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Cold Call podcast series

Uber’s Strategy for Global Success

How can Uber adapt its business model to compete in unique global markets?

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As Uber entered unique regional markets around the world – from New York to Shanghai, it has adapted its business model to comply with regulations and compete locally. As the transportation landscape evolves, how can Uber adapt its business model to stay competitive in the long term?

Harvard Business School assistant professor Alexander MacKay describes Uber’s global market strategy and responses by regulators and local competitors in his case, “ Uber: Competing Globally .”

HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.

BRIAN KENNY: The theory of disruptive innovation was first coined by Harvard Business School professor Clayton Christensen in his 1997 book, The Innovator’s Dilemma . The theory explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, and affordability where complication and high cost are the status quo. Think Netflix disrupting the video rental space. Over the years, the term has been applied liberally and not always correctly to other examples, but every so often, an idea comes along that really fits the bill. Enter Uber, the ridesharing behemoth that turned the car service industry on its head. In a few short years after launching in 2010, Uber became the largest car service in the world, as measured in ride count. Last year, Uber drove 6.2 billion riders. Today’s case takes us to London in 2019, where Uber is facing the latest in a long list of challenges from regulators threatening their ability to continue operating in that important market. In this episode of Cold Call , we welcome Alexander MacKay to discuss the case entitled, “Uber: Competing Globally.” I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Presents network.

Alexander MacKay is in the strategy unit at Harvard Business School. His research focuses on matters of competition, including pricing, demand, and market structure. Alex, thanks for joining us on Cold Call today.

ALEX MACKAY: Thank you, Brian. Very happy to be here.

BRIAN KENNY: The idea of Uber seems so simple, but it was revolutionary in so many ways. And Uber has been in the headlines many times for both good and bad reasons in its decade of existence. So we’re going to touch on a lot of those things today. So thanks for sharing the case with us.

ALEX MACKAY: Brian, I’m very happy to. It’s a little funny, we’ve actually started to see the first few students who have never hailed a traditional taxi in our classrooms. So I think increasingly, the contrast between the two is going to be pretty difficult for people to fully understand.

BRIAN KENNY: Let me ask you to start by telling us what your cold call would be when you set up the class here.

ALEX MACKAY: The case starts off with the current legal battle going on in London. And so the first question I just ask to start the classroom is: What’s the end game for Uber in London? What do they look like 10 years from now? In the midst of this ongoing legal battle, there has been back and forth, some give and take from both sides, Transportation for London, and also on the Uber side as well. And there’s actually a recent court case that has allowed Uber to have a little more time to operate. They bought about 18 more months of time, but this has been also brought with additional, stricter scrutiny, and 18 months from now, they’re going to be at it again trying to figure out exactly what rules Uber’s allowed to operate under.

BRIAN KENNY: It seems like 18 months in the lifetime of Uber is like a decade. Everything seems to happen so quickly for this company. That’s a long period of time. What made you decide to write this case? How does it relate to the work that you’re doing in your research?

ALEX MACKAY: A big focus of my research is on competition policy, particularly the realms of antitrust and regulation. And here we have a company, Uber, whose relationship with regulation has been really essential to its strategy from day one. And I think appreciating the effects of regulation and how its impact Uber’s performance in different markets, is really critical for understanding strategy and global strategy broadly.

BRIAN KENNY:  Let’s just talk a little bit about Uber. I think people are familiar with it, but they may not be familiar with just how large they are in this space. And the space that they’ve sort of created has also blown up and expanded in many ways. So how big is Uber? Like what’s the landscape of ridesharing look like and where does Uber sit in that landscape?

ALEX MACKAY: Uber globally is the biggest ridesharing company. In 2018, they had over $10 billion in revenue for both ridesharing and their Uber Eats platform. And you mentioned in the introduction, that they had over 6 billion rides in 2019. That’s greater than 15 million rides every day that’s happening on their platform. So really, just an enormous company.

BRIAN KENNY: So they started back in 2010. It’s been kind of an amazing decade of growth for them. How do you explain that kind of rapid expansion?

ALEX MACKAY: They were financed early on with some angel investors. I think Kalanick’s background really helped there to get some early funding. But one of the critical things that allowed them to expand early into many markets that helped their growth was they’re a relatively asset light company. On the ground, they certainly need sales teams, they need translation work to move into different markets, but because the main asset they were providing in these different markets was software, and drivers were bringing their own cars and riders were bringing their own phones, the key pieces of hardware that you need to operate this market, they really didn’t have to invest a ton of capital. In fact, when they launched in Paris, they launched as sort of a prototype, just to show, “Hey, we can do this in Paris without too much difficulty,” as their first international market. So being able to really scale it across different markets really allowed them to grow. I think by 2015, their market cap was $60 billion, five years after founding, which is just an incredible rate of growth.

BRIAN KENNY: So they’re the biggest car service in the world, but they don’t own any cars. Like what business are they really in, I guess is the question?

ALEX MACKAY: They’re certainly in the business of matching riders to drivers. They’ve been able to do this in a way that doesn’t require them to own cars, just through the use of technology. And so what they’re doing, and this is I think pretty well understood, is that they’re using existing capital, people who have cars that may be going unused, personal cars, and Uber is able to use that and deploy that to give riding services to different customers. Whereas in the traditional taxi model, you could have taxis that you didn’t necessarily own, but you leased them or you rented them, but they had the express purpose of being driven for taxi services. And so it wasn’t using idle capital. You kind of had to create additional capital in order to provide the services.

