indicators that are best suited for such activities.

Furthermore, advertising of this service is possible using the capabilities of schools, which, among other things, can become the sponsorship of the company. Therefore, with the help of the management of schools that have parental contacts, this service will be offered and tested for the first time, mainly in big cities. As part of the pandemic, this will reduce the burden on public transport and require specific actions by the company to provide all the security measures against COVID-19.

Success Metrics and Global Considerations

Social responsibility is evident within the framework of this activity, and even Uber may even enlist the support of government agencies. In case of high investment in some poor regions, the company will make this service accessible for parents. As a result, children will be able to communicate more with their peers and be less at risk due to less contact with strangers. In countries with large populations such as China and India, the demographic aspect of the issue needs to be considered. In other words, the capacity of buses in such regions should be higher. To increase respect for different ethnic cultures, the advertising campaign should contain messages that eradicate racism and discrimination. In close cooperation with schools and the state, this will help instill respect and tolerance in children from childhood, which have been actively promoted in the modern world. In addition, the capabilities of many buses allow Uber to take children on the road with various cartoons or educational programs, and attracting an additional person will add variety to the school life of children by conducting various activities that stimulate and prepare children for the school day.

Conclusion

Uber already has to improve its reputation and social responsibility as they represent company’s weaknesses. The delivery of children by buses to school will allow not only to use the existing strengths of the company, such as the convenience of the application, the availability of competent personnel, and the calculation of travel times and routes but also to enter a new undeveloped market, increase the reputation and become a socially responsible company. Preparation of this service requires extensive preliminary analysis and investment. However, the company already has most of the funds and capabilities to translate such an idea into reality.

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References

Angrist, J. D., Caldwell, S., & Hall, J. V. (2017). Uber vs. taxi: A driver’s eye view. National Bureau of Economic Research, 23891.

Baron, D. P. (2018). Disruptive entrepreneurship and dual purpose strategies: The case of Uber. Strategy Science, 3(2), 439-462.

Browne, R. (2021). Uber employment rights setback is a ‘gut punch’ to its prospects in the UK. CNBC. Web.

Camilleri, M. A. (2018). Market segmentation, targeting and positioning. In Travel marketing, tourism economics and the airline product (pp. 69-83). Springer, Cham.

Hammond, S. C. & Christensen, L. S. (2016). Corporate and Social Responsibility: Road Map for a Sustainable Future. Bridgepoint Education.

Henama, U. S., & Sifolo, P. P. S. (2017). Uber: The south africa experience. African Journal of Hospitality, Tourism and Leisure, 6(2), 1-10.

Jiang, S., Chen, L., Mislove, A., & Wilson, C. (2018). On ridesharing competition and accessibility: Evidence from uber, lyft, and taxi. In Proceedings of the 2018 World Wide Web Conference (pp. 863-872).

Nian, G., Peng, B., Sun, D. J., Ma, W., Peng, B., & Huang, T. (2020). Impact of COVID-19 on Urban Mobility during Post-Epidemic Period in Megacities: From the Perspectives of Taxi Travel and Social Vitality. Sustainability, 12(19), 7954.

Uber Investor. (2021). Uber Announces Results for First Quarter 2021. Web.

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BusinessEssay. 2022. "Analysis of Uber American Company." August 2, 2022. https://business-essay.com/analysis-of-uber-american-company/.

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BusinessEssay. "Analysis of Uber American Company." August 2, 2022. https://business-essay.com/analysis-of-uber-american-company/.