Uber Merger and Acquisition Strategy
Uber has been experiencing a huge competition from Didi Chuxing in the Chinese market. The tag of war between Uber Technologies Inc. and Didi Chuxing has led to Uber losing at least $2 billion in the Chinese market in the past two years. Uber is not only facing huge competition from other companies in China but also in other developing countries more so in Africa and Asia. The only market that Uber has made a consistent profit is the United States and Canadian market.
According to Wang (2016), the main reason Uber has faced a huge competition in China is because the Chinese market has complex political and cultural environment different from that of the United States. To handle the pressure of competition, Uber is on the verge of merging with Didi Chuxing in the Chinese market. Through merging with Didi Chuxing in China, Uber is now freed to focus on other markets and it is also looking forward to working closer with other competitors in other markets such as Grab in Southeast Asia, Ola in India and Lyft Inc. in the United States.
Uber has no cars at the moment. They hire drivers who already have cars and earn from commission percentages. Due to the huge competition in the market, Uber has not managed to beat its vision. It is beyond any reasonable doubt that Uber will not be able to compete effectively in the market if they cannot acquire their own cars. However, according to Travis Kalanick, CEO of Uber, there are a lot of expenses Uber will undergo to ensure that they acquire their cars. Kalanick, concludes that though it is necessary for Uber to have personal cars to remove the dependency barriers, the company is still under no pressure to do so.
Restructuring
Uber Technologies Inc. just like any other company has undertaken different restructuring strategies to ensure that they emerge the market leaders. The biggest and notable restructuring strategy that Uber has applied so far is to lay off some of the employees and hire others. For instance, Rachel Whetstone, who was the communication director at Google Inc. was hired by Uber as a means to restructure the communication panel of the company. According to Carson (2015), since Whetstone was hired at Uber, the company has witnessed different changes such as employees’ layoffs to make sure that the operations of the company are made better.
Apart from hiring better and highly qualified employees, Uber has also restructured the way they promote their services through advertising. Due to the huge competition Uber faces from Lyft in the American market, Uber has come up with different commercials that show how their services are superior to those of the rivaling company.
Additionally, Uber is coming up with a variety of services apart from the riding services they started off with in the initial stages. UberEAT is a food delivery service which Uber has launched as one way to restructure the services it provides. Instead of making a delivery using a car, an Uber employee can deliver fast food on the client’s doorstep using a bicycle.
Uber Downsizing strategy
As mentioned in the restructuring and merger acquisition strategy, Uber has applied some of the strategies which include employee layoffs. Due to the market complexity and huge competition, Uber has noted that it is not possible to manage their huge number of staff. Communication staff and drivers, for instance, has become one major area where Uber has downsized heavily. Apart from competition, other factors that have promoted Uber to downsize their staff are lawsuits that it has faced. In 2015, California Labor Commission made a ruling in favor of a San Francisco-based driver who claimed to be an Uber employee (Stanley, 2015). However, according to Uber, they have not recognized drivers as employees but as partners. The case made Uber rethink their employment strategy and define who their employees are. Due to the lawsuit, Uber downsized the number of its staff. The benefits Uber stands to gain from downsizing the number of drivers is that they will be able to provide all their staff with clients even during the off-peak periods. Additionally, Travis Kalanick, CEO of Uber, the move will make their services better as they will be able to monitor all their drivers.
Uber Cooperation Strategy
Uber does not have any cooperation strategy implemented at the moment. However, the company is rethinking its strategy and looking forward to bring together its employees together to form a union. Through unionization, Uber drivers will be able to have a common a price bargain and even if possible, forge forward their demands to be recognized as employees and not partners. Apart from the cooperation from the sides of the drivers, Uber thinks that it is time to eliminate empty seats in cabs. Therefore, Uber is looking forward to bringing together its clients into cooperation where they will be able to share a ride and the cost. Sharing the cost and ride will ensure that Uber becomes a socially responsible company through reducing the number of cabs on the roads. The clients will also be able to pay very little as compared to what the competitors are charging.
Currently Uber owns no car. They depend heavily on the percentage commission they earn from what their drivers have worked for. The challenge comes when drivers think that they are not fairly awarded and that at sometimes their clients rate them unfairly. To make the dreams of Uber come true, which is, to become the world leading company offering taxi services, Uber must come up with a cooperation strategy that will bring together all the stakeholders as a single family.
References
Carson, B. (2015). Uber hired a new director of communications from Google, and she's cleaning house. Retrieved from <<http://www.businessinsider.com/uber-lays-off-communications-people-2015-12>>
Newcomer, E, Wang, S. (2016). In Deal With Didi, Uber Frees Itself to Expand in Other Markets. Retrieved from <<http://www.bloomberg.com/news/articles/2016-08-01/uber-said-to-merge-china-business-with-didi-in-35-billion-deal>>
Stanley, J. (2015). California Ruling: Uber Driver Is an Employee. Retrieved from <<https://nextcity.org/daily/entry/uber-drivers-employees-contractors-california-labor-commission-ruling>>
