Case study - Uber and the ridehailing, Ejercicios de Marketing

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I n t e r n a t i o n a l M a r k e t i n g Uber and the ride-hailing September 2020 Contents Char.............................................................................................................................................................2 Introduction.................................................................................................................................................3 Origins of Uber............................................................................................................................................4 Demographics of Uber ride-hailing..............................................................................................................5 Uber driver demographics.......................................................................................................................5 Uber’s ride demographics........................................................................................................................5 Strategic Canvas, Value Innovation, ERRC Grid & Blue Ocean Strategy.......................................................6 Conclusion...................................................................................................................................................9 Annotated Bibliography.............................................................................................................................10 Char Chart 1. Strategy Canvas of ride-hailing market..........................................................................................6 Chart 2 Strategy Canvas of ride-hailing market - ERRC................................................................................8 One of the reasons why Uber has quickly grown is due to their high rate of UberX drivers. Drivers prefer work with Uber because of their efficient driver-passenger matching technology, Uber’s larger scale (which supports faster matches), inefficient taxi regulations; and Uber’s flexible labor supply model and surge pricing, which more closely match supply with demand throughout the day. (Cramer & Krueger, 2016). However, this fast growth Uber has faced many problems around the world with the governments (Australia, Uk, Brazil, Australia, Mexico, Colombia, France, Egypt, China) and the taxi unions, their low security. As a result, numerous nations have taken actions, in India the app Uber and their competence Ola has been banded, in Paris Uber had to pay $1.3 million to taxis unions. Uber is still trying to improve their service and fix all this problem with the governments and taxi unions. The company wants to expand their business and move forward and try to develop the first fly taxi. Demographics of Uber ride-hailing The company Uber Technologies, Inc is present globally, one factor that helped to grow so quickly their business by ride-hailing in U.S. was their popularity between their ride and drivers. Uber currently has 75 million riders and 3 million drivers globally. Uber driver demographics Uber currently has 3 million drivers globally, In United States the driver that work with Uber are men (86%) with 30 (81%) years or older, and more than 50% of them are married. An ethnicity standpoint are very diverse, the biggest group are the white/Caucasian that represent the 37% of the driver, however 49% of the drivers is divided in Asians or Pacific Islanders, African Americans and Hispanics, more than 50% of them are married. [ CITATION Fel17 \l 9226 ] Uber’s ride demographics Uber currently has 75 million riders globally, in a gender standpoint male(52%) and female (48%) has almost used the same time, the millennials (16-24) and young adult (26-34) that live in the urban areas are their largest group (80%), with and income of 25% or superior[ CITATION Fel17 \l 9226 ], are the ones that use the app recurrently, in a survey conducted by Statista determine that 25% of the users use Uber at least once per month. Strategic Canvas, Value Innovation, ERRC Grid & Blue Ocean Strategy The following charts and table take an analytical look at the Uber ride-hailing market versus two of the competitors, Didi and Lyft, comparing the companies on their different attributes. Chart 1. Strategy Canvas of ride-hailing market The “chart 1.” Is a strategic canvas of Uber versus its two competitors in their largest market of ride- hailing? This chart help to compared and know what the most important attributes are in each one of these competitors.  Price: Uber is 12,5 % cheaper than Lyft and 60% more expensive than Didi.  Security: Uber is the safest digital service against Didi and Lyft.  App capabilities: Uber is the company that has more capabilities.  Distance: Uber is the app that can cover more distance (km) because of their expansions.  Drivers: Uber with 3 million of driver and Lyft 2 million of driver  Poor Conditions vehicle: Uber and Lyft are the ones which present a better condition in their vehicles, but Didi in order to achieve their goal to have low cost and a lot driver has more poor condition than their competitors.  Riders: Uber has 75 million o user, this is a big amount, however Didi with around 540 million of drivers around the world.  Promotion: Uber and Didi are very recognize because of their discount and promotion.  Driver revenue: The companies pay to their drivers very similar percentage. With the “chart 1.” We can also analyze what opportunities exist in finding Blue Oceans. The Blue Ocean referred to a market of a product where there is no competition or very less competition. In order to that the ERRC Grid in the Table 1 will show us the attributes that Uber to help us to create a product offering that correspond to a Blue Ocean. Table 1ERRC Grid- Uber ERRC Grid - Uber Eliminate Raise Poor Conditions vehicle: This Type of vehicles generate a poor-quality image for the company, which causes customers lost. Drivers revenue: By raising the percentage that the company pay to the driver will catch the attention of more drivers, which could reduce the wait time of the rider and generate more revenue to the company. Reduce Create App capabilities: By reducing this, Uber can also reduce their cost and have more revenue. Disruptive Innovation: While many companies are thinking in how to get customers now, few companies are thinking about the future of the transport due to that Uber is developing the first flying taxi. Changing the attributes of Uber Digital service in their ride-hailing business allows the company to create a Blue Ocean for its services. In the ERRC Grid (table 1) show us that one of the disadvantages of Uber is the poor conditions’ vehicle in a large number of drivers, this generates low quality service and lost of customer. This table also show that one the opportunities to growth is to continue in the market by a disruptive innovation, that allows the company to be one step ahead against their competitors. Using this information, we can see in the following graph (graph 2) what the future would be for the company taking advantage of the opportunities. Annotated Bibliography 1. Cramer, J., & Krueger, A. B. (2016). Disruptive Change in the Taxi Business: The Case of Uber. The American Economic Review, 106(5), 177. http://www.jstor.org/stable/43861010. This is a case writen by Judd Carmer and Alan B. Kruger in 2016 where they explain how uber it si working and some the issues that the company has. 2. García PhD, J. D. (2019). Uber (company). In Salem Press Encyclopedia. http://search.ebscohost.com/login.aspx?direct=true&db=ers&AN=113931086&site=eds-live This is a Document written by García where he explains the story of Uber, how they rapid growth and the issues that the company has with some cities, nations and taxi unios around the world. 2. Nicholls, I. N.(Director). (2019). The Uber Story [Documentary]. recovered from: “https://www.primevideo.com/”. This is a documentary directed by Nicholls where the autor wanted to show how Uber operaterate around the world and how they use some sofware to take advantage againts their competitors. 3. Heul, I. N.. (2019). Blue Ocean Startegy [Video]. recovered from: “https://www.youtube.com/watch?v=8cVS7YEW2Fk&t=273s”. This a tutorial form youtube to develop the canvas strategy , blue ocean errc , which I followed to develop my case assgiment. 5. Felim, M. (2017, August 16). Globalwedindex. Retrieved from The Demographics of Uber’s US Users: 2017 CITATION Fel17 \l 9226 : , (Felim, 2017), CITATION Fel17 \l 9226 : , (Felim, 2017), This is a webside where I cuold get the information to develop the demographics of Uber in United States.