Case Study
Uber in 2016: Can it remain the dominant leader of the world’s fast-emerging ridesharing industry?
Abstract
Uber is a private transportation company which evolving the way world moves. It connects riders to drivers through company’s app which called uber app which make cities and places more accessible. This case study includes history of uber company and industry information, porter’s five force analysis, PESTEL analysis and SWOT analysis. Its mission is to remain the dominant leader of the world’s fast-emerging ridesharing industry. In this case study author tried to focus on analysis of problems and solutions for the same. Author also mentioned financial data of the uber in terms of its income statements, financial statements and cash flows in last three years. To overcome problems and issues, author mentioned different strategies and recommendations in this case study.
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Case Study
Uber in 2016: the dominant leader of the world’s fast-emerging ridesharing industry
Uber is an American transportation start-up company founded in San Francisco, California in 2009 by Travis Kalanick and Garrett Camp who created an innovative app for cab service putting together the technology. This service is now available in 70 countries around the world. Users can request a ride using a mobile phone and closest available participating driver is dispatched through the location. Users are also able to track the location of the driver while in route. As the user’s credit card information is already on file with uber app, riders are charged automatically which includes tip and receive a receipt by email. In addition to a licensed taxi, Uber users can request a “black” car, the default option as well as an SUV or lower priced “UberX” car. In Paris, France uber users can also request a motorcycle. A prototype of the Ubercab software was tested in New York City in January 2010. Uber cab went live in San Francisco on May 31, 2010. Even though, a ride using ubercab cost about 50 percent more than a taxi, the service provided a higher quality car.
The convenience and reliability of the service appealed to a significant number of San Francisco residents. Chris Sacca, one of the Uber cab’s users was an investor whose firm Lowercase capital invested $1.25 million in an initial round of fundraising in October 2010 that was led by first-round capital. Interest in Uber cab app grew among android device users, so Uber cab introduced an android app in November 2010. In February 2011, the company completed a round of series A funding that raised $11 million. Benchmark Capital led the round with further participation from Uber’s previous investors. Late in 2011, Uber conducted a Series B round of fundraising. Menlo Ventures contributed $39 million in fundraising. Uber used its cash to expand its service to additional cities. In each city it served, Uber hired a manager who create a network of drivers. Moreover, Uber created a surge pricing model which raised the price of fares at peak times. In this way cars are always available for users who willing to pay the prevailing price.
According to Law (2009), PESTEL is an analysis of the external environment of the firm and it stands for political, economic, social, technological, legal and environmental issues that could significantly affect the strategic development of a firm. Since Uber is a global online ridesharing company, this macro-environmental analysis focuses on many issues and problems from many countries in the world where Uber is present.
Economic: The concept of ‘sharing economy’ is mentioned by PwC (2015) to facilitate reduction of waste arising from the ownership of a product and technological innovation reduce the gap between supply and demand of this concept. Also utilization of ideal resources can result in more efficient markets, where the community can have more income-earning opportunities.
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