Issue/Problem Identification
Central Facts in the Case
The central fact in the case is that Uber operates in a highly dynamic market with multiple underlying implications. The market is marred with excessive regulations, controversies, competition, and changing consumer tastes and preferences. Despite these challenges, new entrants in the industry face low barriers to entry.
Major Overriding Issue
Data privacy concerns are a major overriding issue in Uber’s operations. The U.S. Privacy Act and other international laws call for the Personally Identifiable Information (PII) about consumers to be protected. Privacy advocacy groups raised concerns over the company’s collection of sensitive geolocation and travel records data, whose access is unfettered to Uber employees.
Sub-Issue
Negative publicity is one of the sub-issues that should be addressed. Company attitude against its business rivals such as Sidecar and Lyft and bending legal regulations created negative publicity. Besides, Uber employees were involved in disreputable business practices. Ordering and canceling rides from their rival companies to limit the competing drivers’ availability while creating Uber demand affects the company’s brand image negatively.
Stakeholder Analysis and Management Evaluation
Stakeholders
Uber Drivers
Uber drivers are among critical stakeholders in the company. They operate as independent contractors; however, they are bound by the company policies and standards of practice. Therefore, any disreputable conduct in the line of duty would misrepresent the company’s practices.
Customers
Customers consuming Uber rides are also major stakeholders in the company. Creating customer loyalty is central to Uber’s business success. With repeat clients, the company would be able to create a seamless stream of revenue.
Company Management
Uber’s management role in enhancing company success is imperative. The management bears the sole responsibility of making not only effective but also ethical and legal business decisions. Contrariwise, wrong decisions would plunge the company into lawsuits and a negative brand image and potentially affect its competitiveness in the taxi industry.
Effectiveness of Management Decisions
Low-Leader Pricing Strategy
The management’s pricing strategy has been core to Uber’s continued success in the sector. This strategic move has been a competitive advantage allowing Uber to increase its customer base, generate revenue, and expand into new markets.
Launch of UberVIP
This decision was flawed as it could not boost customer loyalty among the targeted Uber customers. While it gave customers with over 100 rides an elite status that granted them better access to Uber drivers bearing high ratings, it provided nothing tangible to the riders. This failure allowed riders to switch back and forth between the company and its business rivals.
Recommendations and Implementation Considerations
Uber should invest more R&D on the changing consumer trends to manage market dynamism. The R&D would enhance Uber’s capacity to capitalize on differentiation and innovate new products that match emerging market developments and competitive pressures. Uber should also explore possible partnerships with authorities in their potential new markets. Initially, Uber entered a new market only to deal with the legal consequences afterward. However, investing in R&D for the country market before entry would ensure the company minimizes negative publicity and identifies possible partnership opportunities. Besides, this aspect would reduce the lawsuits and fines incurred due to unapproved and forceful market entry, as witnessed in Portland.
Uber should review its data privacy policies to protect consumers’ PII. It should limit the amount of information collected and stored in its databases. For instance, Uber should not store sensitive geolocation data about its riders. Unauthorized access to this information could lead to a security breach and potentially harm the clients.
Uber should also focus on ethical business practices. The company should develop a code of ethics for its employees that discourages unprofessional or unethical conduct while in the line of work. This move would also minimize the disreputable practices used by its drivers to compete against the Uber rivals.
One of the critical implementation considerations that Uber should consider while affecting some of the recommendations is employee engagement. Although the company drivers operate as independent contractors, their morale in doing business with the firm is integral to their productivity and Uber’s overall performance. In this case, some areas, such as the code of practice, should be developed and implemented after a thorough employee engagement. This strategic move would create a feedback system that would allow Uber to collect information about its rivals’ mode of operations and possible legal and ethical countermeasures that could enhance its competitiveness.
With Uber customers being integral stakeholders in the company operations, customer participation should be considered while reviewing the data privacy policies. Consumers should be allowed to present their views on the type and amount of personal data they could voluntarily allow to be collected and stored in the company databases. This aspect would enable the company to create adequate information for product differentiation and enhanced service delivery to its customers. Product differentiation would allow Uber to create customized products that meet specific consumer needs. Subsequently, the company would be able to establish loyal customers.