Uber - the online Chauffeur Market

The online chauffeur market is an inexpensive service that provides users with convenient and enjoyable transportation from point A to point B. These services are convenient due to the fact that any person with a smartphone is able to benefit from the services. Some of the online chauffeur companies extend their services to areas where taxis do not regularly drive by.

The basic functionality of Uber’s app was allowing users to enter a pickup location and requesting a car to drive them to a desired destination. Users can also choose from a variety of vehicle options. Users were matched to the closest driver automatically. The fare was then charged to the rider’s credit card that was linked to the app.

Uber’s original business model was to have non-licensed drivers who operated their own personal cars to offer the service instead of working with traditional licensed taxi drivers. Eventually, Uber started to offer a wider variety of vehicle options which led to working with licensed chauffeur drivers, taxi drivers and rental companies. The purpose of this change was to extend the services offered

When entering the Chinese market, Uber initially introduced Shanghai to UberBlack. UberBlack was a higher end Uber service that provided luxury sedans. The next step was to introduce UberX in the cities of Beijing and Shenzhen. UberX service provides regular sedans at a lower price rate. Uber was trying to position itself as a premium travel experience for a lower price than other services.

UberBlack’s average rate often discouraged users who was just looking for a ride and did not care what the vehicle was. In an effort to increase users, Uber slashed the prices by 50 percent on base fares and by 30 percent for the per minute rate.

The price reduction introduced China to “People’s Uber” which led to exponential growth. People’s Uber was non-profit ride sharing program that encouraged safer and cleaner rides for the passengers and drivers. The goal of this program was to interact with more users along with preparing loyal customers for other for-profit products.

In order to make payment easier, Uber partnered with Alipay, which was China’s most prominent third payment solution ran by Alibaba. Alipay could be used a payment method on the app instead of the user’s credit card. In addition, Uber linked it’s services to Baidu Inc. for mapping purposes and also provided a more user-friendly interface.

With the partnering, Uber also implemented many promotions. In 2014, first-time users received a ¥30 coupon that could be used towards a Uber charge. Drivers who logged a certain number of rides were also rewarded. For example, drivers with 40 rides a day would receive an extra ¥400.

With of all these strategic moves, as of May 2015, Uber was active in 11 countries in China; Qingdao, Tianjin, Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, Chongqing, Hangzhou, and