Uber is a modern transportation network where passengers and drivers have greater connectivity and flexibility via the mobile application created by Uber Technologies Inc. Its technological innovation of practical features to drive, book or share a cab ride conveniently through the application had revolutionized traditional taxi industry. Uber has answered the need of consumers by providing an alternative taxi service that arrives on-demand with extended features allowing consumers to select the type of car service, track location that allows greater visibility and provides fair cab fares estimation to the destination of choice. With the effect of mobile technology and social media trends rising, it has undoubtedly attracted early adopters who are tech savvy and needed convenient taxi transportation service to decide to give Uber a shot (Kemp, 2015). Recruitment in Uber is more flexible because private car owners can also register as a Uber driver for part-time income. With the additional feature that both riders and drivers give ratings after each trip, Uber’s transport services gradually increased in credibility and assurance for safety. Known for its reliability, inexpensive and experiential values displayed, Uber has grown from its humble beginnings in 2009 at San Francisco city to successfully penetrate into global markets. Today, Uber has become a competitive commute choice for consumers, drivers and entrepreneurs alike (Chokkattu and Crook 2014).
Uber utilized technology to venture globally through its effective business approach driven by acts of social responsibility. As Uber is available in many cities globally, usage becomes more accessible than traditional taxis because the Uber application can be used internationally to request rides as long as there is mobile data or Wi-Fi, especially useful for business travellers. New Uber users need to enter contact and payment information that will be stored for tracking, rating experiences, and cashless payment purposes enabling Uber to reach a global target audience who is tech savvy, regardless of language or location barriers. Uber had also cleverly ventured into targeted urban populations and geographic locations that have the habit of hailing a cab to travel around. Uber’s business model seems more of a logistic platform network that supports and connects passengers and drivers together with significantly clear and transparent processes for both partners and riders. Thus, Uber is situated in more developed countries that have high percentage of affluent, educated and highly tech-savvy audience.
Products, People, Value Proposition
In contrast to traditional taxis, Uber product offerings ranges from low to luxury transport options namely Economy, Premium, Accessibility, Carpool which are further segmented into multiple price range that caters to different customer type and needs. For instance, Uber customers can opt for ‘UberPOOL’ that allows ride sharing with other riders who are going the same direction and cost will be split fairly through cashless payment. Such options are not offered in regular taxis (Uber 1, 2016). It is evident that Uber’s transport services are more customized and varied compared to taxis and private owned drivers. The wide range of product offerings not only apply within riders but also attracts and encourages potential Uber drivers to join as well. Uber applied multiple segment specialization strategy, where rides are needs based and situational segmented to suit all occasions and demographics (Kotler and Keller, 2016). Uber was able to garner a strong and large base of loyal audience. Below shows the unique value propositions Uber offers to its community of both riders and drivers:
To both parties, Uber’s product value proposition increases customer profitability, solves prevailing time constrain issues that comes with amazing features such as GPS status tracking and insurance coverage to give assurance to passengers and rides. What a promise for a ride experience!
Positioning & Processes
Unlike physical taxi service operators who need to pay local governmental licensing fees and drivers who are burdened with a monthly fixed cab rental, Uber do not have those overhead cost. By innovating a mobile application that provides on-demand rides using technology gives Uber the advantage of lower start-up cost thus able to charge lower costs. Since Uber is positioned as a convenient, reliable with competitive lower pricing options for commuters, it is not difficult for brand advocates to emerge. As cashless payment is made directly to Uber, the risk for frauds is lower that also makes Uber a safer choice compared to traditional taxis (Belbey, 2015). In the perception of drivers, Uber gives them autonomy and equipped them with adequate resources based on value propositions resulting in a positive internal marketing and better drivers. Payment periods for Uber private own car drivers are on a weekly basis, which is shows Uber is an efficient company.
