Uber Case Study | Success Story, and SWOT Analysis

Uber is a ride-hailing company that provides the Uber mobile app, which an individual may use to submit a trip request that is automatically delivered to a nearby Uber driver, alerting them about the status of the location. The Uber driver who accepts your request will then arrive and pick you up and bring you to your desired location.

Here’s everything you need to know about Uber, including how it’s reshaping the market and the story behind its success.

About Uber

Uber Technologies, Inc. (Uber) is a mobility-as-a-service company founded in the United States. It is headquartered in San Francisco and operates in more than 72 countries and 10,500 cities.

Its services include ride-hailing, food delivery (through Uber Eats and Postmates), package delivery, couriers, freight transportation, electric bicycle and motorized scooter rental (via Lime), and ferry transportation (via local operators).

Uber provides a wide range of transportation services. UberX is the company’s well-known service. The company also provides UberXL, Uber Comfort, and Uber Black services.

UberXLs are SUV-style vehicles that can hold up to 6 passengers. Uber Black is the company’s high-end offering. Uber Black drivers must have a high rating and drive more upscale vehicles than UberX and UberXL drivers. Uber Comfort ensures a car that is newer and has extra leg room.

Customers have freedom when it comes to selecting a ride because of the many possibilities.

Brief History

• Garrett Camp, a computer programmer and co-founder of StumbleUpon, and Travis Kalanick, who sold his Red Swoosh firm for $19 million in 2007, established Uber as Ubercab in 2009.
• Ryan Graves became the first Uber employee in February 2010 after replying to a job post on Twitter. Graves began as general manager and was promoted to CEO shortly after the company’s inception.
• Kalanick took over as CEO in December 2010. Graves was appointed to the position of Chief Operating Officer (COO) and held 31.9 million shares as of 2019.
• Uber’s services and mobile app were officially introduced in San Francisco in 2011 after a trial launch in May 2010.
• In 2011, the company changed its name from UberCab to Uber.
• Uber launched a service in Chicago in April 2012, allowing users to request a regular taxi or an Uber driver via its mobile app, and also launched Uber; a cheaper option that enabled drivers to use non-luxury vehicles, including their own cars, subject to a background check, insurance, registration, and vehicle standards.
• Uber was selected as tech company of the year by USA Today in December 2013.
• In August 2014, Uber launched Uber Eats.
• In December 2016, Uber paid for the acquisition of the AI research startup geometric intelligence.
• Uber bought Ottomotto, a self-driving truck business, in 2016 and then shut down its self-driving truck project in July 2018.
• Uber and Yandex integrated their businesses in Russia, Armenia, Azerbaijan, Belarus, Georgia, and Kazakhstan in February 2018 and became a gold member of the Linux Foundation.
• COO Barney Harford and CMO Rebecca Messina both departed in June 2019, and the marketing department was cut by one-third.
• Uber launched 8-minute helicopter trips between Manhattan and John F. Kennedy International Airport in October 2019 in collaboration with HeliFlight.
• In 2020 Uber revealed plans to become a zero-emission platform. Uber Green was released, encouraging consumers to pick electric or hybrid vehicles.
• Drizly, an alcohol delivery service, was acquired by Uber in October 2021.
• Uber and Waymo reached an agreement in June 2022 to employ the latter’s technology in Uber’s Freight service for autonomous vehicles.

Success Story | Uber

Uber is a logistics company based in the United States that has changed the way people travel. Uber began as a dominant player in the ride-hailing sector but now expanded into food delivery, micro-mobility (bikes and scooters), and peer-to-peer ride-sharing.

Startup Story: Uber

Most individuals — even app designers — would need a little pause before moving on after seven years of highs and lows. Travis, on the other hand, continued to work for Akamai while also traveling widely and investing in numerous startups and enterprises.

In August 2008, he departed Akamai, and later that year, he was at the LeWeb conference alongside Gary Vaynerchuck, Garrett Camp, and Melody McCloskey. Garrett told Travis about an idea; lowering the price of black car services.

In a 2010 Uber blog post, Travis summarizes.