BRIAN KENNY: So you mentioned Travis Kalanick a little bit earlier, but he was one of the co-founders of the company, and the case goes a little bit into his philosophy of what expansion into new markets should look like. Can you talk a little bit about that?

ALEX MACKAY: Certainly. Yeah. And I think it might even be helpful to talk a bit about his background, which I think provides a little more context before Uber. He dropped out of UCLA to work on his first company, Scour, and that was a peer-to-peer file sharing service, a lot like Napster, and actually predated Napster. And where he was operating was sort of an evolving legal gray area. Eventually, Scour got sued for $250 billion by a collection of entertainment companies and had to file for bankruptcy.

BRIAN KENNY: Wow.

ALEX MACKAY: He followed that up with his next venture, Red Swoosh, and that was software aimed at allowing users to share network bandwidth. So again, it was a little bit ahead of its time, making use of recent advances in technology. Early on though, they got in trouble with the IRS. They weren’t withholding taxes, and there were some other issues with his co-founder, and there was sort of a bad breakup between the two. Despite this, he persevered and ended up selling the company for $23 million in 2007. And after that, his next big thing was Uber. So one thing I just want to point out is that at all three of these companies, he was looking to do something that leveraged new technology to change the world. And by nature, sometimes businesses like that operate in a legal gray area and you have very difficult decisions to make. Some other decisions you have to make are clearly unethical and there’s really no reason to make some of those decisions, like with the taxes and with some other things that came out later on at Uber, but certainly one of the things that any founder who’s looking to change the world with a big new technology company has to deal with, is that often, the legal framework and the regulatory framework around what you’re trying to do isn’t well established.

BRIAN KENNY: Obviously drama seems to follow Travis where he goes. And his expansion strategy was pretty aggressive. It was almost like a warlike mentality in terms of going into a new market. And you could sort of sum it up as saying ask forgiveness. Is that fair?

ALEX MACKAY: Yeah. Yeah. Ask for forgiveness, not permission. I think they were really focused on winning. I think that was sort of their ultimate goal. We describe in the case there’s this policy of principle confrontation, to ignore existing regulations until you receive pushback. And then when you do receive pushback, either from local regulators or existing sort of taxicab drivers, mobilize a response to sort of confront that. During their beta launch in 2010, they received a cease-and-desist letter from the city of San Francisco. And they essentially just ignored this letter. They rebranded, they used to be UberCab, and they just took “Cab” out of their name, so now they’re Uber. And you can see their perspective in their press release in response to this. They say, “UberCab is a first to market cutting edge transportation technology, and it must be recognized that the regulations from both city and state regulatory bodies have not been written with these innovations in mind. As such, we are happy to help educate the regulatory bodies on this new generation of technology and work closely with both agencies to ensure compliance.”

BRIAN KENNY: It’s a little arrogant.

ALEX MACKAY: Yeah, so you can see right there, they’re saying, what we’re operating in is sort of this new technology-based realm and the regulators don’t really understand what’s going on. And so instead of complying with the existing regulations, we’re going to try to push regulations to fit what we’re trying to do.

BRIAN KENNY: The case is pretty epic in terms of it sort of cuts a sweeping arc across the world, looking at the challenges that they faced with each market they entered, and none more interesting I think the New York City, which is obviously an enormous market. Can you talk a little bit about some of the challenges they faced going into New York with the cab industry being as prevalent as it was and is?

ALEX MACKAY: Yeah, absolutely. I mean, I think it’s pretty well known for people who are familiar with New York that there were restrictions on the number of medallions which allowed taxis to operate. So there was a limited number of taxis that could drive around New York City. This restriction had really driven up the value of these medallions to the taxi owners. And if you had the experience of taking taxis in New York City prior to the advent of Uber, what you’d find is that there were some areas where the service was very, very good. Downtown, Midtown Manhattan, you could almost always find a taxi, but there are other parts of the city where it was very difficult at times to find a cab. And when you got in a cab, you weren’t sure that you were always going to be given a fair ride. And so Uber coming in and providing this technology that allowed you to pick up a ride from anywhere and sort of track the route as you’re going on really disrupted this market. Consumers love them. They had a thousand apps signups before they even launched. Kalanick mentioned this in terms of their launch strategy, we have to go here because the consumers really want us here. But immediately, they started getting pushback from the taxicab owners who were threatened by this new mode of transportation. They argued that they should be under the same regulations that the taxis were. And there were a lot of local government officials that were sort of mobilized against Uber as well. De Blasio, the Mayor of New York, wrote opinion articles against Uber, claiming that they were contributing to congestion. There was a lot of concern that maybe they had some safety issues, and the taxi drivers and the owners brought a lawsuit against Uber for evading these regulations. And then later on, and this was the case in many local governments, de Blasio introduced a bill to put additional restrictions on Uber that would make them look a lot more like a traditional taxi operating model, with limited number of licenses and strict requirements for reporting.

