CASE ABSTRACT

Uber, originally known as UberCab, was started by Travis Kalanick and Garrett Camp in San Francisco, California, in 2009. Its target audience was young, educated, tech-savvy urbanites, more likely to rent than own their own homes, who generally got around via public transportation, biking, or walking. The company grew rapidly and by 2015 it was providing carpooling services in 300 major cities in fifty-eight countries around the world.

As Uber moved forward into new territories, however, it got entangled in many regulatory and legal hassles. The company had to figure out how to sustain its lead in the heavily regulated, controversial, competitive, and ever-changing taxi industry. Moreover, despite a landslide market share Uber was operating at a loss. How to lower costs and become profitable was another challenge for this young and aggressive company.

Additional information about the company are as follows:-

1. Current Performance

Background: Founded in San Francisco, California in 2009.

Aug 2013, raised $258 million from Google Ventures.

December 2014, Chinese Search Engine, Baidu, invested $1.2 billion, value at $66 billion.

In 2015, Uber earned $1.5 billion in revenue, tripled 2014 revenue.

Strategic alliance with Didi.

1. Strategic Posture

1. Clearly stated
2. Mission: Making transportation as reliable as running water everywhere, for everyone.
3. Objectives:
   • Offer service to everyone, including luxury and affordable options.
   • Remain cheap, fast, and efficient while trying new services.
   • Transaction conveniencemobile payment globally.
   • Growing revenue and earnings for shareholders.
   • Merging intangible code and technology with the tangible world where customers live in.
   • CEO Travis mentioned in an interview four Phases of Uber Objectives:
     1. Create the worlds biggest taxi networks, connecting riders with safe, reliable, and convenient transportation providers at a variety of price-points in cities around the world.
     2. Create the worlds biggest P2P logistics platform, allowing anyone to either request or provide physical delivery of a myriad of goods and services.
     3. Shift from 100 percent human-driven logistics to 100 percent machine-driven logistics. Profit immensely.
     4. World domination.

4. Strategies:

• Rapidly expand product offerings to utilize technology.
• Move things, not just people to improve convenience.
• Differentiation by being cheap and fast.
• Merging intangible code and technology with the tangible world its customers live in.
• Classifying its drivers as independent contractors.

5. Policies:

• Protecting community.
• Safety for all.
• Emphasis on convenience and affordability.
• Fight the laws against the taxi industry.

6. International: the core of Uber is to expand globally; their mission, objective, and strategies reflect their international operation.

Answer ALL questions in this section based on the case given. [Total: 60 marks]

1. How is ride-hailing different from taxis? (2 marks)

2. What was Ubers pricing strategy? (2 marks)

3. How does Uber utilize marketing promotions to gain new customers? (2 marks)

4. Describe some of Opportunities and Threats to UberCab (12 marks)

5.. Identify some of the Strengths and Weaknesses with the company. (12 marks)

6.. Explain Uber unique operations and logistics which work well for the company. (12 marks)

7. Uber has an advanced Information Systems (IS) which gave it competitive advantage. Evaluate how has the IS helped the company to expand globally. (10 marks)

8. Provide an analysis of strategic factors and strategic alternatives and recommended strategy. (8 marks)