Successful Design, Strategy and Management of Communications
Articles around the world discuss on the existence of Uber as a disruption that taps on the usefulness of technological channels to form consistent consumer engagements and brand build (Wilkin, 2015). It is evident that Uber recognized that effective communication with consumers through relationship marketing using its network strengths would improve customer experience (Kotler and Keller, 2016). Uber’s success can be attributed to the fact that the company had applied holistic marketing strategies that includes internal, integrated, performance and relationship marketing. Uber collaborates with car companies and partners to ease the price of car rentals for their drivers. Recently, ‘Toyota and Uber have entered into an agreement where the two companies will investigate developing a strategic partnership, and new mobility services for customers’ (CNET, 2016). Uber also participates in the creation of jobs, reduction of congestion, reduction of pollution and unsafe drunk driving. Their community involvement in social responsibility have assist Uber to charge into new markets in South East Asia.
Possible Failures of Uber
In view of the global reach of Uber, there were several resistances around the world that impacted the company as well. The company faced disputes with local governments because its emergence had caused a decrease in profitability of local taxi industries (Posen, 2015).
- Attracted a large number of drivers over to the app, impacting private-hire companies and black cabs in UK
- Strikes occurred due to unhappy parties
- Lawsuits were filed that require Uber to treat contract drivers as employees
- Risk of Uber drivers involved in crimes, tarnishing Uber’s reputation of delivering a safe ride
- Price Hikes – Demand & Supply Algorithm
While the above points are negative publicity to Uber, the buzz of discussion may have also have marketed the company to more consumers, creating awareness of the Uber service.
Uber has changed the way people think when they need a taxi. It has become so convenient because a car ride is a few taps away on your mobile phone. The use of technology and business smartly combined together has successfully created a new business opportunity. Uber supplied the scarcity of cabs and requires customers to agree to the rate increase before they get in the car. Not only did Uber created a solution that delivers the ultimate ride experience, their unique marketing approach to consumer experience spurs high participation, and customer empowerment, thus creating a Uber community loop effect that advocates. Technology enables businesses to replace manpower with low start-up cost but also create fresh ideas for slow mature growth industries, creating new demands. Uber reshapes consumer needs and wants by engaging and delivery a holistic customer experience that surpasses customer’s expectations.
Are you or your business ‘Uberized’ yet?
References
Asia One. 2016, ‘Uber vs Grab vs Taxis: Which is the cheapest mode of transport and when?’ Moneysmart, available at: http://business.asiaone.com/news/uber-vs-grab-vs-taxis-which-the-cheapest-mode-transport-and-when, accessed on 7 August 2016
Belbey, J. 2015, ‘Compliance Uncertainty And Social Media: Lessons From Uber, Airbnb, And Drones.’, Forbes, available at: http://www.forbes.com/sites/joannabelbey/2015/04/16/compliance-uncertainty-and-social-media-lessons-from-uber-airbnb-and-drones/#310678c6218d, accessed on 10 August 2016
Chokkattu, J. Crook, J. 2014, ‘A Brief History of Uber’, Tech Crunch, available at: https://techcrunch.com/gallery/a-brief-history-of-uber/, accessed on 8 August 2016
Kemp, S. 2015, ‘Digital, Social & Mobile Worldwide in 2015’, We Are Social, available at: http://wearesocial.com/uk/special-reports/digital-social-mobile-worldwide-2015, accessed on 8 August 2016
Posen, H.A. 2015, “Ridesharing in the sharing economy: should regulators impose Uber regulations on Uber?”, Iowa Law Review, vol. 101, no. 1, pp. 405.
Uber 1. 2016, ‘UberBLACK – Professionally driven black cars’, Uber Technologies Inc., available at: https://www.uber.com/ride/uberblack/, accessed on 7 August 2016
Wilkin, S. 2015, ‘Opinion: The Uber revolution is liberating — and disturbing’, available at: http://www.marketwatch.com/story/the-uber-revolution-is-liberating-and-disturbing-2015-11-23, accessed on 7 August 2016
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