Free Uber Technologies Value Proposition Analysis Term Paper Example

For years, taxi drivers have been exploiting unsuspecting tourists and residents of cities in countries around the world. This has created an enormous demand for a reliable taxi service that was classier than a taxi but not as expensive as having one’s own personal chauffer. This demand was particularly prevalent in the United States where taxi drivers did not accept credit cards, drove in taxi designated zones within cities to raise the fares, and whose taxi drivers made customers uncomfortable due to their driving or manner towards clients. Taxi drivers were notorious in the United States for not offering change and for being rude to customers. The taxi drivers had made a killing from extorting customers and even had their own labor union to support their extortionist activities. This is precisely why the idea for Uber was born in San Francisco because with the implementation of smart phones with their applications to bring a door to door taxi service that was safe, reliable, and easy to pay for. Uber has since dominated the world while causing a series of controversial issues with taxi unions around the world.
What makes Uber’s value proposition so fascinating in the market is that they have given the customer what they want while going around the government. Additionally, they have given a lot of people a different way to make money than working a desk job, which has created another workforce in the United States that was struggling to find employment during the recession. What has been Uber’s saving grace against congressman and local government bans has been that their value to the customer has become a critical part of the culture and expectation of their consumers. For example, customers rely on them in major cities to get to their destinations during bad weather, if they have a formal function and need high heels or even if they need to transport a large box across town and have no car to do so. Uber has changed the nation of the transportation industry around the globe, which is no surprise that customers have fought the bans that the taxi drivers have imposed on their services because at the end of the day, the customers want Uber and not some stinky, classless taxi that overcharges them. This is the reality of this generation of consumers, which creates Uber’s value proposition for itself.
One key component of Uber’s value proposition to consumers is safety. The reason that this is so important to Uber is the reality of this generation of the American population that binge drinks on weekends. As sad as it is to say, Uber allows these individuals to enjoy their parties and get home without endangering themselves or someone else. This is essential because it fills a void in cities and suburbs of cities for keeping this younger generation of partiers safe. Uber creates value in their customers and many of their parents in order to keep the kids off the roads if they have consumed too much alcohol.
Pertaining to other aspects of Uber’s competitive advantage, Uber was the forerunner in the market; however, there has been another competitor in the mix recently within the United States called Lyft. Personally speaking, I prefer Lyft to Uber because Lyft is offering more discount options than Uber and it is essentially the same service. In fact, many Uber drivers also work for Lyft. What differentiates Lyft is that Lyft does not offer the Denali and Town Car options that Uber is known for. Thus, for the consumer who is not concerned with luxury and merely wants to get from point A to point B, Lyft is offering a service that is achieving the same end result for that bracket of consumer. Additionally, Uber’s employees have stated that Lyft is easier to work for and has a better payment schedule. Thus, this is highly recommended for Uber to not discount Lyft as a possible competitor for their market share. Uber has to understand that their model is not that difficult to have competitors try to “out drive” them. Thus, Uber has to be careful to keep their branding and efficiency up to date in order to maintain their client retention rates.
That being said, Uber has a powerful marketing campaign that brings about a great deal of customer acquisition. These two aspects greatly add to Uber’s competitive advantage. To start, Uber has a sensational marketing campaign because they have positioned themselves at every major corporate or consumer event that appeals to millennials, who are their primary consumers. This publicity and using social media is a great asset to Uber. Additionally, Uber has an amazing customer acquisition because of the versatility of their App that users can interact with. Once a customer is shown how effective Uber is, they are amazed and become loyal to Uber because their product simply blows taxis out of the water. Both of these factors greatly contribute to Uber’s competitive advantage as well.
Delving into Uber’s core activities let’s discuss what makes Uber, Uber Uber is known for several variables to include: car differentiation, drivers, fare calculator, digitalized application that accepts credit cards and has GPS. These factors make Uber customers not only rely on but also expect their services in their daily lives. This is why Uber keeps wining the battle against local governments in which the taxi drivers try to protest their services because customers want Uber and not taxis!
The other aspect of Uber that makes them quite well known in the industry is the fact that they have professional drivers that are classy and safe. Taxis have lost on this for years. Uber has a system in which you can track the route that the driver is going on their GPS. The customer can see where the driver is and how long it will take them to get there. Additionally, customers can verify where the driver is by calling them. Uber has a feedback provision in place so that the customer can see the driver’s ratings and what their car looks like. Furthermore, the customer can put the address in where they want to go so that the driver is aware. This interactive feature on the App causes customers a great deal of satisfaction to know that they are going to have a reliable driver who will not be ripping them off as they are going to their destination. This is one of the key factors that keeps customers loyal to Uber’s business model.
The other distinct option that Uber has and Lyft still does not is the fare calculator. One of the principal problems that consumers faced when they were taking taxis is that they would never have enough cash to pay cash and tip because they never knew how the taxi driver was going to run up the meter. Uber has completely eliminated this evil in the transportation industry, which customers simply adore. Additionally, customers can factor their desired tip into the transaction based on the driver’s performance after the ride. All in all, this eliminates the stress from customers that they will not have enough money to reach their destination, which caused a great deal of headaches in the transportation industry before.