BRIAN KENNY: And this is the same scenario that’s going to play out almost with every city that they go into because there is such an established infrastructure for the taxi industry in those places. They have lobbyists. They’re tied into the political networks. In some instances, it was revealed that they’ve been connected with organized crime. So not for the faint of heart, right, trying to expand into some of the biggest cities in the United States.

ALEX MACKAY: Absolutely. Absolutely. And what’s sort of fascinating about the United States is it’s actually a place where a company can engage in this battle over regulation on the ground. And de Blasio writes his opinion article and pushes forward this bill. Uber responds by taking out an ad campaign, over $3 million, opposing these regulations and calling out de Blasio. So again, we sort of have this fascinating example of Uber mobilizing their own lobbyists, their lawyers, but also public advertising to sort of convince the residents of New York City that de Blasio and the regulators that are trying to come down on them are in the wrong.

BRIAN KENNY: Yeah. And at the end of the day, it’s consumers that they’re really making this appeal to, because I guess my question is, are these regulations stifling innovation? And if they are, who pays the ultimate price for that, Uber or the consumer?

ALEX MACKAY: Consumers definitely loved Uber. And I don’t think any of the regulators were trying to stifle innovation. I don’t think they would say that. I think their biggest concern, their primary concern was safety, and a secondary and related concern here was losing regulatory oversight over the transportation sector. So this is a public service that had been fairly tightly regulated for a long time, and there was some concern that what happens when this just becomes almost a free market sector. At the same time, these regulators have the lobbyists from the taxicab industry and other interested parties in their ear trying to convince them that Uber really is like a taxi company and should be regulated, and really emphasizing the safety concerns and other concerns to try to get stricter regulations put on Uber. And part of that may be valid. I think you certainly should be concerned about safety and there are real concerns there, but part of it is simply the strategic game that rivals are going to play between each other. And the taxicab industry sees Uber as a threat. It’s in their best interest to lobby the regulators to come down on Uber.

BRIAN KENNY: And what’s amazing to me is that while all this is playing out, they’re not turning their tails and running. They’re continuing to push forward and expand into other parts of the world. So can you talk a little bit about what it was like trying to go into countries in Latin America, countries in Asia, where the regulations and the regulatory infrastructure is quite different than it is in the US?

ALEX MACKAY: In the case, we have anecdotes, vignettes, one for each continent. And their experience in each continent was actually pretty different. Even within a continent, you’re going to have very different regulatory frameworks for each country. So we sort of pick a few and focus on a few, just to highlight how the experience is very different in different countries. And one thing that’s sort of interesting, in Latin America, we focus on Bogota in Colombia, and what’s sort of interesting there is they launched secretly and they were pretty early on considered to be illegal, but they continue to operate despite the official policy of being illegal in Colombia. And they were able to do that in a way that you may not be able to do it so easily in the United States, just because of the different layers of enforcement and policy considerations that are present in Colombia and not necessarily in the United States. Now, when I talk about the current state of Uber in different countries, this is continually evolving. So they temporarily suspended their operations early in 2020 in Columbia. Now they’re back. This is a continual back and forth game that they’re playing with the regulators in different markets.

BRIAN KENNY: And in a place like Colombia, are they not worried about violence and the potential for violence against their drivers?

ALEX MACKAY: Absolutely. So this is true sort of around the world. I think in certain countries, violence becomes a little bit more of a concern. And what they found in Colombia is they did have more incidents where taxi drivers decided to take things into their own hands and threaten Uber drivers and Uber riders, sometimes with weapons. Another decision Uber had to make that was related to that was whether or not to allow riders to pay in cash. Because in the United States, they’d exclusively used credit cards, but in Latin America and some other countries like India, consumers tended to prefer to use cash to pay, and allowing that sort of opened up this additional risk that Uber didn’t really have a great system in place to protect them from. Because when you go to cash, you’re not able to track every rider quite as easily, and there’s just a bigger chance for fraud or for robbery and that sort of thing popping up.

BRIAN KENNY: Going into Asia was also quite a challenge for them. Can you talk a little bit about some of the challenges they faced, particularly in China?

ALEX MACKAY: They had very different experiences in each country in Asia. China was a unique case that is very fascinating, because when Uber launched there, there were already existing technology-based, you might call them, rideshare companies, that were fairly prominent, Didi and Kuaidi, And these companies later merged to be one company, DiDi, which is huge. It’s on par with Uber in terms of its global presence as a ridesharing company. When Uber launched there, they didn’t fully anticipate all the changes they would have to make to going into a very different environment. In China, besides having established competitors, Google Maps didn’t work, and they sort of relied on that mapping software to do their location services. So they had to completely redo their location services. They also, again, relied on credit cards for payments, and in China, consumers increasingly used apps to do their payments. And this became a little bit of a challenge because the main app that Chinese customers used, they used WeChat and Alipay primarily, they were actually owned by parent companies of the rival ridesharing company. So Uber had to essentially negotiate with its rivals in order to have consumers pay for their ridesharing services. And so here are a few sort of localization issues that you could argue Uber didn’t fully anticipate when they launched. The other thing about competing in China that’s sort of interesting is that Chinese policy regarding competition is very different from policy in the United States and much of Europe. For the most part, there’s not the traditional antitrust view of protecting the consumers first and foremost. That certainly comes into play, but the Chinese government has other objectives, including promoting domestic firms. And so if you think about launching into a company where there’s a large established domestic rival that certainly increases the difficulty of success, because when push comes to shove, the government is likely to come down on the side of your rival, which is the domestic company, and not the foreign entrant.

