Uber Technology Inc. is an online based business which does not have any cab and has drivers operating as independent contractors to provide services to customers through Smartphone app. It was started in 2009 by Travis Kalanick and Garrett Camp. Since then the company has made a disruptive change in the cab transportation industry by delivery an efficient and enjoyable experience of quick response time and transfer of payment to customers. It changed the cab business from street waiting to minutes of delivery of services globally. It is headquartered in San Francisco, California in the United State. Uber Technology Inc. operates in over six hundred and thirty three (633) cities worldwide. Besides cabs transportation Uber also delivers food to customers in the United States and few countries where it has established its business model.
Uber Technology Inc’s objective is to provide a technological based transportation and take customers everywhere and every time throughout the day and night. As stated by Ommani (2011) Uber is regarded as the largest taxi company operating without having any car on their own. Uber business model is based on the delivery of application known as Uber apps of software to car owners whereas the company does not have cars on their possession. The Company employees over 14,000 people worldwide and majority of its employees are drivers who do not have permanent contract job arrangement. It has offices in almost every part of the world such as Asia, in India, South Africa, China, and United Kingdom, which makes it one of the largest companies in terms of workforce. Uber Technology Inc. is valued at USD 51 billion and over the years it has been voted as the best taxi company. Though other taxis have complaint of unfair competition since it does not pay for other levies as traditional taxis, it has remained the most profitability with constant growth graph since it was established.
Most importantly, Uber’s products are all virtually offered to customers. It has application which customers need to download and install into their Smartphone so that they can be able to request for ride and order for food delivery. Through its apps, customers are able to monitor and track the location of cab and inform them when the car arrives. The company also offers other products such as Ubertax, which a cheap or a low budget option of cab, UberBLACK, where consumers can privately drive to their destination, UberPool, UberPop and UberXl. In order to expand its revenue basket, Uber Technology Inc. also deliver food and other products to customers at their homes and office through its apps which offers restaurants opportunity to download and use apps to receive orders from clients.
More Read: Animation institute in Mumbai
However, Uber steady growth and success is creating a lot of challenges in the market in the form of legal and regulatory, technical and social obstacle. The taxi industry is making appeal that Uber is getting unfair advantage in the market. It does not pay for several levies since its does not have parking lot like the traditional taxi. The company also has been accused of not taking vetting of its drivers serious and therefore, creating an unsafe situation in the market. For instance, in India there has been accusation of rape raising the issue of safety among Uber’s customers. In addition, Uber has faced several lawsuits, some of them filed against the company by independent contractors because of low payment. Therefore, the company has witnessed challenges which require strategy to turn it out and make them business more sustainable to meet expectation of customers which can drive it to profitability. Therefore, this paper intends to discuss challenges or risk which Uber is facing in the market, growth strategy, sectoral actors
Analysis of current policies, practices and activities
Uber is managed by the CEO Mr. Travis Kalanick and it has also other directors and managers which participate in daily running of the company. It also has a board of eight members which was expanded recently to bring new ideas in the management of the company. According to (), the board recently voted to strip off the CEO Mr. Travis Kalanick the majority voice in the voting which means that the decisions of the board must be made or arrived at by the majority of the board members. In order to penetrate the market, Uber Technology Inc. has partnered with other companies to deliver efficient services to customers. For instance, the company has partnered with banks such as Softbank investment deliver payment services to customers. The gist of partnership is to boost its image in the dominant market and build trust among its customers which has proved to be working. This is because the company has experience constant growth over the year in every market it has ventured. It has also partnered with restaurants to deliver services to customers.
However, Uber exercise business partnership to drive its growth in the market. It is a similar method which the company is applying to partner with tax drivers and owners. It has allowed the company to have several cabs globally without purchasing or owning any in the market.
