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- Snippet from Wikipedia: Uber
Uber Technologies, Inc., commonly referred to as Uber, is an American multinational transportation company that provides ride-hailing services, courier services, food delivery, and freight transport. It is headquartered in San Francisco, California, and operates in approximately 70 countries and 10,500 cities worldwide. It is the largest ridesharing company worldwide with over 150 million monthly active users and 6 million active drivers and couriers. It facilitates an average of 28 million trips per day and has facilitated 47 billion trips since its inception in 2010. In 2023, the company had a take rate (revenue as a percentage of gross bookings) of 28.7% for mobility services and 18.3% for food delivery.
Uber classifies its drivers as gig workers or independent contractors, a practice that has drawn criticism and legal challenges because it allows the company to withhold worker protections that it would have been required to provide to employees. Studies have shown that, especially in cities where it competes with public transport, Uber contributes to traffic congestion, reduces public transport use, has no substantial impact on vehicle ownership, and increases automobile dependency. Other controversies involving Uber include various unethical practices such as aggressive lobbying and ignoring and evading local regulations, many of which were revealed by a leak of documents showing controversial activity between 2013 and 2017 under the leadership of
Introduction
The incorporation of Uber, the leading global provider of transport services, have changed people's way of movement from one place to the next. Uber, which was founded back in 2009, has successfully changed its simple ride-sharing into a tech giant with multiple services that are available today. This mission includes the scrutiny of Uber's business structure and strategy, thereby identifying the driving forces and organizational principles.
Business Model vs. Business Strategy
Business model is the document containing a company’s scheme of actions determining how it aims to create profit and conduct its business in the future. It consists of tangibles like assets, liabilities, equity, and intangibles like intellectual property rights. In essence, it puts down basic principle of how business is run and the logic behind it, with the aim of creating value for all its stakeholders. However, business strategy focuses on the ultimate goal that is developing a comprehensive strategy to ensure the company's long-term success and competitiveness. This is a process of making decisions about market role, project identification, and resource distribution that could help meet business targets. Even though the business model lays out the concepts of how the company would make profits, the business strategies are the roadmap to winning in the industry and building a sustainable competitive advantage (Vargas-Hernández, 2020). The business model is based on the details of what will be the source for the income, and the business strategy is a broader goal focusing on how to achieve the targets and gain the competitive advantage in the market.
Uber's Value Proposition
Uber’s unique value proposition is what makes it stand out in the transport sector, with its product, service, customer relations, and brand image working together in the formation of something new and different from the existing players.
First Uber produces services and products that offer user a safe and convenient transportation option. With an easy-to-use mobile app, users can quickly request a ride, pick a journey that perfectly suits their desires, and relax the entire way without worrying about mishaps. Choosing a cheap mode of transport or high-end services, Uber serves diverse customers and secures accessibility for all.
Besides that, Uber highly values their target users with a goal to exceed their expectations in each & every interaction. This is achieved in a number of ways, which include a user-friendly booking interface, prompt response times and transparent pricing to stay ahead of the competitors (Yun et al.,2020). Features that promote transparency like real-time tracking and driver ratings increase trust and accountability which in turn engender a positive user experience that produces customer loyalty that is long term.
Furthermore, to the products and services the company offers, the brand image of Uber contributes significantly to the value proposition. The company has developed a powerful brand identity that proves to customers that it is all about innovation, convenience, and accessibility. Through adopting the newest technology trends in transport logistics and street mobility, the company has transformed into a number one leader and a disruptor at the transportation market. In this respect, this method has given Uber a competitive advantage over traditional taxi services and has particularly attracted consumers who are in need of modern, time saving solutions.
Revenue Generation Strategy
To its revenue generation strategy, Uber uses a varied approach in order to boost profitability and take risks related to driver’s demand. The fundamental revenue basis of the company is the commission-based fee it charges to drivers for each trip they complete. This structure motivates drivers’ involvement as well as offers a permanent revenue source for the Uber company. Also, like surge pricing, Uber makes use of it during high-demand periods to ensure higher fares to increase revenue.
