Uber is a taxi service that links passengers with independent drivers using an app. It is a privately owned company that was started in 2009 whose headquarter is in San Francisco, California, USA. (7). The firm serves over 633 locations worldwide, and its major services include transportation and food delivery. The firm employs over 12000 people and generated $6.5 billion in sales in the fourth quarter of 2016. (1). Uber has implemented four pricing systems: pool trips, which is the lowest price when an individual gets a taxi and needs to share it with another 2-3 people. A premium ride costs the most, while an economy ride costs less than a pool ride. (4).
SWOT ANALYSIS of Uber Technologies Inc
Uber’s consumers appreciate it for various reasons. It enables a more convenient, simpler, and less expensive route (7). But the company also inspires conflicting feelings. The local authorities, conventional taxi drivers, and a few Uber drivers oppose the startup’s policies. Uber should adjust due to these opposing opinions. Many doubt the company’s potential to dominate the transportation business during 2015.
In this scenario, a SWOT analysis of Uber Technologies Inc looks suitable. It will help the globally recognized company to investigate its opportunities and risks. It will also help determine Uber’s strengths and weaknesses.
Strengths of Uber Technologies Inc
Global Market Leader: Uber has become the world’s biggest ridesharing service. Uber is now present in 93 countries and 900 cities in 2020, with 103 million monthly customers and 5 million drivers. Uber created ridesharing and hence has a monopoly on it. They have a 77% market share in the US and complete over 40 million trips every month. (3).
Recognized Brand: Uber has maintained a high level of brand awareness in more than 50 countries worldwide. In terms of brand value structure, it has already surpassed General Motors, Honda, and Ford. It is anticipated that it will improve its services in the coming years due to the adoption of new technology elements. Uber’s market capitalization has already reached $75 billion in 2020. (3).
Dynamic Pricing Model: Uber’s flexible pricing policy is one of its strong aspects. Price increases occur as demand increases. With demand-based pricing, Uber keeps drivers satisfied. This mindset has helped both drivers and the industry. This company pays well at night, in bad weather, and on vacations in certain countries. (2).
Convenience and Accessibility: Uber is less priced and handier than taxis. Uber’s app-based innovations now make ridesharing simpler. They are no more waiting at taxi stands or on the street. Uber’s popularity is due to its ability to make ridesharing more accessible. A simple phone call may schedule a smooth journey. (1).
Weaknesses of Uber Technologies Inc
Unfair Business Model: Uber’s economical model is under pressure from governments and labor groups. Rather than classifying its drivers as workers, Uber labels them as independent contractors, denying them as an employee along with several privileges. Massachusetts and California are suing Uber for allegedly misclassifying its drivers. (5).
Workforce Dependency: Uber’s significant reliance on its employees and the internet has not been a good thing. The unpredictability of its drivers has tarnished the company’s reputation. There have been more than 100 sexual harassment and abuse complaints against Uber drivers in the United States in the last year. (5).
Multiple Scandals: Some people don’t like Uber anymore because of many bad things that have happened. The company’s reputation has been tarnished by sexual harassment and sexual assaults. A board member of the company had to step down. There was public outrage #DeleteUber over these charges, which led to many people canceling their Uber accounts in 2017 alone. (5).
Significant Losses: While Uber’s revenue has grown, the company has been losing money since 2009. As rivalry increased, the firm decided to reward its drivers and provide discounts to its consumers to outpace them. Uber’s net losses in 2016 surpassed $2.75 billion as a consequence of this investment. (7).
Opportunities for Uber Technologies Inc
Logistics: Uber might potentially start its network of movers and packers for the benefit of the general people, as, after all, they don’t have a scarcity of resources. (2).
Expand through Acquisition: Uber has bought Routematch, a transportation software company. Because of the purchase, Uber may now extend its public transportation services. For $2.65 billion, it purchased Postmates to expand its Uber Eats food delivery business and supply daily products to customers. (7).
Delivery Efficiency: Recent circumstances necessitated delivery services. Uber Eats, the company’s food delivery business, already works with Uber and might expand. In July 2022, the business plans to launch a North American and Latin American supermarket delivery app. (2).
Air Taxis: Morgan Stanley projects a $1.5 trillion global market for electric air taxis or flying cars by 2040. Uber’s Elevate service will include a flying taxi built by Hyundai. The prototype can reach 60 miles per hour at 180 mph. (8)
Threats for Uber Technologies Inc
Data Breach: Because it is a global corporation, it sells its products all over the globe and also imports raw materials from other countries. A negative alteration in the switching scale might harm the development of its benefits. (3).
Intense Competition & New Entrants: Uber has been hit hard by Lyft and other providers like Ola in India. Increasing competition may eventually lead to lower industry rates. Transportation gets cheaper when drivers and passengers have more options. (7).
Laws & Regulations: When Uber enters a new city or nation, the taxi industry often opposes it. Due to statutory changes, the firm can no longer function under certain situations. Uber struggles to meet legal standards in numerous countries and territories. (6).
Pricing Policy: During the Eid holidays and other festivals, many Uber users opted out of the service and used other forms of transportation instead, claiming that the fee was too expensive. Later, there was no response from Uber to a request for comment on this matter. (6).
RECOMMENDATIONS
By investigating the SWOT Analysis of Uber, we learned that this company still has some flaws, especially in satisfying the customer. Moreover, laws and regulations are creating problems for this business to a certain extent. It is suggested that it might minimize some of its weak areas by using a more dynamic customized pricing policy. Other than that, this company is globally recognized and has created values for the general public.
REFERENCES
- Uber.com. (2018). Sign Up to Drive or Tap and Ride. [online] Available at: http://www.uber.com [Accessed 9 Jan. 2018].
- Centobelli, P., Cerchione, R. and Esposito, E., 2017. Environmental sustainability in the service industry of transportation and logistics service providers: Systematic literature review and research directions.
- Higson, C. (2015). The value of Uber. Forbes. Web.
- https://www.washingtonpost.com/technology/2019/08/29/even-after-ubers-ipo-long-shadow-deleteuber-still-looms/
- https://www.businessinsider.com/uber-scandal-timeline-2017-5#one-week-into-the-storm-crisis-experts-agree-uber-needs-to-make-a-big-statement-and-that-might-mean-firing-kalanick-5
- https://www.reuters.com/article/us-uber-transit-idUSKCN24H22H
- https://www.cnbc.com/2020/03/06/the-flying-taxi-market-is-ready-to-change-worldwide-travel.html
