UBER Worldwide, Business Proposition, Funding Mechanism, Taxi Industry Impact, Porter's Five Forces, PESTEL Analysis, BCG Matrix, SWOT, Levels of Service, Customer Engagement, Value Proposition, Disruptive Strategies, Global Expansion

1. Prepared For :
Strategic Management

2. INTRODUCTION
• Transportation network company operating Uber Car transportation and
food delivery mobile apps
• Headquarters in San Francisco, USA
• Founded in 2009 by Garrett Camp and Travis Kalanick (CEO)
• Operating in 570 cities worldwide
• Revenue : 20 billion USD (2016)
• Number of employees: 6700
• Follows dynamic pricing
• Provides services as UberX, UberPOOL, UberLUX, UberGO, UberEATS,
UberRUSH, self driving cars and helicopter service
• International expansion in 2011. Launched their services in India in the
year 2013

3. BUSINESS PROPOSITION
• UBER has no fleet of its own. Different from other taxi services as it
connects the licensed drivers and the customers
• Drivers (Car Owners) join UBER and get access to driver’s app
• UBER charges 20% Commission on fare and driver gets rest of 80%
• Dynamic pricing helps UBER to charge premiums

4. FUNDING MECHANISM
• Started in 2009, Travis Kalanick sold their startup “Red Swoosh” for USD 19
Million which helped in the initial capital
• The rest of the money was raised via a series of private equity fundings totaling
USD 8.2 Billion as of 2016
$11M led by
Benchmark
capital
$37M by
Goldman
Sachs,
Menlo
Ventures
$258M by
Google
Ventures
and TPG
Growth
$1.2B by
Black Rock,
Google
ventures
Additional
$1B from
Times
Internet,
Foundation
Capital
$1B by
Microsoft,
Bennett

5. TAXI SERVICE INDUSTRY BEFORE UBER

6. Intensity of Rivalry Buyer’s PowerSupplier’s Power
Threat of Substitutes
Threat of New Entrants
PORTER’S FIVE FORCES MODEL

7. Intensity of Rivalry Buyer’s PowerSupplier’s Power
Threat of Substitutes
Threat of New Entrants
Barriers to Entry : LOW
• Low protection from new firms
• New entrants can start with less
capital initially
• Virtually zero switching cost
Substitutes Threat : HIGH
• High buyer inclination to substitute
• Traditional taxis and public transport
Buyer Power : HIGH
• Many substitutes available
• Switching cost is very low
• Sensitive to price changes
Rivalry Determinants : HIGH
• Large number of firms (Lyft,
Ola etc.)
• Fast market growth
• Similar cost structure
Supplier Power : MODERATE
• Depends entirely on drivers
• Have power to negotiate higher
price
• Uber has the power to set
terms and rates

8. BCG MATRIX
Relative Market Share
MarketGrowthRate
• Growing at a very fast rate
• Market share is still low on
rides as a whole (market
leader only in taxi-apps)
• Needs a lot of cash
• Raised $8.2 Billion in funding
rounds as of 2016
• Can become a Star
LowHigh
LowHigh

9. STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
•Global player in over 50 countries and 200
cities
•Brand Equity
•Enhanced user experience & higher
customer satisfaction
•Unlimited fleet of vehicles and no full time
drivers
•Low operational Cost
•Dependent on Manpower and Internet
•Misbehaviour of drivers directly affects the
brand image
•Low Customer loyalty
•Unpredictable Business Model and Pricing
•Low Entry Barriers
•Rising Competition
•Customer retention and brand
switching
•Future is unclear due to lack of
regulations
•Conflicts with local authorities
•Self driving and flying taxis
may yield unending possibilities
•Uber’s Garage services can generate large
sums of revenues
•More drivers will reduce the estimated time of
arrival.
•Increasing demand for Used cars
•Poor public transport

11. •Government require
commercial licenses
•Political discussion about
minimum wage laws for
taxi industry
•Tax issue
•High disposable Income
•Growing corporate sector
•Price sensitivity decreases
•Population density is
growing
•People follow fast paced
lifestyle
•Increasing demand for
transportation in Urban
areas
•Competition with other
ride share companies
•Improved Navigation
•Schedule rides in advance
•Growing demand for
electrical and hybrid car
•Uber Pool
•Health issues due to
pollution
•Regulations and
Standards
•Ban on ride sharing
•Social Media Impacts

12. LEVELS OF SERVICE
• On Sep 2016, Uber launched its first self-driving car service in Pittsburgh and San
Francisco in Dec. 2016
• In July 2014, Uber launched Helicopter service in NYC
• In 2016, same urban transportation with flying vehicles in Sao Paulo
• On Apr 2017, Uber announced to launch a new patent purchase program named UP3 to
facilitate patent purchase
UberPOOL- Economy service promoting Ride
Sharing
UberEATS Allows food delivery by Uber
Drivers in 71 cities
UberRUSH- Courier package delivery in NYC,
SF and Chicago
UberBOAT available in Istanbul is a water
taxi service
UberGO available in India for a ride in
hatchback
UberTAXI allows booking of licensed taxi
through UBER with additional booking fee