In addition, Uber generates more income by entering into a marketing agreement and creating the subscription services as Uber Eats and the Uber Rewards. These programs do not just generate the revenue but also increase the user satisfaction through the provision of extra services and rewards. Through diversification of its revenue sources and addition of service offerings, Uber has stabilized its finances as well as it has significantly cut its dependence on rides only.
Cost Structure
Uber's cost structure is made up of several elements, including travel incentives, technological development, marketing expenditure, regulatory compliance, and administrative overhead. Driver incentives like sign-up bonuses or even performance-based rewards make up a significant part of Uber's expenses, in order for it to attract and retain a large fleet of drivers. Besides, research and development investments are critical for enabling the functionality of the Uber app, optimizing its usability, and remaining the step ahead of competitors. Marketing costs contain expenditures for brand promotion, customer acquisition and market expansion, among others, on a global basis (Swofford, 2020). Also, Uber spend resources to fulfill regulatory requirements and take a legal challenge in different districts accordingly. Value Creation Structure: Uber’s value creation is based on its use of technology, optimization of production, and making benefits for all clients and stakeholders. Through applying data analytics and machine learning algorithms, Uber can perform driver allocation in an optimal way, minimizing wait times and improving route efficiency, thus improving the whole user experience. In addition, Uber's platform provides economic opportunities for drivers that offer flexibility and earnings as an overtime option. By constant innovation and establishment of solid strategic partnerships, Uber strives to spread its value proposition, establish a wider market scope and obtain sustainable growth prospects for the future.
Conclusion
In conclusion, the Uber's triumph is rooted in its business model innovations, customer-focused techniques, and strategic thinking. Through its ability to challenge conventional mobility and incorporate new technologies, Uber has transformed urban mobility and set the benchmark for ease and accessibility. Nevertheless, Uber will still need to deal with the prickly issue of regulatory challenges, market dynamics, and the fickleness of their customers in order to remain successful in the long haul. With nonstop innovation and a mindset for perfection Uber will be able to influence the future of transportation and lead the world into new era of mobility which will be had by generations to come.In 2009, Garrett Camp, a co-founder of StumbleUpon, came up with the idea to create Uber to make it easier and cheaper to procure direct transportation. Camp and Travis Kalanick had spent $800 hiring a private driver on New Year's Eve, which they deemed excessive, and Camp was also inspired by his difficulty in finding a taxi on a snowy night in Paris. The prototype of the mobile app was built by Camp and his friends, Oscar Salazar and Conrad Whelan, with Kalanick as the "mega advisor" to the company.
In February 2010, Ryan Graves became the first Uber employee; he was named chief executive officer (CEO) in May 2010. In December 2010, Kalanick succeeded Graves as CEO and Graves became the chief operating officer.
Following a beta launch in May 2010, Uber's services and mobile app launched publicly in San Francisco in 2011. Originally, the application only allowed users to hail a black luxury car and the price was approximately 1.5 times that of a taxi. In 2011, the company changed its name from UberCab to Uber after complaints from San Francisco taxicab operators.
The company's early hires included a nuclear physicist, a computational neuroscientist, and a machinery expert who worked on predicting arrival times for Uber's cars more accurately than Google APIs. In April 2012, Uber launched a service in Chicago, whereby users were able to request a regular taxi or an Uber driver via its mobile app.
In July 2012, the company introduced UberX, a cheaper option that allowed drivers to use non-luxury vehicles, including their personal vehicles, subject to a background check, insurance, registration, and vehicle standards. By December 2013, the service was operating in 65 cities.
In December 2013, USA Today named Uber its tech company of the year.
In August 2014, Uber launched a shared transport service in the San Francisco Bay Area and launched Uber Eats, a food delivery service.
