Uber cabs business model - Essay Example

Uber Network

The company has a broad partner network that allows for their operations as well as growth to emanate from both sides in their market. Uber has partnership with Braintree Services so that they can be in a position to scale their payment processing for the United States and the international payment procedures. Braintree provides a platform for Uber where the payments can specifically be made through mobile phone transactions. For the passengers, Uber develops several brands that can enable the creation of new passenger channels. For instance, Uber established a partnership with NFL Players Association where the players can call for Uber rides when in need of traveling to sport events or from similar events so that they can keep off driving when drunk and under influence. 

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Uber went ahead and partnered with Google for several value addition activities such as integrating Google maps with Uber services where people using Google Maps can access the option of boarding an Uber ride to the place where they are headed when they open google maps looking for direction. Uber also launched an App Program Interfact one that allows other external applications and the IT developers for integration with their platform such as displaying various Uber products, fare rates and the time estimations among other essential specific user activities and details. For the company to fuel their growth on the supplier side they made partnerships with Toyota, GM and other financial institutions so that they can help the drivers to reduce the monthly costs incurred as well as acquire easier financing. 

Uber technologies

The main resources for Uber include the Smartphone apps that allow the connection and the exchange between the travelers and the drivers highly convenient and efficient, the human resource, community support and management, developers and engineers to aid in the application and the driver’s operations (Price Waterhouse Coopers, p.7). Uber as a brand has become popular in many parts of the world especially big cities and its association with luxurious towncar vehicles that create the premium experience for brand experience. Furthermore, Uber is among the highest valued venture-backed startups around the globe. It is valued at $41.2B USD as of June 2015 (PriceWaterhouse Coopers, p.5). Through the assistance of the venture investors, Uber gets support and access to broader networking opportunities as well as partnerships. 

Uber customer care

Information strategy 

Uber is mainly a company that is data driven and they have dedicated a scientific data team assigned with data collection on the users. The data includes aspects such as the location and the temporal data aimed at progressively improve the services provision and delivery to the customers in a manner of high and world class levels. The platform analyzes the data on how the Uber users transit from one place to another in different city’s neighborhoods as well as the behaviors of the different users in the neighborhoods at different spots and varying time spots so that the demand can be easily predicted. This criterion is aimed at helping reduce the waiting times by the users when they order an Uber ride. The Data is also an effective tool to help set the prices by the company, it helps Uber to embrace a pricing scheme that is flexible and efficient for the customers depending on the varying levels of demand at different periods. The surge pricing adopted by Uber is a strategy by the company to ensure that there are sufficient vehicles on the road to meet the high demand, for instance the New Year, the rates for the charges rise at a significant amount so that there can be more Uber’s on the road for the customers to have access to a ride at any time they request a ride and once there are enough cars available for the customers the rates decrease. However, the customers are notified of the surge pricing via the application before boarding an Uber ride. 

Distribution Channels 

The main channel for accessing passengers for Uber is through the word of mouth. For the company to facilitate and help this service grow, they have developed a rewarding system for the passengers where they can refer friends for points that they can use in the future in accessing Uber services. The company further makes the referral procedure more attractive by ensuring that the friends to the passengers get discount codes. The feature for sharing rides can be directly accessed on the application to allow the travelers to be readily prompted with the specification after every ride on Uber. The travelers who manage to refer a minimum of 15 people to Uber services become enlisted to a program referred to as the Uber Evangelist program and they officially become entitled to some privileges from Uber by getting free gifts or special invitations to Uber events.  

On top of the customer based promotions by the company, Uber also engages in partnerships with customer adoption brands. The partnership with Google allows for the use of Google maps with access to an option of getting an Uber ride to take the customer to their destinations, the option for Uber rides is directly accessible on the Google Map applications. Uber engages in other activities that help improve the customer awareness, the events include activities such as events for free-rides where customers can test the Uber services. The main objective by Uber is to change the initial adopters and the trial customers to customers through means of providing them with exemplary customer services at prices that are competitive. So that Uber can get more drivers into their system, they have employed a broad variety and options for the channels for instance posting ads on the Craigslist, recruitment shows and promotional events on the streets. Uber also engages in direct competition by approaching drivers from other competing companies so that they can switch their preference to Uber for transport services. 

Uber loyalty program

The aspect of trusting by the two sides and safety are important elements in Uber’s marketplace, they therefore saw to the implementation of several measures from the track-ability of the rides via the Uber application, conducting of background checks on the drivers and implementing a review system for both sides of the market. Further, the company took an insurance policy worth $1M USD for driver liability for each ride as well as a cashless payment system. 

The aspect of background check comprises of a big section of the operations run by Uber. The utilization of a multi-structured background analysis and checks that includes three levels of screening at the county, the multi-state finally the federal is conducted on each driver who gets into the platform so that there can be assurance all the drivers meet the defined criteria for running the Uber services. They therefore should be free of any violent crimes, non-involvement in fatal accidents sexual offenses or reckless driving. 

The review system is an efficient way to help Uber retain their quality controls under check by deactivating the drivers who fail to meet certain review scores at given minimal points from the system. The drivers are also allotted the option of rating the riders after every ride despite the fact that this form of rating is not made public or brought to the attention of the passenger. This allows the drivers to know if they may pick up the passenger based on the rating or not to take them in cases where the score is too low (Cusumano, p.34). 

Uber financing

Uber’s system allows for the company to make 20% of the cost paid by the passenger for each ride while the drivers keep the remaining 80%. For the company to fuel their growth, in situations where they are launching new services in a given city they mostly lower the take-in percentage to motivate more drivers to subscribe into the system. In some of the selected cities Uber only keeps 5% from the charges to the passengers in their UberX service so that this may act as an incentive to allow more drivers to sign up to the platform. 

Uber incurs other costs besides the costs for maintaining the application through other sections such as the insurance costs for the employees, the costs incurred in acquiring new customers for instance in situations where they offer free rides as well as credits in the reward system program (Price Waterhouse Coopers, p.7). By July 2015, Uber had claims that they employ approximately 50,000 new drivers in various regions for different functions (Katz, p.1083). The functions mainly comprise of community management, data analysis, driver recruitment, and training and background checks among other minor activities. The company is engaging and interfering a highly delimited industry and therefore it comes across several regulatory measures and hurdles, this makes them incur costs that are directed towards legal and lobbying activities so that they can defend their activities against local government policies and taxi organizations when they engage in new markets.