13. CUSTOMER SEGMENT
1. Early Adopters
• Tech-Savvy users
• Smartphone users
• Customer who values time
• User with limited spending powers
2. Special Category
• Uber for Kids- A special service dedicated to parents who wants their kids
to reach home from schools
• Uber for senior citizens- Special service for senior citizens with huge
concessions. It make for up to 30% to 40% of total rides in many cities

14. VALUE PROPOSITION
CUSTOMERS
• Minimum waiting time
• Price less than normal fares
• Cashless rides and can track
location using GPS and ETA
DRIVERS
• Additional source of income
• Part time work option and
flexi timings
• Drivers get paid to be online
even without cab request
Key differentiators are Price, Time, User experience, Convenience options
• Cost Structure- Salaries to employees, technological infrastructure & marketing
expenditure
• Revenue Streams- car rides on per Km/Mile basis, Surge pricing, Uber X, Uber cargo,
Uber SUV etc.

15. • Different cab models to cater to all
• Surge Pricing technology
• Variation in Service
• Rating Scores
• Legislation and Requirements
• A mechanism called "Real-Time ID Check" requires some drivers to
occasionally take selfies before accepting ride requests, to verify identity
and prevent drivers accounts from being compromised
REVENUE GENERATION MODEL- WHAT MAKES UBER DIFFERENT

16. UBER’s DISRUPTIVE INNOVATION
STRATEGIES
• Elimination of various transaction costs
• Encouraging increase in productivity of assets and employment rates
• Use of cutting edge technology
• Variable or flexible (and often more affordable) pricing model
• Convenient and frictionless payment
• Implementation of quality control through a rating system

17. UBER’s GLOBAL EXPANSION
• Fastest growing start-ups in Silicon Valley in 2009, with a reported $1.5
billion revenue to an estimated worth of USD $62.5 billion by late 2015
• First billion rides in 6 years ; second billion took only 6 months
• Strategize which countries when as a first step
• Prepare their code for internationalization
• Build tools to efficiently communicate system-wide changes
• Adapt to local needs

18. UBER’s MARKETING STRATEGIES
• Early Adopter Advocacy
• Referrals
• Reviews
• Stunts
• Partnerships

19. • Added ease of use of cabs with technology for the traveler
• Reduced the hassle of waiting and searching for the cab on the
street
• Increased the availability of rides
• Eliminated the stinky smell which people hate in the cabs
BLUE OCEAN STRATEGY

20. CONTROVERSIES AND CHALLENGES
• The class-action suit claiming Uber drivers as employees has been
settled at 100 million USD which makes them remain as independent
contractors. By doing this it could gain some confidence from the
drivers as it agreed to change its business practices, including policy for
deactivation of drivers
• Austin’s stricter regulations that include mandatory fingerprinting of
drivers reflect a shift in the composition of Austin’s city council. Uber
did not agree to the rules and decided to exit from the city. It could
have negotiated and brought changes as Austin is a major
entrepreneurial hub including the famous SXSW annual conglomerate
of film, interactive media and music festivals

21. CONTROVERSIES AND CHALLENGES
• Hungary government labelled Uber as illegal dispatcher services,
any driver found working for Uber would loose the license to
drive for the next three years. Hence Uber exited from Hungary
not to cause further trouble to its drivers and to safeguard itself
• In countries such as Brazil, Canada, China, France, Germany, India,
South Korea, Japan, Spain Uber is faced with severe opposition
from taxi drivers, government regulation, and competition form
similar ride sharing apps

22. CONTROVERSIES AND CHALLENGES
• In China both Uber and its local rival Didi kuaidi have faced severe
protests from taxi drivers, in some cities Uber offices raided by police
• In France ‘Thevenoud law’ was passed which forbids UberPOP, a low
cost service that employs drivers who don’t have commercial
licences. Violent anti-Uber protest were held
• Like in France, in Germany too UberPOP was suspended as it violated
law
• In Japan the taxis were very prevelant and Uber faced tough
competition. The largest taxi company Nihon Kotsu gave a new
service called Line Taxi by partnering with local messaging company
called Line

23. UBER IN INDIA
COMPETITVE ADVANTAGES
• Traditional operators were
unorganized and unreliable-
failed to arrive on time
• Uber services made it possible to
book cabs at short notice and for
short distances
• Cheaper than any other service
CHALLENGES
• Faced a legal lawsuit and was on
the verge of being shut down
• Rules that Uber should get the
license by fulfilling by owning its
own cabs, providing designated
parking slots, etc.
• Heavy competition from home
grown taxi sharing services

24. WHAT DOES FUTURE HOLDS FOR UBER
• Enormous challenge from Google, GM driverless cars
• IPO route expansion
• China- a big threat
• More acquisitions ( Till now 3 acquisitions- Geometric
Intelligence, Otto, deCarta)

25. REFERENCES
• https://www.cleverism.com/strategies-uber-is-using-to-disrupt-the-taxi-
industry/
• http://www.oneskyapp.com/blog/uber-global-expansion
• https://www.slideshare.net/MichaelReed11/uber-analysis-mgmt-180
• http://scholarprof.blogspot.in/2016/05/porters-five-forces-analysis-on-
uber.html
• https://www.linkedin.com/pulse/20141128105936-1160896-using-uber-to-
explain-business-terms

26. THANK YOU