Michael Porter developed a conceptual framework for industry analysis, identifying the threats to profitability from five forces of competition in a relevant market. Porter$$s Five Forces analysis helps analyze the level of competition within an industry. It is especially useful when starting a new business or when entering a new industry sector. According to this framework, competitiveness does not only come from competitors. Rather, the state of competition in an industry depends on five basic forces:

threat of new entrants

bargaining power of suppliers

bargaining power of buyers

threat of substitute products or services

existing industry rivalry

Today, a sixth force is often added$$ the threat of a disruptive technology. The collective strength of these forces determines the profit potential of an industry and thus its attractiveness. If the five forces are intense, almost no company in the industry earns attractive returns on investments. If the forces are mild however, there is room for higher returns.

Uber is an on$-$demand transportation technology service that utilizes a ride$-$hailing smartphone app that connects riders with drivers. As one of the first $$on$-$demand$$ services to operate on a smartphone platform, Uber has cemented itself as the leader in the rideshare market $($with Lyft solidly in second place$).$ For passengers, it$$s a way to get reliable rides with a private driver. For drivers, Uber provides an opportunity to make extra income. Since its inception in California in $2009,$ Uber has grown to more than $41\mathrm{.}8$ million Uber users in the U$.$S$.$ alone and $75$ million worldwide $($as of December $2018),$ spread across $789$ cities in over $84$ countries.

DISCUSSION QUESTION:

Using Porter$$s Five Forces model, analyze and briefly discuss how these external forces affect Uber and define its competitiveness within the context of the transport$/$ride$-$hailing industry.