BRIAN KENNY: Yeah, which is understandable, I guess, to some extent. This sounds exhausting, to be sort of fighting skirmishes on all these fronts in all these different places in the world. How does that affect the morale or tear at the fabric maybe of the culture at a company like Uber, where they’re trying to manage this on a global scale and running into challenges every step of the way?

ALEX MACKAY: It certainly has an effect. I think Uber did a very good job at recruiting teams of people who really wanted to win. And so, if that’s the consistent message you’re sending to your teams, then these challenges may be actually considered somewhat exciting. And so I think by bringing in that sort of person, I think they actually fueled this desire to win in these markets and really kept the momentum going. One of the downsides of this of course is that if you exclusively focus on winning and getting around the existing regulations, there does become this challenge of what’s ethical and what’s not ethical? And in certain business areas, there actually often is a little bit of a gray line. I mean, you can see this outside of ridesharing. It’s a much broader thing to think about, but regulation of pharmaceuticals, regulation of use of new technologies such as drones, often the technology outpaces the regulation by a little bit and there’s this lag in trying to figure out what actually is the right thing to do. I think it’s a fair question whether or not you can disentangle this sort of principle of confrontation that’s so pervasive throughout the company culture when it comes to regulation from this principle confrontation of other ethical issues that are not necessarily business driven, and whether or not it’s easy to maintain that separation. And I think that’s a fair question, certainly worthy for debate. But what I think is important is you can set up a company where you are abiding by ethical issues that are very clear, but you’re still going to face challenges on the legal side when you’re developing a new business in an area with new technology.

BRIAN KENNY: That’s a great insight. I mean, I found myself asking myself as I got through the case, I can’t tell if Uber is the victim or the aggressor in all of this. And I guess the answer is they’re a little bit of both.

ALEX MACKAY: Yeah. I think it’s fair to characterize them as an aggressor, and I think you sort of need to be if you want to succeed and if you want to change the world in a new technology area. In some sense, they’re a victim in that we’re all the victim as consumers and as firms of regulations that are sometimes difficult to adapt in real time to changing market conditions. And there’s a good reason why they are sticky over time, but sometimes that can be very costly. Going back to something we talked about earlier, I think there are hardly any consumers that wanted Uber kicked out of New York City. I think everyone realized this was just so much superior to any other option they had, that they were really willing to fight to keep Uber around in the limited ways they could.

BRIAN KENNY: So let’s go back to the central issue in the case then, which is, how important is it to them, in terms of their global strategy, to have a presence in a place like London? They’re still not profitable by the way, we should point that out, that despite the fact that they are the largest in the space, they haven’t turned the corner to profitability yet. I would imagine London’s kind of important.

ALEX MACKAY: Absolutely. London is a key international city, and a presence there is important for Uber’s overall brand. So many people travel through London, and it’s a real benefit for anyone who travels to be able to use the same service at any city you stop in. At the same time, they’re facing these increasing regulatory pressures from London, and so it’s a real question whether or not, 10 years from now, they look substantially different from the established taxi industry that’s there. And you can kind of see this battle playing out across different markets. As another example, in Ghana. When they entered there, they actually entered with a framework for understanding. They helped build the regulations for ridesharing services in Ghana when they entered. But over time, that evolved to additional restrictions as the existing taxi companies pushed back on them. So I think a key lesson here in all of this is that the regulations that you see at any given point in time aren’t absolutely fixed, for anyone starting a technology-based company, there will be regulations that do get created that affect your business. Stepping outside of transportation, we can see that going on now with the big tech firms and sort of the antitrust investigations they’re are under. And the policymakers in the US and Europe are really trying to evolve the set of regulations to reflect the different businesses that Apple, Facebook, Microsoft, Google are involved in.

BRIAN KENNY: One thing we haven’t touched on, and it’s not touched on in the case obviously because it just sort of started fairly recently, is the pandemic and the implications of the pandemic for the rideshare industry as fewer people find themselves in need of going anywhere. Have you given any thought to that and whether that’s going to have any effect on the regulations?

ALEX MACKAY: It certainly could. Uber is in a somewhat fortunate position, at least if you judge by their market capitalization, with respect to the pandemic. Initially their stocks took a pretty big hit, but rebounded pretty quickly, and part of this is because the primary part of their business is the transportation through Uber X, but they do also offer the delivery services through Uber Eats, and that business has really picked up during this pandemic. There’s certainly a mix of views about the future, but I think most people do believe that at some point we’ll get back to business as usual, at least for Uber services, when we come up with a vaccine. I think most people anticipate that they’ll be resuming use of Uber once it becomes safe to do so. And I think, to be frank, a lot of people already have resumed using Uber, especially people who don’t have cars or who see it as a valuable alternative or a safer alternative to public transit.

BRIAN KENNY: Yeah, that’s a really good point. And the Uber Eats thing is interesting as another example of how it’s important for businesses to re-imagine the business that they’re in because that, in many ways, may be helping them through a really tough patch here. This has been a really interesting conversation, Alex, I want to ask you one final question, which is, as the students are packing up to leave class, what’s the one thing you want them to take away from the case?