“By March of 2009, Garrett started working in earnest on figuring out what this iPhone app would look like. The prototype was coming along, but it was still a side project — Garrett had spun out StumbleUpon and was now CEO again. By mid-2009, Garrett began a charm offensive for ramping up my involvement and by that summer I joined as Uber’s Chief Incubator. My job was to temporarily run the company, get the product to prototype, find a General Manager to run the operation full time, and generally see Uber through its San Francisco launch. This approach seemed to fit pretty well. I wasn’t yet ready for a full-time gig — still recharging from a 10-year non-stop startup life in P2P technology — and we both thought the business was going to be pretty low-tech, mostly operational — Little did we know”

Uber — USP

To begin with, consumers no longer have to wait for their trips; instead, it is now a simple one-tap process. Users may also navigate their travel and make payments using the Uber app’s features. Certain features aid Uber in generating more revenue.

1. Car for Everyone

They provide options for everyone with sections like Uber X, Uber Black, Uber cab, and Uber SUV.

2. More Services Available

Uber is not restricted to simply cars. They’ve upped their game by including boats, helicopters, and other vehicles on their list. They operate a motorbike pickup service in Paris and a delivery service in San Francisco.

However, these possibilities are only available in certain geographical areas, which has forced them to add additional income sources to their company model.

3. Price Surge Technology

The expense of a trip fluctuates depending upon various factors such as demand, the number of drivers available, the number of requests made, and many more.

Growth Analysis of Uber | Market

With a market value of $73.07 billion in 2020, the ridesharing sector has evolved into a multibillion-dollar industry. The ridesharing business is expected to increase at a compound annual rate of 19.2 percent, bringing its market worth to $209.60 billion by 2026, according to new research on its development and trends.

Uber has retained its place as one of the leading companies in the fleet management software sector while operating in such a competitive market for over a decade.

1. Uber Revenue

Uber made $17.4 billion in revenue in 2021, a 56 percent raise over the previous year and higher revenue than in 2019. The coronavirus epidemic reduced Uber’s revenues by 21% in 2020.

2. Uber Revenue by Region

The United States and Canada continue to provide for the majority of Uber’s revenue, with the two nations accounting for $10 billion of the $17.4 billion in 2021.

3. Gross Bookings by Uber

In 2021, Uber recorded $90 billion in gross bookings, a 57 percent increase over the previous year.

4. Uber Users

In 2021, 118 million people used Uber, a 26 percent raise over 2020 and a 6 percent increase over 2019.

5. Uber Funding

Between 2011 and 2019, Uber got $20.9 billion in total from several investors, including Alphabet, Benchmark, and SoftBank Ventures.

Competitive Analysis Of Uber

Uber vs. Lyft

Like Uber, Lyft is a ride-sharing service that connects drivers and riders using an app.

Deloitte Fast 500 named the company the “fastest-growing technology startup in the United States” in 2013.

Lyft’s client experience is remarkably similar to Uber’s, from the minute consumers download the app to the time their car arrives at their location.

To begin, let’s consider the parallels between Uber and Lyft.

Despite how similar the apps are, there are some significant differences between Uber and Lyft. Let’s take a look at the key differences mentioned below.

Uber vs. Ola

The crucial difference between Uber and Ola is the services they provide. Uber provides services such as freight transportation, vehicle rental, courier, food delivery, and package delivery. On the other hand, ola offers services such as car rental, mobile payments, products, digital wallets, and food delivery.

Let’s understand a few main differences between Uber and Ola.

How does Uber Make Money?

Uber’s revenue is derived from commissions, which are the basis of its business model. The overall cost of each ride includes the driver’s pay, fees, taxes, and company commission. In general, the driver receives roughly 75% to 80% of the value, with the remaining amount going to Uber.

However, due to costs and a minimum fare, the commission might reach approximately 50% in the short run. However, this isn’t the company’s sole source of revenue.

