uber digital marketing case study

Uber Marketing Strategy 2024: A Case Study

Uber, the prominent player in the ride-hailing industry, has captured the attention of millions with its extensive transportation and delivery services. In this case study, we will delve into Uber’s marketing strategies for 2024, providing insights into their approach to ride-sharing dominance and user experience.

Key Takeaways:

• Uber operates in over 72 countries, serving more than 110 million monthly active users
• The company generated $32 billion in revenue in 2022, marking an 82% increase from the previous year
• Successful social media campaigns and contests, like the #WhyIRide campaign, have contributed to Uber’s viral marketing
• Collaborations with social media influencers, celebrities, and organizations strengthen Uber’s brand image
• Incentives and discounts, such as referral programs and loyalty schemes, attract and retain customers

Brand Positioning and Global Expansion

In the highly competitive ride-sharing industry, Uber has successfully positioned itself as a leading brand through its global expansion efforts. With operations in over 72 countries and serving more than 110 million monthly active users, Uber has established a strong presence worldwide.

To build brand awareness and loyalty, Uber implements a comprehensive marketing strategy that effectively utilizes social media platforms such as Instagram, Facebook, and YouTube. By leveraging these platforms, Uber showcases real-life experiences, testimonials, and engaging content to connect with their target audience and strengthen their brand image.

Uber also strategically partners with social media influencers, celebrities, and organizations to enhance its brand positioning. Collaborating with influential figures and reputable organizations helps Uber reach wider audiences and cultivates a positive brand perception among consumers.

In addition to social media marketing , Uber offers various incentives and discounts to attract and retain customers. These include referral programs, loyalty schemes, and promotional campaigns. By providing these incentives, Uber not only encourages customer acquisition but also fosters customer loyalty, which is vital for long-term success.

Furthermore, Uber collaborates with local businesses, sponsors, and events to provide convenient and affordable riding options. Integrating its ride-hailing services into popular food delivery apps and partnering with renowned fitness studios for discounted rides to and from classes enhances the overall user experience and expands Uber’s user base.

As Uber continues to expand into new markets and segments such as Uber Eats and Uber Health, the company demonstrates its commitment to meeting diverse user needs and extending its brand reach.

Furthermore, Uber’s focus on continuous innovation, regulatory compliance, and customer satisfaction ensures the company’s future growth and success. By investing in customer feedback, providing 24/7 support, and implementing necessary improvements, Uber strives to deliver an exceptional user experience and maintain high customer satisfaction levels.

In conclusion, through brand positioning and global expansion efforts, Uber has established itself as a dominant player in the ride-sharing industry. By effectively utilizing social media platforms, strategic partnerships, and attractive incentives, Uber has built a strong and recognizable brand, catering to customers’ needs while continuously expanding its market presence.

Market Segmentation and Competitive Analysis

In order to stay ahead in the highly competitive ride-sharing industry, Uber recognizes the importance of market segmentation and conducts thorough competitive analysis. By segmenting their target audience based on demographics, preferences, and needs, Uber is able to tailor their marketing efforts and provide personalized experiences to their customers. This strategic approach allows Uber to effectively target different consumer groups and cater to their specific requirements.

Uber’s market segmentation strategy enables them to identify and understand the diverse needs of their customer base. By analyzing data on customer preferences, habits, and interests, Uber can create targeted marketing campaigns that resonate with different segments of their audience. For example, in urban areas where ridesharing is prevalent, Uber can focus on convenience and accessibility. In contrast, in suburban areas, Uber can emphasize reliability and affordability.

Additionally, Uber conducts comprehensive competitive analysis to gain insights into the strategies and tactics employed by its rivals. This analysis helps Uber identify their competitors’ strengths and weaknesses, enabling them to refine their own marketing strategies and gain a competitive advantage. By understanding the competitive landscape, Uber can leverage its strengths and capitalize on market opportunities, while also addressing any potential threats.

Competitive analysis allows Uber to benchmark their performance against that of their competitors. By closely monitoring the market, Uber can identify emerging trends and shifts in consumer behavior. This knowledge enables Uber to adapt their marketing strategies in real-time, ensuring they remain at the forefront of the industry.

The table below provides an overview of key statistics related to market segmentation and competitive analysis in the ride-sharing industry:

Customer Segmentation

One of the key aspects of market segmentation for Uber is understanding the different customer segments they serve. By identifying and analyzing different segments, Uber can tailor their marketing strategies to effectively target each group’s specific needs and preferences. This includes factors such as age, gender, location, and usage patterns.

Uber’s Behavioral Segmentation indicates that it is the most downloaded travel app for iOS and Android, with a high level of customer loyalty and retention. This suggests that Uber has successfully implemented strategies to appeal to a wide range of customers.

Competitive Analysis

In a highly competitive market, Uber faces competition from companies such as Lyft and DiDi. Conducting competitive analysis allows Uber to gain insights into the strategies employed by their rivals. For example, Lyft generated revenue of $3.2 billion in 2021, showcasing the intense competition between the two companies in the ride-sharing market. Additionally, DiDi, Uber’s main competitor in China, holds a global market share of 32.4%, making it a significant player in the industry.