ALEX MACKAY: So I would hope the students take away the importance of regulation in business strategy. And I think the case of Uber really highlights that. And if you look at the conversation around Uber I’d say for the first 10 years of their existence, it was essentially around the superiority of their technology and not so much how they handled regulation. If you think back to the cease-and-desist letter that San Francisco issued in 2010, if Uber had simply stopped operations then, we wouldn’t have the ridesharing world that we have today. So their strategy of principle confrontation with respect to regulation was really essential for their future growth. Again, this does raise important ethical considerations as you’re operating in a legal gray area, but it’s certainly an essential part of strategy.

BRIAN KENNY: Alex, thanks so much for joining us on Cold Call today. It’s been great talking to you.

ALEX MACKAY: Thank you so much, Brian.

BRIAN KENNY: If you enjoy Cold Call, you might like other podcasts on the HBR Presents Network. Whether you’re looking for advice on navigating your career, you want the latest thinking in business and management, or you just want to hear what’s on the minds of Harvard Business School professors, the HBR Presents Network has a podcast for you. Find them on Apple podcasts or wherever you listen. I’m your host, Brian Kenny, and you’ve been listening to Cold Call , an official podcast of Harvard Business School on the HBR Presents Network.

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The Quest for Legitimacy in Digital Disruption: The Case of Uber (A)

By: Gigi Teo, Siew-Kien Sia

As the poster child of the sharing economy, Uber has disrupted the heavily protected taxi industry with an app that connects a distributed network of passengers and drivers at a simple click of a…

  • Length: 22 page(s)
  • Publication Date: May 22, 2017
  • Discipline: Information Technology
  • Product #: NTU111-PDF-ENG

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As the poster child of the sharing economy, Uber has disrupted the heavily protected taxi industry with an app that connects a distributed network of passengers and drivers at a simple click of a button. While its asset-light ridesharing business model is highly innovative and has been excitedly embraced by investors, the extent of its success is diminished by unhappy customers, irate taxi drivers, and frustrated regulators. This case explores key challenges Uber faces in its quest for legitimacy as a sharing economy disruptor, and the strategies it adopts to deal with these challenges.

Learning Objectives

(1) Challenges faced by tech startup entrepreneurs. In cases of disruptive innovations, some of them need to become institutional entrepreneurs to proactively influence the more deep-rooted field-level processes of regulative legitimacy, normative legitimacy, and cultural-cognitive legitimacy. Students should be guided to discuss the differences between the two types of entrepreneurs; (2) Innovation in business models, specifically in a two-sided online marketplace for services and to identify critical success factors of such online marketplaces.

May 22, 2017

Discipline:

Information Technology

Geographies:

United States

Industries:

Transportation and distribution

ABCC at Nanyang Tech University

NTU111-PDF-ENG

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Uber has three main pricing structures-1. Fixed airport rates-For example, the fixed airport fee from downtown Chicago to Midway is $65 and $75 to O'Hare, slightly less than two times that of cabs.

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Sharing economy is an economic model in which individuals, corporations, non-profits, and governments collaborate to optimize resources through the redistribution, sharing and reuse of excess capacity in goods and services. It involves ideals of decentralization, sustainability, community-level connectedness, and opposition to hierarchical and rigid regulatory regimes (Shor et al., 2015). Launched in 2009, based on its own version of sharing economy, Uber built and operates a rideshare service seeking to transform and disrupt the taxi industry. The service connects people that need a trip to drivers who use their own cars to provide the service, that is, drivers can offer to “share” their cars with a guest, for a price. Although the taxi industry, and the transit and mobility regulation in general, have long been subject to city-level consumer protection, sharing economy advocates, Uber in particular, claim that these rules are rendered obsolete by the Internet. Indeed, governments have been largely unable to stop Uber’s operations in their jurisdictions precisely because they are conducted primarily over the Internet. Uber has attracted a mixed reaction on the Left, at once intrigued by its possibilities as a new form of social organization but critical of its amplification of precarious labour. Uber is particularly debated in accelerationist theory historically concerned with a radical political response to capitalism that accelerates and exacerbates its uprooting, alienating, abstractive tendencies (Mackey & Avanessian, 2014). This theory has two distinct intellectual directions (Galloway & Noys, 2014): one more to the Left, seeking in the cognitive techno-science labour an alternative to overcome capitalism; the other is dominated by free-market libertarians, aiming to use technology and science to overcome the State, disrupt regulations, and strengthening of neoliberal economic​ relations. Accelerationists defend that instead of destroying neoliberalism, we should reappropriate platforms like Uber toward common ends (Williams & Srnicek, 2013). The paper argues that Uber cannot be reconciled with a Left politics because Uber’s free-market libertarian practices seek to transforms processes but leave structures intact. The outcomes are not disruptive, but well-known consequences of neoliberalism: (1) constrains the productive forces of technology by doing relentless iterations of the same basic service to reduce costs, (2) absorption and corruption of immaterial cultural ideals, such as “sharing,” into profitable business models attractive to large enterprises, (3) precariousness of workforce due to the lack of employee benefits and protections, and (4) a strong discourse for deregulation of economy to avoid liability, privatize and centralize decisions, and enhance profits. Understand Uber’s discourse and practice are important because its magnitude (located in 67 countries and more than 350 cities), its aggressive economic model, and its problematic relation to local governments and the taxi industry.