In August 2016, facing tough competition, Uber sold its operations in China to DiDi in exchange for an 18% stake in DiDi. DiDi agreed to invest $1 billion in Uber. Uber had started operations in China in 2014, under the name 优步 (Yōubù).
In 2016, Uber acquired Ottomotto, a self-driving truck company founded by Anthony Levandowski, for $625 million. Levandowski, previously employed by Waymo, allegedly founded Ottomotto using trade secrets he stole from Waymo. Uber settled a lawsuit regarding the use of such intellectual property and reached a deal to use Waymo's technology for its freight transport operations.
In December 2016, Uber acquired Geometric Intelligence. Geometric Intelligence's 15 person staff formed the initial core of "Uber AI", a division for researching AI technologies and machine learning. Uber AI created multiple open source projects, such as Pyro, Ludwig, and Plato. Uber AI also developed new AI techniques and algorithms, such as the POET algorithm and a sequence of papers on neuroevolution. Uber AI was shut down in May 2020.
In August 2017, Dara Khosrowshahi, the former CEO of Expedia Group, replaced Kalanick as CEO.
In February 2018, Uber combined its operations in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan with those of Yandex.Taxi and invested $225 million in the venture. In March 2018, Uber merged its services in Southeast Asia with those of Grab in exchange for a 27.5% ownership stake in Grab.
Between May 2018 and November 2018, Uber offered Uber Rent powered by Getaround, a peer-to-peer carsharing service available to some users in San Francisco.
In November 2018, Uber became a gold member of the Linux Foundation.
In 2018, Uber formed a partnership with Autzu, a Toronto-based ridesharing company. This collaboration provides Uber drivers with the opportunity to rent electric Tesla on an hourly basis.
On May 10, 2019, Uber became a public company via an initial public offering.
In the summer of 2019, Uber announced layoffs of 8% of its staff and eliminated the position of COO Barney Harford.
In October 2019, Uber acquired 53% of Cornershop, a provider of grocery delivery services primarily in Latin America. In June 2021, it acquired the remaining 47% interest in Cornershop for 29 million shares of Uber.
Between October 2019 and May 2020, Uber offered Uber Works, a mobile app connecting workers who wanted temporary jobs with businesses in Chicago and Miami.
In January 2020, Uber acquired Careem for $3.1 billion and sold its Indian Uber Eats operations to Zomato.
Also in January 2020, Uber tested a feature that enabled drivers at the Santa Barbara, Sacramento, and Palm Springs airports to set fares based on a multiple of Uber's rates.
In May 2020, during the COVID-19 pandemic, Uber announced layoffs of over 14% of its workforce.
In June 2020, in its first software as a service partnership, Uber announced that it would manage the on-demand high-occupancy vehicle fleet for Marin Transit, a public bus agency in Marin County, California.
In September 2020, Uber committed to carbon neutrality globally by 2040, and required that, by 2030, in most countries, rides must be offered exclusively in electric vehicles.
In December 2020, Uber acquired Postmates for $2.65 billion.
Also in December 2020, Uber sold its Elevate division, which was developing short flights using VTOL aircraft, to Joby Aviation.
In January 2021, Uber Advanced Technologies Group (ATG), a joint venture minority-owned by SoftBank Vision Fund, Toyota, and Denso that was developing self-driving cars, was sold to Aurora Innovation for $4 billion in equity and Uber invested $400 million into Aurora.
In March 2021, the company moved to a new headquarters on Third Street in Mission Bay, San Francisco, consisting of several 6- and 11-story buildings connected by bridges and walkways.
In October 2021, Uber acquired Drizly, an alcohol delivery service, for $1.1 billion in cash and stock; it was shut down in early 2024.
On January 20, 2022, Uber acquired Australian car-sharing company Car Next Door.
On September 15, 2022, Uber discovered a security breach of its internal network by a hacker that utilized social engineering to obtain an employee's credentials and gain access to the company's VPN and intranet. The company said that no sensitive data had been compromised.
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