Uber growth is driven by its competitive prices in the market. The company has app which determine the prices for each destination therefore, it does not have constant prices. This has made it to edge out traditional taxi from the market since, Uber suddenly become cheaper and faster in service delivery. According to (), Uber Technology Inc. price is calculated based on distance covered making it a low cost cab. In case of price change, customers are always alerted especially when prices are higher. Though the intention of increasing prices sometimes has been questioned by customers, the intention is to cover increase in gas and other risk factors. The strategy of the company is keep its prices lower and allow customers to determine prices based on distance rather than putting constant prices. This has worked well for the company, because the traditional taxis have been complaining about Uber prices trying to force the government to intervene so that Uber can have similar prices which traditional taxi. However, Uber CEO believes that customers always want something new in the market and in this case, prices are gift which Uber has offered to customers. Therefore,
Uber Technology Inc. provides some different unique services to customers based on the customers’ preferences. Mostly, it provides its UberX, which is low – budget product. In this case, drivers are using their own cars to transport customers to their destinations. It also has UberTAXI which is an app which links licensed taxi drivers to passengers. It offers various services based on clients needs because some clients preferred to have a private drive on their new sedan which is one of the high end services it offers its clients. Therefore, the diversity of Uber’s products gives more advantage in the market and therefore, it helps in retaining clients and getting new customers for its business. Research has indicated that traditional taxi has one type of service and therefore, it is impossible for them to compete equally with Uber in the market. And therefore, Uber products diversification drive its growth and make it more competitive compared to other taxi in the market. For instance, Uber has launched UberRUSH in the New York City for delivery of packages to customers’ houses and offices. At the same time, it has also launched UberFRESH and UberEAT which are programs for delivery meal to customers through partnership with local restaurants to provide meals to clients within ten minutes. It has allowed Uber to diversify its products and expand its revenue basked instead of depending on taxi alone as other companies competing with it in the taxi business.
Supporting Lobby group
It is evidence that Uber is a late comes into the market and therefore, it has focused a lot in profit making for stakeholders rather than corporate social responsibility (CSR). However, since 2016, the company has changed its strategy and pays a lot of attention to other interest which affect the society. According to (), Uber Technology Inc, has spent several millions of dollars in lobby and campaigns to support federal employees and other policies which can created impact in the lives’ of federal employees. Uber has lobbied for federal legislation which would permit federal employees to travel on official business and get refunded for the transport they use. This has helped the company to create partnership with federal government employees hence increase the number of its customers for the sake of growth and profitability (Dong, Christina, Julia, Edward, Anjali, & Rohit, 2014).
Uber Technology Inc. has also supported the Department of Defense (DoD), in the construction of various national security programs. In the last financial year, the company funded some programs being undertaken by the DoD and the department of Energy. Uber’s policies are to champion for sufficient energy and therefore, through sponsorhip of various energy programs it would be able to assist millions of people. This will also endure the company to customers and help in building clients through programs being carried by the partner companies.
Uber Technology Inc. long term sustainability depends on the way it plans to manage it future risks. The company faced several risk from drivers which could get out of control if not properly addressed. In order to be sustainable Uber technology should to provide insurance cover to its driver. This will able to reduce noise or legal suite against the company from its drivers because the laws which were passed recently require employers to offer insurance covers to employees. In a matter of fact, the provision of insurance will make sure that the company avoids facing lawsuit which have been witnessed in the previous years and focus in delivery.
Training of Managers and Drivers
It is a fact that Uber Technology Inc. has been accused of taking vetting and training of its drivers serious, and this can be a major setback if not addressed. Therefore, the company has come up with a various programs to train drivers which can help in improving driving skills. It will help in reducing the risk from drivers, who are negligent and bring a lot of professionalism which is a key to success in cab business. It will also reduce the liabilities which occur through payment of insurance costs (Deen, 2014).
Again, there has been accusation of unprofessionalism conduct against managers at Uber Technology Inc which can be a threat to success of the company. Over the years, Uber has had in house surveys which indicate that there is a gap between senior majors and juniors which has caused several employees to quit their jobs. In order to maintain its growth and profitability, Uber must also subject its managers to training on human resources programs and business etiquette which will help in making sure that all managers adopt professional conducts and professionalism is ejected in the way employees are handled (Milt, 2016). Without training of managers, it is likely for the company to lose its best employees to rivals in business which can cause the company profit. Trainings will improves coordination and working relations among employees and between senior managers and other employees. It will also help in improving performance since employees will be able to focus on delivery rather than problems solving which will never be a bigger issue after trainings.
Improve Competition tactics
Uber business model can be copied and applied by different companies in the same rides for hire services such as curb, Leyft and Sidecar. Research as indicated that several riders can emerge in the future which could a threat to the existence and dominance of Uber in the market. In addition to day competition from traditional taxi, limos, air travel and chartered buses can be threat to the company if best ways to address some of the problems which customers have raised are not properly addressed. Therefore, customers’ competition requires improvement safety which has been some of the issues customers have been raising. Uber make sure that customer’s information or data are protected to avoid losing customers to rival companies. The safety improvement will benefit both the driver and customers therefore, it will in maintaining customers and getting new customers which is a key to growth for the company.