Sociology-the Journal of The British Sociological Association

Nicholas Gane

... in society and his concern for liberty in an increasingly bureaucratised age' (Beetham ... This is an important undertaking, for, as Stefan Breuer notes (chapter 1), Weber's political sociology has been commonly associated with the process of bureaucratisation but rarely ...

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Tanja Kajtna

Our paper focuses on differences in sensation seeking between male and female athletes who engage in high risk sports. There are several studies (Cox, 1994; Tusak & Tusak, 2001; Erjavec, 2002), which indicate that male and female athletes are more similar than males and females in the general population, female athletes thus show more "traditionally male" characteristics. These studies mainly focus on personality, anxiety and aggression; we wanted to address these issues in the area of sensation seeking. Sensation seeking has been well researched in the area of high risk sports - males seem to have higher sensation seeking needs, but gender diff erences in high risk sports have been quite poorly investigated. Of 33 mountain climbers who participated in our research, 15 of them were male and 18 female and diff erences in age were not signifi cant. We used Zuckerman's Sensation seeking scale IV, which examines sensation seeking in terms of 5 factors - a general factor, f...

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Uber CRM Case Study: The Taxi Gaint

  • Category : Case Studies
  • Last updated on June 11, 2023
  • By Viktor. A
  • No Comments

Uber CRM Case Study

Uber was born from the question,  “What if you could request a ride from your phone?”

This question was from Travis Kalanick and Garrett Camp when they could not get a cab in Paris in 2008. Uber primarily focuses on perfecting the imperfect to meet customers’ needs.

Uber re-imagined the taxicab experience, making it more convenient, predictable, affordable, and fun. Its global ride-sharing app disrupted modern transportation as we know it, at one point making Uber the most valuable startup company in the world.

Uber has implemented different CRM strategies to strengthen their customer relationships. They don’t joke about the needs of their customers. They partnered with other businesses to execute a complex idea to satisfy their customers.  This is the powerful secret that fueled their popularity.

You’ve got to have a little hustle in you. I think that’s where the world is going. People will not own cars; they’ll have a service that takes them where they want to go, when they want to go there. And that’s what Uber is. – Travis Kalanick

In this Uber’s CRM case study article, we’ll discuss how Uber’s CRM strategies contributed to the company’s growth.

History of Uber, Timeline & Facts

2008: On a cold winter evening in Paris, Travis Kalanick and Garrett Camp couldn’t get a ride. That’s when the idea of Uber was born.

2009: Its global ride-sharing app was launched.

2010: The company received its first significant funding, a $1.3 million round led by First Round Capital.

2012: The company broadened its offerings by launching UberX, which provided a less expensive hybrid car as an alternative to the black car service.

2013: The perfect partnership with animal shelters across the US, we launched UberKITTENS. Riders requested 15 minutes of snuggle time with a furry friend, and all proceeds benefited local shelters.

2014: Spreading goodwill with #UberSpringCleaning, riders requested on-demand donation pickups and gave more than 5,000 pounds of clothes to Goodwill.

2015: Expanding opportunities for deaf and hard-of-hearing driver

2016: Uber then raised a further $3.5 billion from Saudi Arabia’s sovereign wealth fund. Also the self-driving pilot program was launched in Pittsburgh. Now local riders could get a self-driving vehicle when they request their next trip.

2017: $1 million for Meals on Wheels to help deliver even more meals to seniors, we provided free rides to the volunteers who bring food and friendship, and we also donated directly to the Meals on Wheels America organization.

2018: 10 billion trips and counting in more than 21 countries across five continents, 173 trips and deliveries started simultaneously. And the journey to our subsequent 10 billion visits began.

2022: Uber launched UberX share, which allows multiple customers to share a ride, saving them up to 20% on the standard fare.

2023: Khosrowshahi remains the CEO of Uber.

uber crm case study

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Uber CRM Case Study: 4 Strategies Feuling Their Growth

Uber focuses more on their customers needs, and they use the following CRM strategies to satisfy them.

1. Partnerships

Uber has implemented several partnerships to entice both first-time and loyal customers to take a ride. They partnered with Starwood, Capital One, etc.

a) Uber and Starwood

Starwood is one of the world’s largest hotel companies. Uber is partnering with Starwood to broaden its app use and reach globally. Through the partnership, Starwood’s guest loyalty program members can link their accounts with Uber accounts and earn Starwood credits whenever they take an Uber ride.

Uber passengers earn one Starwood rewards point for each dollar they spend on a ride in a car. Free hotel nights start at 3,000 points for the lowest tier of hotels and can be as high as 35,000 points a night for high-end properties.

b) Uber and Capital One

Uber is teaming up with Capital One to offer Capital One SavorOne Cash Rewards Credit Card and Capital One Savor Cash Rewards Credit Card cardholders the following rewards;

  • 10% cashback on Uber rides and Uber Eats purchases.
  • Cardholders will receive a free Uber One membership for $9.99 a month.

The partnership will make the Uber experience better for riders, said Jonathan DiOrio, head of travel partnerships.

