Uber Technologies SWOT & PESTLE Analysis
COMPANY PROFILE -Uber Technologies
Business Sector :Transportation, delivery, ride - hailing
Operating Geography :Global
About Uber Technologies :
Uber Technologies Inc. is an American multinational global service provider for transportation. UberCab was founded in the year 2009 by Garrett Camp and Travis Kalanick, with a simple thought “is it possible to ride with the push of a button”. Its service products include the Uber application and the website. It provides a medium where customers can contact the drivers in their vicinity for a taxi service. Uber does not hold any cars or vehicles of their own. All its drivers are on contract worldwide and are not considered its employees. Today Uber not only offers transportation facilities but also provides food delivery service with Uber Eats, transportation services based on business needs with Uber for business, and various other sundry services under the Uber Company. Headquartered in San Francisco, U.S., it is one of the fastest growing companies best known for pioneering the ride-hailing business. However legal suits and driver protests are some of its drawbacks worldwide but its robust technology and on-time, dedicated service in unparalleled and admirable. As of early 2020, Uber, has over 22,000 employees.The USP or Unique Selling Proposition of Uber lies in their offer of seamless travel, with the rider walking away after arriving at his destination. Uber's mission statement reads “We ignite opportunity by setting the world in motion.” Uber’s vision statement reads “the company was founded on the grand vision of bringing people together and connecting cities.”
Uber Technologies Revenue :
U.S $14.14 billion - FY ending 31st December 2019 (Y-O-Y growth of +20.3%)
U.S $11.27 billion - FY ending 31st December 2018
Ownership / Major shareholders :
- SoftBank - 15%
- Benchmark - 11%
- Travis Kalanick - 7%
- Garett Camp - 5%
- GV - 4%
- Others - 47%
Competitive Analysis of Uber Technologies
It follows the on-demand-service business model, which implies the company offers its services (transportation, food delivery, etc.) only when there is a requirement. In this type of business model, customer acquisition cost is minimal, the pricing structure is dynamic based on the service offered and does not call for gigantic investments, so expansion is easier. The business model that Uber operates on itself is its major strength. The target markets for the Uber Company are patrons looking for a cab spontaneously, usually the business professionals. The service-based Company’s major assets are the customer itself and Uber successfully accomplishes to keep its customer base satisfied by promptly addressing their grievances through a proactive customer support team. Uber’s biggest competitive advantages are robust brand equity drawing investors’ attention, the company has deep pockets that can be spent to acquire market share, excellent advertising, innovative marketing strategies, its supreme technology, its mobile app which is considered very sound as compared to those of its competitors.
Uber’s major weakness is having unprofessional and unethical drivers on board; their inappropriate professionalism affects the brand’s reputation as drivers are the face of the company. Sexual harassments of female riders have been a major issue to which the company is lacking a proper solution. Uber’s high dependency on technology limits the company to render services only to users who are smartphone savvy. Uber’s presence in highly digitized, developing and developed countries gives it scope for opportunities like an integration of logistics in the existing model, provision of other transport facilities, increasing smartphone users and internet invasion leading to further utilization of Uber. Increasing competition leads to switching of customers and drivers to other alternatives offering a monetary advantage and self-driving cars on the rental basis. Also people without technical knowledge opt for traditional transport facilities along with factors like unfavorable government policies are all major threats to Uber technologies.
The SWOT analysis for Uber is presented below in the Matrix below followed by detailed analysis
1. Robust and easy to use platform and low operational cost. 2. Reasonable fares and timely service with many modes of payments 3. Varied services and vast fleet of vehicles with are not bound by regular taxi rules and regulations 4. Drivers are on contract bases and not employed. 5. Hottest brand with good advertisement giving it a #1 unicorn image 6. Data is Uber’s key asset which it leverages to reap plump profits | 1. Relation between Uber and its drivers lack connection. 2. Top management issues 3. Poor image on work ethics 4. Uber is lagging behind competitors and is still in the red 5. Dependence on technology |
| 1. Potential in emerging markets 2. Increasing internet penetration and smart phone users 3. Car sharing, electric cars usage and other environment friendly methods. 4. Innovative and unconventional services | 1. Varied government rules and regulations due to vast area of operation and Legal cases with other companies. 2. Self- driving cars and autonomous cars in the near future. 3. Local players and Taxi drivers protest 4. Aged population still following the traditional taxi service. 5. Self-drive car rentals eating into call cab market shares |
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Detailed SWOT Analysis of Uber Technologies
Strength
1. Robust and easy to use platform and low operational cost: Uber has a robust app for almost every service it provides. It has an app for cab booking, another for logistics and UberEats. Recently, Uber launched Uber Freight, an on-demand service to connect truck drivers with cargo that needs to be hauled for long distances. The app uses GPS to track the location of both drivers and commuters to calculate accurate time of arrivals and journey time which makes the riding experience better and much more preferred by people. Amongst its services it has an application and a website whose maintenance cost is low. All its drivers use their own car or a rented one; hence Uber does not have to purchase cars nor maintaining them. Overall these factors make their operational cost very low.
