This is a presentation on Uber's two-sided market strategy. Tools suchas the Porter's 5 Forces, Business Model Canvas and PESTEL analysis have been used.
2. Some disruptive transport systems!
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The Jitney Bus,
Los Angeles (USA) 1914
The Six-Seater,
Pune (India) 2000-2003
Both of these were regulated out of the
market within years of their entry
3. Agenda
• Company Profile
• Core Business
• Growth History
• Offerings and Pricing
• Competition
• Strategies
• Company Analysis
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4. Company Profile
Travis Kalanick
Co-Founder, CEO
Uber Technologies
Founded RedSwoosh
before Uber
Garrett Camp
Co-founder, Chairman
Uber Technologies
Founded StumbleUpon
before Uber
Founded in 2009 in
San Francisco, California
Net Worth:
Over $60 billion*
Employees:
6700
Drivers:
160,000
Industry:
Logistics
Area in Focus:
Cab/Ride-share service
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*pre-funding valuation as of Dec 2015
5. Job To be Done?
Take Person X from Point
A to Point B:
• Conveniently
• Comfortably
• Safely
• Reliably
• At a low cost
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6. Growth History
2008
First idea of a
shared limousine
service
2009
Seed
funding
$200,000
2010
Beta launch in
New York and
full launch in
San Francisco
Funding
$1.25
million
2011
2012
Expansion
US, Paris
Expansion
London
Series A and B
rounds
Funding ~45
million
2014 2016
2015
2013
Service in
over 60
countries,
450 cities
Service in 58
countries,
300 cities.
Launch of
UberEats
Expansion
India,
South
Africa
Expansion
China
UberRush,
UberPool
Series C
$258
million
Valuation
: $3.5
billion
Series D, E
funding $1.2
and $2.8
billion each
Valuation:
$40 billion
Series F, etc.
Over $7
billion
Valuation:
$62.5 billion
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10. Comparison
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Breakdown UberX
Base Charge $2
Minimum Cost $6.55
Cost Per mile $1.15
Cost per minute $0.22
Cancellation Fees $5
Booking Fee $1.55
Breakdown Lyft
Base Charge $2
Minimum Cost $5
Cost Per mile $1.16
Cost per minute $0.23
Cancellation Penalty $5
Trust and Service Fee $1.55
San Francisco, CA
11. Comparison
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Breakdown UberGO
Base Fare INR 45
Minimum Fare INR 60
Cost Per km INR 8
Cost per minute INR 1
Cancellation Fees INR 60
Breakdown OLA Micro
Base Fare INR 45
Cost Per KM INR 6
Cost per minute INR 1
Cancellation Penalty -
Mumbai, India
Allows pre-booking
Gained market share by initial
payment optionsOn-going race to the
bottom
12. Growth Strategies
• Vehicle Lease programmes with Toyota tie-up
• Microsoft partnership for mapping technology
• Partnership with Toyota for self-driving vehicles
• Expansion into courier, food delivery, corporate tie-
ups, other kinds of vehicles. etc.
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13. Pricing Model
Pricing Model of Uber is a strategy-based one. They have a
basic pricing model which includes:
(Base fare + Ride duration based fare + Ride distance-based fare
+ miscellaneous)*Demand-based multiplier
The multiplier increases from 1 to as much as 7 to 8 to attract
more drivers to meet the demand. Fares vary based on the type
of vehicle.
Uber then charges 20% of the amount as a commission.
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14. Promotion
• Free rides
• Referral Code discounts
• Initiatives such as UberIcecream, UberKitten
or the on-going UberPITCH across the world.
• Brand positioning
• Festival-based themes, UberTree,
UberValentines, etc.
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15. Porter’s 5 Forces Model
Strong competition
in most markets, 2-
way competition
Low as contemporary
competitors have
strong backing and
massive networks
Riders have a high
bargaining power as
there are options easily
available
Low - Moderate
Traditional taxi
industry, public
transportation
Moderate as they are
independent and riding
for only 1 isn’t as
profitable
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Supplier Power Buyer Power
Threat from
Substitutes
Threat of New
Entrants
Existing
Competition
Commodity
being traded:
Rides
16. PESTEL Analysis
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History of policy-makers
regulating disruptive
innovation out of existence
to keep incumbent happy
Focus on India and China
Payment preferences in
different markets.
Efficiency, to optimize costs
and productivity
Flexibility, Be-Your-Own-
Boss mind-set, sharing
culture, crowded cities,
parking problems
Smarter collaborative
technology, predictive and
reliable systems,
Autonomous vehicles
Measures for Pollution
control and engineering,
carbon emissions, GoGreen
Regulations catching up,
bans on ride-sharing
cabs in several places
P E S
LET
17. Business Model Canvas
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Value propositionKey partners Customer
Segments
Customer
Relationships
Channels
Key activities
Key resources
Cost Structure Revenue Streams
• Skilled drivers
with cars
• Investors
• Mapping API
providers
• Payment
channel
providers
• Local regulators
• Technological
infrastructure
• Developers
• Product
Development
• Advertising
• Customer
acquisition and
support
• Hiring, on-
boarding and
paying drivers
• Website
• Mobile
applications
• Media
• Online customer
support
• Driver reviews
• Interaction via
social media
Users
• Don't own a car
• Don't prefer to
drive the car
• To travel in style
Cost-efficient
doorstep service
Drivers
• Drivers who
want to work
with flexibility
• People who
want to earn
additional
income
Users
Convenient,
comfortable and
reliable transportation
at a low cost in real-
time by the click of a
button
Drivers
Opportunity to earn
money with self-
defined schedules, just
like a small business
• Driver payments
• Employee salaries
• Technological infrastructure
• Promotion and branding
• Ride-based commission
• Surge-pricing based commission
19. Company Vision
Uber’s vision is to create a smart urban transit system
where people don’t need to own cars. Self-driving
vehicles would take them where they want to, and
bring to their doorstep what they need, when they
need it.
“Transportation as reliable as
running water”
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21. Summary
• A start-up that makes mistakes and learns
from it.
• Brave and passionate founders.
• Always ready to try.
• Vision for the future.
• A great recipe for an investor
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