Nevertheless, unpredictable demand in the market is also one of the challenges which Uber is likely to face and this could be solved with product diversification. Currently, Uber provides technology driver product and it must be competitive in the industry where all companies compete for rates. In order to keep itself competitive and maintain its customers, Uber technology Inc. must improve its apps security and ensure that its products cannot be copied and applied by different companies easily. Last year, the company management agreed to protect the patent of its app to avoid being used unknowing with other companies such as lefty. It is also advisable for the company to invest in Research and Development (R&D) which will allow the company to improve the content of its apps (Phillips & Rohit, 2014). It will make sure that the company is on top of every other company in terms of high end services hence it shall be able to maintain customers and get new customers as well.
It could be possible for the company to upgrade its database security system to minimize the risk of personal account information being accessed by the third party, The issue of personal safety and customers data being accessed by third party has been some of the issues which clients have raised and likely to be raised by competitors in the market. Therefore, through security upgrade, the risk of being hacked will be addressed and therefore, competitors or traditional taxis will not have any issue to bring against the company. This shall not only gives the company a competitive advantage against its rivals, but it will improve its performance in the market is likely to result to profitability.
Reformulate Uber’s Culture Value
It is advisable for Uber Technology Inc. to reformulate its cultural values so that it can reflect the diversity at work and to be more inclusive and positive conduct. In order to achieve the reformulation values, Uber should partner with respected and established organization with experience in organizational change to regurgitate the values which have significant result from employees. The company should also consider redefining its values in a manner which is accessible and can easily be understood. It should also adopt values which are inclusive and can contribute to a shared environment, including putting a lot of emphasis on team work, incorporating diversity and mutual respect and inclusiveness as a key cultural value for the company. Research established that reformulating culture value has been used by other values such as Nissan and Coca Cola to recognize operation in some of the diversify environment to make sure that company succeeds (Boerner, 2015). The strategy improves condition of working environment and also help in creating bonds among employees therefore, it makes employees to focus on better service deliver. If Uber Technology Inc. deploy similar strategy it is likely to improve working condition which would result to growth of the company.
Uber technology Inc. Should takes an initiate to reduce the significant number of values which are redundant or which have been used to justify poor behavior and do not help the company in its growth strategy such as Always Be Hustlin, Let Builders Build, Toe Stepping and Meritocracy. The company should encourage top leaders to show values on their daily activities and nurture more inclusive and collaborated culture (Kuehner-Hebert, 2015). Leaders who are able to show these values should be brought on board to be part of the process of redefining Uber’s values and should be allowed to be the role model in the company. All Uber’s top managers should be ready and willing to reformulate values to employees and embrace communication.
Address Employee retention
Employees play key role in growth of the government and departure of top employees can affect the performance of the company. Therefore, the significant consideration should be taken to evaluate the reasons which make employees are motivated to leave the company and address vital drivers of workers turnover. Uber should also engage a prominent consultant or conduct internal studies to identify and solve attraction which is higher in than expected in the company. The method of evaluation should be agreed and implemented so that good employees can be retained (Clark, 2016). Research has established several Uber employees have decision to leave the company is based on the employees retention which several of them feel is not enough and therefore, it is possible for company to contact evaluation to identify better employees they can retain with a better salaries or turnover.
Review and Asse Uber Pay Practices
It is appropriate for the Uber technology Inc. to audit and review its compliance with several state and federal laws equal pay system. The company has faced court cases against its payment system and therefore, it is appropriate for the company to take time and audit or evaluate its compliance to make sure that compensation is issued to legitimate business related reasons (Richards’, 2015). The senior managers should permitted by the management to engage directly with outside law firms on legal issues which have been at the center of Uber controversies. The engagement will allow the company to get professional advice which will help the company to mitigate legal problems and also support in the implementation of the agreed legal issues. In order to make sure that Uber Technology Inc. appreciates the price of equitable pay, senior management and the board should be given responsibility to overseen the process of implementation to make sure that the objective set are achieved. This will allow the company to identify companies which should be paid and pay on time to avoid lawsuits against the company. It is therefore, importance for the company to ensure the culture of compliance is adopted by the organization and all issues agreed upon are implemented within the time frame. Paying partners on time is also importance and it will require the company to select few employees and put in charge of the whole operation so they can work together with contracted lawyers to makes sure the all process is efficient.