2. Reasonable fares and timely service with many modes of payments: Uber has been focusing on price optimization for cab fares since the beginning. It has been charging the passengers far lower than was charged by traditional taxis which have led the business to shift sharply in its favor. Riders are charged on the basis of time and distance travelled. It provides many modes of payments for instance cash, debit or credit card and many e-wallets. The riders are quoted an estimated fare before the start of the journey. Other than that its timely pickup and drop facility has gained customer confidence and loyalty. It has business in over 600 cities across the world and has been a welcome change for people in those countries who had been grappling with arbitrary fares and long wait times for their transport needs. Uber has significantly gained customer base all over the world and has emerged as the preferred service provider.
3. Varied services and vast fleet of vehicles with are not bound by regular taxi rules and regulations: Uber offers diversified modes of transport to serve the indigenous needs of the country or region at large. Some of its services include UberX for private ride in luxury cars, SUVs. UberGo in India with hatchback cars, UberAuto with auto rickshaw in India, Pakistan etc.; and UberBoat providing Beneteau boats to travel in Istanbul. As of 2020, Uber is present in 69 countries, 10K+ cities, $65B gross bookings, 111M MAPCs (Monthly Active Platform Consumers) and 7B trips. In India it has more than 200,000 cars running. Since Uber is only a medium where drivers and riders collaborate with each other hence it is not bound by any government rules and regulations applicable for taxis.
The remaining section under "Strengths" is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threat
This section is available only in the 'Complete Report' on purchase.
Major Competitors :
- Lyft
- Curb
- DidiChuxing
- Grab
- Ola cabs
- Local Taxi’s
- Public Transport
Major Brands :
- Uber Eats
- Otto
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
Open Table Preview| Routematch Software | ITS technology solution provider | 2020 | Acquisition | The deal is going to expand Uber's transit agency customer base and has huge potential to accelerate the company’s autonomous vehicle roadmap. It is also an extension of the company's ongoing effort to grow into new markets. |
| Postmates | On demand food delivery company. | 2020 | Acquisition | Uber ‘s stock price jumped more than 5% post the acquisition of Postmates, this deal will lead to more consumer exposure for restaurants and also Uber. Thus, boosting its overall service market share. |
| Autocab | Technology | 2020 | Acquisition | Uber expands its reach in UK by this acquisition. It will be able to connect taxi drivers with customers in regions of the country that currently lack services |
| Careem | Technology | 2019 | Acquisition | Uber has acquired Careem’s mobility, delivery, and payments businesses across the greater Middle East region, with major markets including Egypt, Jordan, Saudi Arabia, and the United Arab Emirates. This is considered the biggest-ever technology industry transaction in the greater Middle East |
| Grab | Transportation | 2018-Underway | Merger | With this strategic merger retreat, Uber would get a 27.5% stake in its rival’s business and would shift its 500 employees and customers over to the Grab app. |
| Toyota | Automobile | 2018 | Alliance | With this alliance Uber aimed to create a self driven shuttle that would expand the capabilities of its ride sharing app. However, it is not yet clear which company will own the cars. |
| Jump | Bike share startup | 2018 | Acquisition | This deal was valued at around 200 million. This deal allowed Uber to start up its section Uber Bike which will allow app users to book a JUMP bike the same way they would book a cab. |
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References used in Uber Technologies Analysis Report
1. About Uber, its story and vision for future - https://www.uber.com/us/en/about/
2. Tracking Your Earnings | Driver App | Uber - https://www.uber.com/en-GH/drive/resources/payments/
3. Uber stock price, revenue, funding rounds, financials and metrics for FY 2019 - https://craft.co/uber/metrics
4. Uber Newsroom: latest news in India - https://www.uber.com/en-IN/newsroom/
5. The problem with Uber lies within its own management - https://www.forbes.com/sites/haroldstark/2017/04/24/the-problem-with-uber-lies-within-its-own-management/#3ebee9aa18b9
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Uber Technologies SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting.
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