Uber Case Study

Uber Case Study

Flora Jingxuan Nie

MKT 500 Marketing Management – 2017 Summer 1 – Section A

Abstract

Uber used to be the most valuable tech startup company. With an inflated expectation of $68 billion valuation, it was a super nova that changed the game of transportation and might also benefit in medical and other domains. However, start from last year, Uber has been sunk in a series of scandals, including its sexual harassment and sexism problem, accusation of stealing technology from its investor Google, “#deleteuber” social campaign, tech tool Uber uses to help its drivers to avoid government regulation and take advantage on the grey area of the law, the video of Uber CEO’s argument when an Uber driver confronted him about low fares, a number of Uber’s managers exit the company, and Uber’s CEO Travis Kalanick resigned on Tuesday this week. Those scandals tarnished Uber’s reputation. The society has doubts on Uber. Its employees are also gradually losing confidence on the company. The most important things for Uber are reshaping the company’s culture, repairing its relationship with its consumers, and rebuilding its public image and reputation in the society. This article will analyze Uber’s current situation and problems and give solutions on how to get out of troubles.

Key words: current situation, marketing strategies, solutions

Market Summary

Founded in March 2009, Uber has become the world’s most valuable startup, with a $68 billion valuation. However, according to The Wall Street Journal, Uber lost at least $2.8 billion last year and another $708 million in this year’s first quarter, due in large part to cash incentives necessary to keep drivers driving. Currently, Uber is tarnished by both internal and external troubles.

Uber’s Strength

Lower fare. Generally, Uber charges less money than taxi, especially when you choose Uber Pool, which allow you to share rides with someone else and you can split the fees with them.

Convenient pickup. Customers don’t need to wait in line or wave for a taxi, sometimes in some places it’s difficult to wait for a taxi to show up. With Uber app, customers can request Uber and wait indoor or somewhere comfortable and the Uber driver near you will pick up your order and arrive soon. In dense urban area, Uber driver can arrive in less than a minute. Even in the time which is hard to find a taxi such as late night or rush hour, Customers can request Uber on app and there will be Uber driver pick them up. And if customer need to go to airport super early in the morning, they can just book a pickup on the Uber app.

Easy to make a payment. Payment is charged directly to your card which is linked with your Uber app. There is no need for cash and the receipt will be emailed to the passenger.

Easy dispute resolution. Each ride receipt includes a map and a GPS track. Passenger can complain if Uber driver take a circuitous route. Uber is prompt with refunds.

Better service. Passengers can rate Uber driver and the ride on Uber app when they get the receipt. Uber can deactivate poorly rated drivers. Basing on passengers experience, they can choose to give the driver tips or not and how much tips they would like to give. Thus, Uber drivers are always trying their best to provide the best service to the customers, such as polite manner, smooth trip, neat car, and try all means to make the customers feel comfortable.

Opportunities to make extra money. Uber provides job opportunities for people who might have difficulty to find a job in the city but need income to survive. There are many full-time Uber drivers. Also, there are many people who have decent jobs but drive Uber in their spare time to make extra money. Different from company-employed drivers such as taxi drivers, Uber drivers can be their own boss and have fully control on their working hours.

Uber’s Weakness

Dynamic pricing. According to Uber’s official website, Uber fares are based on a dynamic pricing model, in which fares are higher during periods of high demand for rides. The same route costs different amounts at different times as a result of factors such as the supply and demand for Uber drivers at the time the ride is requested. This dynamic pricing can be a backlash for Uber. For example, in January 28th 2017, taxi drivers at JFK airport in New York launched a one hour work stoppage to protest president Trump’s controversial immigration order. However, Uber implemented surge pricing. Since Uber’s move enable people to get rides at low prices, it was perceived as undermining the strike to profit from the situation and as supporting president Trump. Then the social campaign #deleteuber exploded in response on social media. Uber said it was a misunderstanding. In February, Uber’s CEO Travis Kalanick stepped down from Trump’s economic advisory council.

Uber violates law in many areas. In some places, especially in foreign countries, no matter company-employed or self-employed drivers, they are all expected or requested to have local permits from the government and need to be under regulation. However, Uber drivers don’t have that permits. And Uber also uses a tech tool to help those drivers to avoid the government regulation.

Inequality in the workplace. Four months ago, a former Uber software female engineer posted a blog alleging Uber’s workplace was hostile to women. She accused sexual harassment from male engineer and sexism in the company culture, which, according to The Wall Street Journal, led to an investigation by former U.S. Attorney General Eric Holder that recommended an overhaul of Uber’s workplace practices and the dismissal of many employees.

Doubts on Uber driver’s behavior. A lot of lawsuits have been filed against Uber after some of the drivers attempted to sexually assault women driving alone in cars, other drivers offered passengers access to narcotics. In last year December, a Uber driver ran a red light as a passenger entered the crosswalk.

Less protection on Uber driver. With Uber’s low fare, it can be hard for Uber drivers to make money when there are more drivers than passengers. And even Uber driver provides good service, it’s not guaranteed that the passenger will rate well and give tips. Many people take Uber to avoid drunk driving. But drunk people can also be obnoxious and might cause harassment to Uber drivers. But Uber drivers are not under protection. In this year February, a video of Uber CEO Travis Kalanick’s argument with a Uber driver was published by Bloomberg. In the video, when the driver confronted Travis Kalanick about low fares, the CEO lost his temper. Though he published his apology, it had a negative affect on Uber and it also showed Uber drivers were not treated well by the company.