The emergence of Uber Technology Inc. has made several services to follow the Uber business concept. There are other companies which provide shared services and there are also companies which still want to start similar business as Uber to deliver products and transportation model. For instance, Cargomatic Company has developed an app which can assist in filling space on trucks. The company which operates in California and New York is known as “Uber for truckers” because it links shippers with drivers who are seeking for more shipment. This therefore, indicates a very big shift in the industry where people are the infrastructure rather than some buildings or some fleets of cars. Uber is facing several challenges in the market which includes marketing, which include legal and regulatory issues both within and outside the United States. It is evidence that most laws which protect consumers are usually target taxi service while Uber Technology Inc. has categorized itself has ride sharing services making Uber an agent in business and customers are contractors. However, several courts do not view Uber as an agent rather than a party, compelling Uber to comply with the necessary laws. In some cases, Uber have stopped operating in other areas due to strict laws which want them to get licensing like traditional taxi.
It is therefore, evidence that Uber must define itself differently and implement sustainability strategy to help the company address certain challenges. Uber should therefore, invest in research so that it can be able to understand certain local laws before deciding to invest in the market. This will help the company to avoid facing legal challenges which has been rampant in almost all countries it had shown interest. For instance, it is advisable to hiring services of local legal team to advise the company prior to investment. In order to address challenges of untrained drivers and complaints of payment which are port of Uber internal challenges, Uber should train its drivers and almost improve the vetting criteria. This help the company to address the issue of incompetency among its drivers which has been some of the key challenges threaten the growth of the company.
In addition, it is also essential for Uber to reformulate its cultural value so that the company can have set values adopted by the management. The company has witnessed cases of poor service delivery and management gaps and lack of diversification. This therefore, affects the company’s performance and through cultural reformulated Uber would be able to improve working relations among its employees which would create positive impact in the organization’s growth.
Despite the challenges which the company has faced since its formation, Uber is widely known and has grown to a larger corporation. It has become popular among independent contractors and consumers making it a widely recognized and used cab globally. Research has indicated that supporters of Uber believed that it has revolutionized the transportation service industry and therefore, through implementation of recommended sustainability plan, the company would be to overcome challenges it s experiencing in the market, operate efficiently and realize constant growth worldwide.
Boerner, H. (2015). Attention Boards & CEOs: The Conference Board Has Important Insights to Share To Help Your Company…Survive and Succeed! https://ga-institute.com/Sustainability-Update/tag/uber/ , 28 (10), 128-215.
Clark, M. (2016). Sustainable development report. Prosper and the UN Sustainable , 5 (2), 10-56.
Deen, A. (2014). Business Lessons On Social Responsibility From Uber And Lyft. A Social Revolution In People Development , 51-78.
Dong, J., Christina, F., Julia, L., Edward, P., Anjali, S., & Rohit, S. (2014). UBER: Driving Change in Transportation.
Dong, J., Christina, F., Julia, L., Edward, P., Anjali, S., & Rohit, S. (2014). Uber: Driving
Change in Transportation. The Case Study of Uber, 12 (8), 5-45.
http://fletcher.tufts.edu/~/media/Fletcher/MIB/pdfs/B236%20Student%20Case%20Studies/Uber%202014.pdf , 72-95.
Frue, K. (2016). PESTLE Analysis of Uber: Operation and Management. Journal of
Business Analysis, 2-35.
Hall, J. V., & Krueger, A. (2016). An Analysis of the Labor Market for Uber’s Driver-
Partners in the United States. The National Bureau of Economic, 2-35.
Kuehner-Hebert, K. (2015). Corporate Governance: Lessons Learned From Uber’s Board. Journal of Business and Ethics , 24 (9), 15-45.
Milt, D. J. (2016). The Uberfication Of DeliverieS. https://www.parcelhero.com/content/downloads/pdfs/uber/uberreport.pdf , 24 (8), 10-65.
Mitchell, M. 2012. The Uber Market Performance. Analysis of the Market, 2-35.
Ommani, A. R. 2011. Strengths, weaknesses, opportunities, and threats: Case of wheat
farmers of Shadervan. American Journal of Business Management, 30 (12), 5-56.
Phillips, J., & Rohit, K. (2014). Uber & Ride-Sharing Report: The $650 Billion Question. http://media.cygnus.com/files/base/MASS/document/2017/01/SharesPost-Ride-Sharing-Uber-Lyft-Research-Report.pdf , 38 (12), 5-68.
Richards’, C. (2015). How Uber fools or intimidates just about everyone in the end. file:///C:/Users/Masterpiece/Downloads/uberexcerpt.pdf , 16 (10), 12-38.
Uber . 2016. SWOT Analysis and Recommendation. Ubar Cab Global, 2-35.
Wallsten, S. (2015). The Competitive Effects of the Sharing Economy: How is Uber Changing Taxis? Studying the Global Economy, 2-35.