Uber Case Study

1.

Uber’s business model

        Uber determine themselves as a Technology company not transportation company. It provides customers and drivers connect to each other thus they do not offer the actual transportation. Because of this kind of industry, have no requirement the licenses and registrations that a regular taxi company need to gain. Therefore, Uber’s profits grew because drivers do not have to pay car registration fees to governments and they can set their own schedule. There are no registration requirements lead Uber to enter markets more easily. Another Uber’s interesting thing is Uber do not consider driver as the employees of Uber but the contractors instead. These strategies can make Uber offer less fare, compared to traditional cab drivers

Customer value proposition

        Uber connected the customer and driver via application to the fastest pickup, appear exactly driver location and the minutes of each trip and how long the driver coming, which could make more convenience and easier. The fares automatically show the cost of the fixed prices, regardless of the traffic. Also, the fares are cheaper than taxi fares.

Uber’s Profit formula

        Uber earn the revenue by taking a percentage of the transportation fare from drivers. Uber keeps 20% and driver 80%. They surge pricing to meet the demand during the peak time.

2.

Threats of substitute products from competitors a threat of substitutes such as trains and private cars are currently a weak force, compared to Uber competitive advantage.

Threat of the entry of new competitors it is not easy to stop other imitate transportation company as Uber is technology-based company. This might also new ridesharing company will charge less fares for the same distance.

Intensity of competitive rivalry the competition of ridesharing industry has been rising than previous years. Lyft is a direct competitor of Uber. They are sharing market share but Uber is indeed a dominant firm in the industry.

Bargaining power of customers the customers’ power can impact on income if the demand is low due to the number of private cars ownership is growing in the past few years. And customers can freely choose other ride-sharing companies such as Lyft and Juno.

Bargaining power of suppliers Uber does not own the car. It mostly depends on drivers(suppliers). The Uber’s requirements are not high thus it could not motivate drivers to attach to Uber. This indicates that suppliers have strong power impact to Uber.