Started as Uber Cab by Travis Kalanick and Garrett Camp in the year 2009, it is now an American Multinational company working as an online transportation network known as Uber Technologies Inc. It market and operates through a mobile app, customers with their smart phones can submit a trip request and Uber drivers who run their own vehicles gets the information and are routed for the trip.
The worth of Uber by late 2015 was estimated around $62.5 billion and ranked as 48th position in the top most American companies. Its business model has been copied by several other companies and formed a trend called Uberification (Yang, Yang and Wong, 2012).
An organization needs to examine and make changes as according to the internal and external environmental factors that may affect company’s performance. SWOT is an organized planning tool which is used here to identify and evaluate issues related to various environments for Uber:-
There is no question about Uber’s popularity amongst its customers. Uber has the customer-centric business approach which leads to a low-margin profit for drivers, and they don’t prefer at all. Uber does not need to follow rules as traditional drivers but they are regularly fined for skirting the regulations. France, Germany, India, United Kingdom and Netherlands are few countries that have fined Uber. Thus, Uber has to work on its weaknesses and exploit opportunities by using its strength and overcome threats against the company (Vanek, Mikolas and Zvakova, 2012).
To analyse performance of Uber in the market and comparison to their competitors The PORTER’S five forces analysis is used here:-
The Threat of new entrants- Getting a patent for various technologies proves to be a limitation for new entrants to enter the market, but low capital investment and easy to follow business model attract them. Hence, threat of new entrants is medium.
The Threat of substitutes- Alternatives or substitutes like public transports, car pool services, and bicycles are easily accessible and less expensive too. Hence, the threat of substitutes is high.
The Power of buyers- Choices are available to customers which can make them switch as according to their need. Hence, the power of buyers is medium (Anderson, 2014)..
The Power of Suppliers- Rental car companies and drivers has a high bargaining power as Uber need them for running its services. Thus, the power of suppliers is high.
The Power of competitors- High competitions is there from taxi and limousine services. They are expensive, but they provide a broader range of services. Competitors like Lyft and Wundercar are gaining their market. Therefore, the threat of competitors is quite high.
The above analysis shows that the competitive level is quite high for Uber. But still Uber has maintained its priority over the other competitors and substitutes with quick, efficient and inexpensive services (Chakravarthy and Coughlan, 2011).
There three processes that a company follows to get the customer and they are segmenting, targeting and positioning. The three process of Uber is discussed below: -
Segmentation means to find out what types of customer exits and for Uber following segment of customer exists:-
Targeting means to select the ones to which services of Uber can be best served off. “Transportation needs to be reliable as running water for all, in all the parts of the world,” is what Uber’s version for its customer. This makes it clear that for Uber anyone who wants to go from one place to another within the city is the target customer. Initially in the starting, Uber focused only on the customer segment that was wealthy. But now at the present day, Uber served anyone who needs its service and ready to pay for it. This has helped a lot in increasing the number of customers for Uber (Batt, Nohara and Kwon, 2010).
The positioning means implementation of all efforts to achieve the target customer by making its services in accordance to the target market. Uber is trying hard to attract its target customer. It is evolving in the way the world is moving; making areas of the cities more accessible and convenient reach, and helping people and their cities getting closer. Uber is using different Medias to promote its service to its target customers, for example, emails, FM channels, and online advertisements (Chakravarthy and Coughlan, 2011).
The market strategies of Uber are:-
The marketing strategies of Uber are a success that is the reason that they are the leaders of privatized taxi service. It holds the maximum share in the market. More offers for first-time riders can be started by the company to initiate them to use the services again. Along with regular reminder through the app can be sent to loyal customers regarding their travel plans for which they always book a ride with Uber. A more user friendly app could be introduced and special instruction for a senior citizen can be included in the app (Rapp, 2007).
Few recommendations that Uber company may use to improve its working and customer experience are as follows: -
Deregulate fares- Uber has a controversial pricing model according to which it can demand any amount of money at the time of high demand which a customer can always deny, but it leaves a bad taste for the customer regarding the company. Thus, this pricing strategy should be changed.
Cashless transactions- many a time passengers fear that their credit and debit information get leaked if they use them. Thus, option for cash payment should also be there for such customers (Enoch, 2015).
Licensing – all the drivers hired by the company should have proper license and experience before starting the work for the company.
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