Uber’s last core activity pertains to their embracing of the digital age. Smart phones such as the iPhone and Samsung Galaxy have made Uber. Uber would be nothing without these devices. What Uber did was design a service that thrived on technology that the younger generation was using. In fact, there business model was so good that baby boomers even joined in the fun because their business fulfilled a substantial need in the transportation market around the world.
Arguably, the most strategic job within Uber’s organizations are their soldiers in the field, aka. their drivers. Uber would be absolutely nothing without their IT team and their drivers. Their drivers are what facilitate Uber’s business. This is essential for Uber’s business growth development all over the world. Uber has been expanding to many new markets; however, until they are present in every single country, they are going to need more drivers. In terms of forecasting this job, the demand is continuous and the applicants (the supply) will be continuous. The reason for this is that this generation is tired of rotting away in a cubicle not moving up in their lives. This trend greatly impacts Uber’s potential workforce because Uber has created a medium for those who have a car to make money while pursuing their other passions with their own schedule. This is sensational because it allows the author to write and go to Bali for example instead of working in some desk miserably. Uber allows these employees to pay their dues while still allowing them to pursue their dreams. In fact, some people make more than $4,000 USD driving Uber per week according to my driver last week. This is some serious capital that exceeds what many fresh graduates make outside of college. This is quintessential since the recession in the United States in 2008 where many graduates had to take jobs they did not study for and did not love. Uber represents a hope for our generation to not settle for working in a useless job that they don’t love. Uber represents a trend of the global/remote office that is developing all over the world from freelancing writing to driving. These opportunities are helping create a new kind of workforce that is modern and incredible for this generation to truly pursue. This is precisely why Uber will have a continuous flow of supply and demand whether it is domestic or international. Their work force is ready to hit the gas petal and go!
Delving into the numeric calculations for forecasting, calculating Uber’s drivers strategically is best conducted with an Index/Trend Analysis. The reason for this is that this method gives a clear calculation based on sales to employee ratio. This number can help Uber ascertain how many customers are buying rides and then calculate how many employees (drivers) that Uber needs to hire in order to satisfy this demand. By using this method, Uber will encounter a great deal of success with balancing their supply and demand for drivers.
It is discussed in many forums that Porter provides force that dictate the potential for a business to be successful. These factors are outlined as: supplier power, buyer power, competitive rivalry, threat of substitution, and threat of a new entity. These factors are common place and frankly, Uber is not entirely secure on these points. The reason for this is that Uber is a great business model but not necessarily an iron clad business that is safe from rivals. Let’s see these factors divided up below for further analysis.
Beginning with supplier power, Uber has it all. They have the drivers and the App, which is their gold mine. It is highly unlikely that Uber is going to face any issues with this later on. Even though I recently heard from a driver that Uber is more difficult to work for, as long as drivers are making money from them, it will be highly unlikely that they will lose a great deal of work force any time soon.
Pertaining to competitive rivalry, obviously it will be quite difficult to take on Uber fully; however, if some billionaire decides to invest in a start up to do it, it is always possible if that start up beats Uber or if the nature of phones change yet again to something that is an App 4.0, then one never knows Uber could be beat. Uber’s largest competitor now is surely Lyft and if Lyft keeps offering their promos, is easier to work for, and includes a luxury division, Uber needs to watch out!
It is highly unlikely that Uber will be subject to a threat of substitution for their business model. However, their actually brand could always be substituted. This is not impossible. Additionally, there could be a foreign company that infiltrates their markets or the taxi drivers could wise up and create a superior service. This is always possible and Uber has to work to consistently keep their service a cut above to keep their market share.
Regarding a threat of a new entity, this is always possible as well. As mentioned earlier, Lyft is surely their largest threat. That being said, it is important when analyzing these aspects of business to think of the undiscovered. The classic example is the Blockbuster versus Netflix situation. Blockbuster actually had the chance to purchase Netflix and they passed and now they are bankrupt. The point with this story is that CEO’s have to challenge themselves to be forward thinking. Just because their business is hot now, it does not mean it will be hot later on. They have to be able to anticipate the way the consumer’s needs and wants will change to remain on top. Had Blockbuster bought Netflix, they would have a sensational business and be able to phase out their VHS rentals gradually and not be bankrupt. The moral of this story is that there is no law set in stone saying that Uber is here to stay. It is going to depend on their CEO’s decisions that dictate how the company fares in the long run.
This analysis aside, it is important to not discredit Uber for their success. They have truly been revolutionary in the transportation by providing a fast, safe, effective, affordable, and reliable way for consumers to fulfill their taxi needs. They have changed the younger generation and now older generation’s means of transportation. They have faced a plethora of resistance all over the world but they keep wining because their business model is what consumers want and will fight for because they were tired of disgusting taxis (myself included). Uber has made many people not need to own cars, which has also helped with our Carbon footprint without even realizing it. Additionally, in the generation that is burdened with student loans, knowing that a car is not necessary in many cities greatly helps the finances of many. Knowing that there will be a safe way to get around and get home has been vital to my generation and I appreciate it everyday. It will be quite fascinating to see how Uber evolves over the years; however, I am willing to wager that their sensational business model is surely here to stay and I will not take one of those disgusting yellow taxis unless I am in Somalia and there is no other option. Cheers to Uber!