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Examine the Reasons for Uber's Success in the Taxi Market.

Extracts from this document...

Introduction

Transfer-Encoding: chunked ________________ TABLE OF CONTENTS ABSTRACT 2 INTRODUCTION 3 LITERATURE REVIEW 3 BACKGROUND 4 ENVIRONMENTAL ANALYSIS 6 POLITICAL FACTORS 6 ECONOMIC FACTORS 6 SOCIAL FACTORS 7 TECHNOLOGICAL FACTORS 8 LEGAL FACTORS 8 INTERNAL ANALYSIS 9 SWOT ANALYSIS 9 EXTERNAL ANALYSIS 10 MARKET DYNAMICS 10 PORTER?S 5 FORCES ANALYSIS 11 Bargaining Power of Suppliers: 11 Bargaining Power of Customers 12 Threat of Substitutes 12 Threat of New Entrance 12 Rivalry Against The Competitors: 12 FUNCTIONAL ANALYSIS 13 SIZE, GROWTH AND PROFITABILITY 13 CORPORATE AND BUSINESS LEVEL STRATEGIES 15 VALUE-CREATING STRATEGY 15 INTERNATIONAL LEVEL STRATEGIES 16 UBER IN EUROPE AND TURKEY 16 BIBLIOGRAPHY 17 ________________ ABSTRACT In this study, we purpose to research Uber Inc. as a market leader in ride sharing application market and sharing economy with considering internal and external factors that might be effective on the company?s development process. Besides, we try to collect recent news about Uber to illuminate its strategy has been taken according to circumstances. ________________ INTRODUCTION The aim of this research is comprehend the strategies behind sharing economy industry leader Uber Technologies Inc.?s unrestrainable success despite of all legal obstacles, law suits, protest upraised by taxi drivers that it is facing everyday. Since on-demand ride sharing mobile application Uber lunched by Uber Technology Inc., a number of companies copied its business model and that trend has been referred as "Uberification" (Boland, 2014). Today, Uber has reached $62.5 billion valuation with more than 8 million users in 68 countries that include Istanbul, Turkey (Newcomer, 2015). Uber?s rivalry competitor Lyft follows Uber as a market follower with attempt of new service innovations to became competitive in the market. LITERATURE REVIEW In this project, current published sources and daily news will be mastering us to prove our statements since Uber is an ongoing social innovation that catches a big trend and popularity around the world. We also consider users comments. ...read more.

Middle

LEGAL FACTORS Uber Company has been suffered many times due to legal issues. Most of time, It caused bacuse of drivers? status on Uber since regulatory rules does not fit to sharing economy. And frequently, Uber was supposed to come face-to-face with the drivers. There have been lots of cases on this issue. Recently, Uber accepted to settle down on a case about Uber driver status with concession. According to New York Times reporters Mike Isaac and Noam Scheiber, ? Uber will let it ________________ continue to categorize drivers in those states as independent contractors ? a landmark agreement that could have lasting implications for the long-term viability of the ride-hailing service.? (Isaac & Scheiber, 2016) INTERNAL ANALYSIS SWOT ANALYSIS 1. STRENGTHS * It is a well-known brand all around the world. * It offers high standard of service with verified drivers and cars. * Regular Taxi service regulations are not applicable for Uber. * Lower prices compared to taxi cabs * Uber does not hire drivers and it does not responsible them as employees. * Operational cost is low. * Competition is low. There is one rival is Lyft. * Cashless payment system. * Dual rating system boosts trust and safety. * Offering better travel conditions. 1. WEAKNESSES * The business model can be easily imitated. * There are ethical questions on relationship between Uber and drivers. * Loyalty between drivers and Uber is quite low. * Privacy concerns ________________ * Legal issues 1. OPPORTUNITIES * Traditional taxi cab?s high prices and long waiting time. * It can exploit new and big markets in countries like India where taxi services are inconvenient and expensive. 1. THREATS * Drivers aren?t happy with the low-profit margins. * Legal regulations * Uber is highly dependent on political and economic changes. EXTERNAL ANALYSIS MARKET DYNAMICS Finite oil supplies, rising gas prices, traffic congestion, and environmental concerns have recently increased the interest in services that allow people to use personal automobiles more wisely. ...read more.

Conclusion

Every city has a general manager who heads the customer acquisition as well as driver acquisition. The first cabs to come on board are generally ________________ professional drivers who are already associated with local taxi companies and have their own cars. First customers come from various local advertising channels like FM radio, newspapers, online advertising etc. Uber is such a large name that people are already waiting for the cab company to start services in their city. Main Growth opportunities tapped by Uber Party people who go to clubs, parties or events. Business Travellers and Tourists. Cab at doorstep in bad weather conditions. City’s Nightlife. CORPORATE AND BUSINESS LEVEL STRATEGIES VALUE-CREATING STRATEGY As a value proposition for customers, Uber offers no need to wait for a taxi for long times. Additionally, free rides on certain occasions and discounts from time to time. Since the prices lesser than the normal taxi fares it is more attractive on customers mind. Uber’s tagline says – Your personal driver. It lets customers travel in style. And they determine fixed prices for common places like Airport etc. As a value proposition for drivers, Uber has additional source of income and flexible working schedules. Drivers also can work part time or simply whenever they like. ________________ Easy payment procedure helps everyone to use Uber easy. Those who love to drive can earn money while pursuing their hobby. And Uber pays drivers to be online, even if they don’t get any request. INTERNATIONAL LEVEL STRATEGIES UBER IN EUROPE AND TURKEY Uber starts to operate in 2015 in Ä°stanbul. UberBlack is the product that they establish for Turkey. As a marketing, National basketball player Sinan Güler is chosen as a testimony. Uber take Sinan Güler with a Mercedes S Class car via its application. UberBlack starting price is 11,20tl and for each kilometer 3tl will charged. (Webrazzi.com, 2015) It’s operating just only in Ä°stanbul and they are try to work with taxis as well. Even for the market penetration Uber uses 20% off, legal issues may affect their performance badly for the near future. ...read more.

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