2. Introducing Uber Eats

Uber Eats is an online food ordering and delivery platform launched by Uber in 2014. It is an app for mobile devices that allows users to look through restaurant menus, pick out the food items they’d like, and have it delivered right to their door.

Once you place an order on Uber Eats, the restaurant will confirm your order and begin preparing it. An UberEats delivery driver will be matched to your order, and you’ll be able to track your order’s progress the whole time.

Once the driver has picked up your order, you can track the car on a map and estimate how soon the driver will arrive at your location with your food.

uber eats

UberEats CRM strategy;

  • Make it easy for their customer to pick up a meal without leaving the house.
  • It enables customers to discover new restaurants around them so they can always try something new.
  • Enables Uber customers to compare meal prices from different restaurants before ordering.

3. Customer loyalty

Uber has a loyalty program called “Uber VIP” for a selected group of users with specific American Express credit cards. These valued customers enjoy the following benefits;

  • They are invited after taking a high number of rides in certain cities.
  • Uber VIP members are matched only with the highest-rated drivers. This means that they will be compared with drivers with a rating of 4.8 stars or above and can feel assured that their ride will go smoothly and safely.
  • Finally, Uber VIP users are the first to hear about exclusion promotions, deals, and discounts that Uber has to offer.
  • An Uber VIP trip will cost the same amount as a regular one. That said, Uber VIP members are matched with better drivers and better vehicles without paying a higher price.

4. Referral program

Uber’s innovative referral program is the secret behind its rapid adoption. Riders and drivers can refer the app to their friends using their referral code. Once their friends join the app using the code, their friends get free or discounted rides while the drivers earn Uber credit.

What makes Uber so successful?

Since its inception, Uber has dominated the industry because it perfected a solution to meet customers’ needs. They re-imagined the taxicab experience, making it more convenient, predictable, affordable, and fun. They did this because they knew that an incomplete solution was an invitation to competitors.

Uber values their customers a lot. They also partnered with other businesses to meet their customers’ needs. This is the main secret behind Uber’s exponential growth and huge market share . They work with other companies to handle any technology that is difficult for them to take.

What CRM does Uber use?

Uber depends heavily on Salesforce CRM technology for its growth. Salesforce helps extract data from its customers’ engagement with its brand on social media; then, Uber can track and respond to customers’ concerns swiftly.

Uber uses CRM software to tailor offers, recommendations, and customer promotions based on past orders. Uber asks its customers to register for an account to ensure consistent contact with their customers.

It also makes it easy for customers to reorder so that customers can pay with a click and get a better Uber experience.

Conclusion :

To build a scalable business, it’s best to emulate the strategies used by top business owners. Customer relationship management is the primary factor considered by significant companies and Uber is not excluded. They use SalesForce CRM software to streamline their business processes.

SalesForce CRM enables Uber to tap into its customers’ behaviors and riding habits. From the customer’s side, they get a superior, more tailored service – and will be more likely to use Uber again.

Viktor. A

Viktor. A is a writer and researcher with experience writing about various topics, including CRM software, SaaS, finance, and technology. When he's not writing, he's swimming and travelling

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uber case study pdf

A Comprehensive Uber Eats Case Study- 2023

Nowadays, when we are hungry, do we always cook?

Not always, right?

Instead of thinking about what to cook, most of us search for our mobile phones.

Just take our mobile and order our favorite food from our favorite restaurants.

The answer is through food delivery apps.

uber case study pdf

In this Uber Eats case study, we will discuss one food delivery app that has gained popularity since its invention. It is none other than “Uber Eats.”

We will learn about the Uber Eats case study, digital marketing strategy, and Uber Eats competitor analysis.

There was a time when eating outside was a sort of social gathering. While it is still the same for many, eating out has become more of a necessity.

It could range from a cup of relaxing tea to a craving for a sweet. Now that necessity is delivered to one’s doorstep.

Although people nowadays depend a lot on food delivery apps. How did the idea of ordering food originate?

This article summarizes how online food ordering existed, the major players in this field, and the Uber Eats case study and marketing strategy.  

How did the Food Delivery Idea Emerge?

Uber Eats case study reveals that this service began during World War II.

Then, people did not have a kitchen or home appliances, so they did not have other cooking options.

Food delivery services started spreading to the United States and Philadelphia from the UK.

They supplied food to the needy and those who were at home.

Also, the government ensured that each house was filled with food so nobody stayed hungry. This method spread fast to other parts of the country, including New York and Columbus.

When its benefit began spreading to other parts of the world, others also jumped into this field. Then, in 1952, Australia started its first food delivery service.

Modern Food Delivery System

By then, restaurants had introduced toll-free numbers so customers could call to order food without charges.  With time, the idea of a food ordering system was appreciated by many.

This way, customers could contact the restaurants and enjoy their favorite food delivered to their homes. It led to the invention of online food ordering and delivery services.

Today, there is hardly any country where we will not find a food ordering and delivery service. Moreover, as more and more restaurants join the race, the online food ordering market expands.

As a result, online food ordering and delivery systems have started gaining fame over the previous years.

