Summary of the Decision Situation
Just like any other company venturing into a new business, Uber is facing both marketing and pricing challenges. Uber has placed various services into use to ensure that it beats its competitors in providing ride-sharing services in the United States and other parts of the world, such as Europe, Asia, and Africa. Lyft is the main competitor Uber is facing in most of the United States cities. In the international platform, Uber faces a bigger competitive challenge more so in the Chinese market from companies such as Didi Kuaidi. Some of Uber’s services include charging their customers based on time and the distance traveled. Uber uses a technical calculation method by which clients are charged based on the distance they have traveled and the service they have chosen. A client can choose the type of the car to ride on for example, UberX, UberXL, UberBLACK, or UberSUV. The base payments for these services are different, and so are the cancellation fees. Additionally, customers can opt to pool themselves and share the cost. Unlike other taxi service-providing companies, Uber does not force riders to share a cab with someone they are unfamiliar with.
Alternative/Evaluation/Analysis
Pricing
Currently, Uber uses the “surge pricing” practice where charges can shift depending on the weather and the time of the day. An alternative to this practice can be to use a constant charging practice irrespective of the time of the day. The current practice promotes a lot of dissatisfaction from the side of the clients due to the uncertainty of the charges. Additionally, Uber should continue with the use of credit cards. The use of credit cards gives Uber an added advantage in the market, since most clients do not use cash. Customers will, therefore, be negatively affected in case Uber starts to charge them using cash.
Hiring Drivers
Drivers form an important part of Uber’s services. The manner in which they are treated, therefore, will determine the fall or rise of Uber. Currently, Uber has no formal way of recruiting drivers. They use a crude method by which they send officials to the streets in search of capable drivers who have some basic requirements. This is not the best way Uber can do things. The best way would be to provide an official link or site where Uber can post job opportunities for the drivers. Drivers who apply for the job would first be tested on various merits before getting hired. This will reduce the current outrage that some Uber drivers are under-qualified and that they lack proper relations skills with their clients.
The Uber Business Model
Keeping the customers and the drivers connected is the main aim of Uber. To ensure this, Uber uses a mobile app through which a customer can book a cab or search for a driver nearby. It is up to the driver to accept a request from a client. What if the client is given an opportunity to choose who will drive them, though? This alternative has not been explored by Uber, as most of the choices have been rested on the shoulders of the driver. The client and the driver can rate each other after a ride. A client with a low rating can be rejected by a driver. However, there have been few instances in which a client has rejected a driver due to low ratings.
Key Decision Criteria Used to Evaluate Each Alternative
The key decision criteria used in providing the alternatives include customer satisfaction, driver satisfaction, the risk level of the alternative, the ease of implementation, the rider’s and driver’s morale, and the cost savings on the side of the riders.
Comprehensive Analysis of Each Alternative Using the Key Decision Criteria
The first alternative was to render services at a constant price rather than using the “surge pricing” practice. The key decision criterion that was employed to come up with this decision was customer satisfaction. Customers will enjoy riding in Uber more in case the company can charge for the services constantly irrespective of the weather and the time of the day.
Secondly, coming up with better hiring criteria will ensure that the morale of the drivers is increased. Through formal hiring procedures, the drivers can be guaranteed other benefits such as insurance from Uber and better payment during both peak and off-peak hours. Therefore, the decision criteria applied here are employee satisfaction and morale.
Thirdly, the business model was another point of interest while coming up with better alternatives. While considering these alternatives, the ease of implementation, cost savings, and the level of risks were adequately considered. Uber should understand that they serve the riders and not the drivers. Therefore, the rider should be given more power than the driver to choose who should serve whom. For instance, it does not make sense for the driver to rate a customer. Most customers have different characters and habits. This must be accepted. Denying service to a customer because he or she is poorly rated is not right. Therefore, in coming to this decision, it was noted that denying the driver’s access to a customer’s rating history will have lower risk levels than otherwise.
Recommendations
Uber should reduce the standard charges for its services. To beat its competitors, Uber must have a reason to make the clients believe in them. One of these ways is through reducing the standard charges and scrapping the “surge pricing” practice. Uber must also have a formal portal for hiring the drivers. Drivers hired must be tested on various merits to ensure that they are fit to satisfy the demands of the clients. Additionally, Uber can provide training programs for their drivers. As part of the business mode, Uber must ensure that their clients are empowered to choose which driver will serve them. Giving customers such choices will make the drivers more responsible with their services to gain a higher rating. By considering both client and driver satisfaction and holding its services to high standards, Uber can successfully beat out its competitors and become a powerful company in the taxi-service industry.