• Uber gets money from promotional collaborations as well. These are marketing ads that run on the app multiple times throughout the ride (for example, the BMW 7 Series offered free trips in their new car to promote it). It’s also worth noting that Uber has been steadily extending its service offerings.
• Uber Eats is probably the most well-known, especially during the period of social isolation caused by the Covid-19 epidemic. It is a food delivery app that works the same way as a transportation app, connecting restaurants to customers via an internet platform and offering delivery through partner deliverers. In this example, there are three revenue streams: advertising, delivery fees, and revenue split with eateries.

Uber Eats is now competing with DoorDash and market leader Goldbelly by offering free nationwide distribution of popular gourmet meals from more than a dozen restaurants and food shops.

Uber Eats users in the United States will be able to order bagels, Cuban delicacies, macarons, and chimichurri sauces from famous merchants in Los Angeles, New York City, San Francisco, and Miami. According to an Uber Eats spokesman, shipping is free, and items are delivered by FedEx.

“People travel from around the world to taste the restaurants of NYC, LA, and Miami, so we’re excited to make their beloved restaurants accessible to the whole country, and expand to additional cities soon” — Luke Kelley-Chew, lead product manager

• The first step toward revolutionizing urban aviation and establishing the future of urban air mobility: Uber Copter. It is a premium transportation service that Uber provides in some areas of New York City to and from JFK International Airport.

If you’re in a rush and traveling from Lower Manhattan, Uber Copter is one of the most practical solutions to make your flight on schedule. However, the service may spread to other places around the United States in the coming years.

SWOT Analysis of Uber

Detailed swot analysis of Uber is presented below:

Strength

• Uber’s global reach makes it the most recognized brand in the sector since it operates in 85 countries.
• Uber is convenient since anyone with an internet connection or a smartphone can use it. The software is simple to use, allows for contact with drivers, accepts various payment options, and is typically less expensive than traditional taxis.
• The company employs many variables to decide the cost of a journey while also providing additional benefits to drivers.
• Uber’s operating structure is unique as it works without workers, allowing the firm to reinvest significantly more in the business and R&D.
• Uber is the most well-known brand in the sector, having been the first to begin and attracting a lot of media attention.

Weakness

• Uber has been entangled in several lawsuits that have harmed its image and reputation.
• The corporation has a history of disagreements with governments over taxi industry laws.
• Uber lacks internal rules to reduce the environmental impact.
• Since Uber is a private corporation, it is not required to turn public its finances, but the lack of transparency calls into question if they are spending on R&D (research and development) or other areas.
• Uber users are prone to thievery, abuse, and other safety hazards, just like any mode of transportation.

Opportunities

Growth: Uber has a tremendous chance to grow into new areas throughout the world.

Diversification: Although the company has already added food delivery to its services, it may still diversify its business and offerings by focusing on certain categories, such as transportation.

Drivers count: Whether due to the economic downturn or not, the firm has been able to recruit a large number of drivers. This expands the automobile selection, which pleases customers and boosts the number of frequent users.

Threats

The Number of alternatives: Uber’s development may be jeopardized by the high level and a growing number of competitors, making it impossible to grow as anticipated.

Market: Uber maintains low rates, resulting in minimal profitability. It has an 80% market share in Brazil, for example, yet it is still losing money there;

Policies: In many nations, governments may establish tight regulations that might risk Uber’s business.

Solutions

The following are some suggestions for Uber to improve its current situation:

• The business Model should extend its reach in other years, such as UberTour, UberFresh, and many more.
• For better client experience, the company should give validation proof of safety.
• Uber should keep its pricing consistent for riders in both rural and urban areas.

Future Plans | Uber

While Uber’s core business will remain ride-hailing for the foreseeable future, Dara Khosrowshahi envisions a world beyond automobiles as well. They intend to expand their vehicle fleet by adding buses and trains.

According to the reports, the trial project in Denver has already begun, and users will be able to view bus and rail schedules and buy tickets using the Uber app.

To sum up, the biggest strength of Uber’s business strategy is the fact that users rarely compare costs on their phones before booking a trip. Furthermore, Uber is putting forth extra effort to become long-term partners with cities.