Digital Age Driving the Growth of Online Food Ordering Services

Online food ordering and delivery popularity is a significant aspect of the digital age culture. We could find Millennials considering online food ordering quite common in recent times. Due to the increase in online customers, the Uber Eats market has grown.

uber case study pdf

However, most traditional businesses have embraced these trends and moved online despite the growing demand.

With the advent of modern technologies, the food industry gained several new investors regularly.

The online food delivery service is booming with popular apps like Uber Eats and other meal delivery services. Forbes predicted that this industry will have annual sales of around $365 billion worldwide by 2030.

The online food delivery industry has grown immensely over the past five years.

Headed by platform-to-consumer services, such as DoorDash and Uber Eats, online food delivery service has expanded, including takeaways, thus, increasing the potential revenue.

The past few years have also witnessed more partnerships as large businesses attempt to reduce competition in the market.

COVID-19 has driven the industry a few years into the future, as many of us ordered food online for the first time during the lockdown.

Uber Eats case study proves that Uber Eats reported a massive increase in orders between February and March when the entire world was in lockdown.

This case study will examine Uber eats analysis and the Uber Eats Marketing strategy that helped them gain popularity and increase revenue.

What is SWOT Analysis?

SWOT analysis is a strategic planning and management method to help organizations identify strengths, weaknesses, opportunities, and threats.

It evaluates an organization’s competitive position, external and internal factors, and existing and future potential.  

Uber Eats Case Study

Uber Eats is an online food ordering service by Uber Technologies. It operates in over 6,000 cities across 45 nations and is expanding its business fast.

Customers use a separate smartphone app, Uber Eats, to order food online. It allows customers to order food from a selected range of restaurants. The collected food is delivered to customers by Uber drivers.

With Uber’s Fast Delivery, customers can get their favorite food from their favorite restaurants within 10 minutes at their doorstep. Being a late participant in the online food delivery business, UberEats has its advantages.

It got the opportunity to learn from other prominent players in the market and redefine the competitive landscape.

This Uber Eats case study analyzes the major competitors, recent trends in customer behaviors, and Uber Eats marketing tactics execution.

The Uber Eats case study proves that one of the significant reasons behind Uber Eats success is its strong brand image and its unique values.

According to the Uber Eats case study, it has lower delivery rates and faster delivery than Grubhub, Postmates, and other online food delivery services.

uber case study pdf

However, ordering food from Uber Eats gave many a limited experience. Uber Eats case study shows that there were restricted food choices and restaurants. Moreover, no option for food customization makes customers feel unsatisfied with Uber Eats.  

The company focuses on customer reviews and keeps upgrading its service. For example, in 2016, Uber Eats launched two ways to order food.

First, customers could order from restaurants through the app or pre-fixed lunch options. Then, Uber would deliver the same in 10 minutes.

These new features made Uber Eats more convenient and satisfied many customers with different needs and preferences.

Uber Eats Case Study- Acquisition by Zomato

On 21 st January 2020, the only big news was that Zomato acquired Uber Eats. The deal has been in progress since 2019 and was finally concluded for $350 million. This deal was an all-stock transaction.

Zomato did not pay the monetary prize for this deal but offered an equal share in the company. Customers trying to order food from Uber Eats came across Zomato’s page.

A Uber Eats case study proves that the exit of Uber Eats from the food delivery industry has made the food delivery market a duopoly between Swiggy and Zomato.  

Uber Eats is the third most popular name in online food delivery. Swiggy was and is still a tremendous competitor. While Swiggy gets nearly 1.4 million orders daily, Zomato receives around 1.2 million orders, whereas Uber Eats gets only 4 lakh daily.

uber case study pdf

When this challenging competition was going on, the two startups, Zomato and Swiggy, saw a new competitor in the market. The e-commerce giant, Amazon, entered the food delivery market with new strategies and offerings.

SWOT Analysis of Uber Eats

  • Speedy delivery. Customers get their favorite food within 10 minutes at their doorstep.
  • Flexibility in food delivery.
  • A separate team of drivers handling Uber Eats deliveries avoids overlap with regular Uber cab drivers.
  • No hidden charges ensure transparency and consistency in price.
  • Restricted selection of restaurants.
  • To know the reviews of restaurants, customers need to log in to Yelp.
  • The items under the “Uber Instant Delivery” menu are prepared beforehand and kept in the driver’s vehicle. It is the reason why customers throw food many times.

Opportunity

  • Uber Eats is available in over 6,000 cities across 45 countries and is expanding.
  • Being a late entry in the online food delivery industry, Uber eats got the chance to learn from other major players’ mistakes.
  • Give customers the option to place orders in advance. It will help them in assessing the demand for food from each restaurant.
  • Offer customers the flexibility to get their food delivered at their available time.
  • Uber Eats is a new name in the online food delivery industry.
  • Other major food delivery apps like Postmates partner with Chiptole, Starbucks, and other famous companies.

Top 5 Competitors of Uber Eats

Revenue of Uber Eats

uber case study pdf

Uber Eats is a name that has become synonymous with distraction, challenging norms, and changing rules in an industry that has been around for decades.

Though Uber Eats has had its share of challenges since its launch, its forward-thinking, flexible approach helped it become an industry leader.

This Uber Eats case study narrates the story of Uber Eats, including how it started, became the third most popular food delivery app, and became a common name in everyday life.

uber case study pdf

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