By analyzing their competitors’ strategies, Uber can identify areas where they can improve and stay ahead in the market. This analysis helps Uber identify emerging trends, customer preferences, and potential opportunities for growth.

Overall, Uber’s market segmentation and competitive analysis strategies play a crucial role in shaping their marketing efforts. By understanding their target audience and analyzing their competitors, Uber can effectively position themselves in the market and stay ahead of the competition.

Digital Marketing and Customer Acquisition

Digital marketing plays a crucial role in Uber’s customer acquisition efforts. With a user base of more than 110 million monthly active users globally, Uber utilizes various digital marketing techniques to reach its target audience and drive customer acquisition.

One key aspect of Uber’s digital marketing strategy is its presence on social media platforms. The company leverages platforms like Instagram, Facebook, and YouTube to create brand awareness, engage with users, and showcase its services. By sharing compelling content and engaging with followers, Uber builds a strong online presence and fosters a sense of community among its customers. The company strategically partners with social media influencers, celebrities, and organizations to enhance its brand image and reach new audiences.

Furthermore, Uber offers a range of incentives to attract and retain customers. The company’s referral program encourages existing users to refer friends and family, providing incentives such as discounted rides or credits for both the referrer and the new user. This approach not only drives customer acquisition but also helps to foster loyalty and generate organic word-of-mouth marketing.

To maintain a competitive edge, Uber also collaborates with local businesses, sponsors, and events to provide affordable riding options and increase brand visibility. By partnering with popular local establishments and sponsoring events, Uber expands its reach and offers unique experiences to its customers.

Customer Acquisition through Digital Marketing

Uber’s digital marketing efforts go beyond social media. The company utilizes email campaigns and targeted ads to reach potential customers. By personalizing messaging based on user preferences and behavior, Uber can effectively engage with its audience and drive customer acquisition.

Additionally, Uber invests heavily in customer feedback. The company provides multiple channels for customer support, ensuring that users can reach out for assistance 24/7. Uber also values user feedback, offering incentives and rewards to encourage customers to share their thoughts and experiences. By actively listening to its customers and making necessary improvements based on feedback, Uber enhances its services and attracts new users.

The Future of Customer Acquisition

As the transportation and delivery industry continue to evolve, entrepreneurs are increasingly interested in developing Uber-like apps to enter the market. With the rise of on-demand services, the potential for customer acquisition in this sector remains high. Uber’s success serves as inspiration for other businesses looking to tap into the growing demand for convenient transportation and delivery services.

However, Uber also faces significant challenges in its customer acquisition efforts. Legal challenges, regulatory hurdles, competition from companies like Lyft and Didi Chuxing, and concerns regarding safety can pose obstacles to Uber’s operations and growth. The company must navigate these challenges while continuing to invest in marketing efforts that promote its services and drive customer acquisition.

In conclusion, digital marketing plays a pivotal role in Uber’s customer acquisition strategy. By leveraging social media, offering incentives, partnering with local businesses, and investing in customer feedback, Uber effectively reaches its target audience and drives customer acquisition. As the market evolves and competition grows, Uber’s commitment to digital marketing will be vital in maintaining its position as a leader in the ride-sharing industry.

Rideshare Industry Trends

In an ever-evolving and competitive rideshare industry, staying ahead of trends is essential for success. Uber, with its strong market presence and commitment to innovation, continuously monitors industry trends and adapts its marketing strategies to meet the changing needs of consumers.*

Advancements in automotive technology play a significant role in shaping the future of rideshare services. Uber recognizes the importance of keeping up with these trends to provide a seamless and efficient user experience. Whether it’s exploring autonomous driving or integrating electric vehicles into their fleet, Uber is at the forefront of embracing new technologies that enhance safety, sustainability, and overall customer satisfaction.

Additionally, Uber has expanded its service offerings beyond transportation. The launch of Uber Eats, Uber Health, Uber Freight, and Uber Air demonstrates the company’s agility in catering to diverse market segments . By recognizing the demands of customers in various industries and markets, Uber has successfully positioned itself as a multifaceted platform for both transportation and delivery services.

Rideshare industry trends also encompass the rise of non-emergency medical transportation and food delivery services. Uber’s strategic entry into these sectors further highlights their commitment to meeting evolving customer needs. By leveraging their existing infrastructure and vast network, Uber extends its reach and establishes a presence in adjacent industries.

Partnerships and Collaborations

Beyond technological advancements, partnerships and collaborations are crucial in shaping the rideshare industry. Uber’s marketing strategy includes forming alliances with local businesses, sponsors, and events to provide convenient and affordable riding options for customers. By creating synergies with other brands and organizations, Uber delivers value-added experiences that go beyond basic transportation services.

Moreover, the battle for rideshare dominance between Uber and Lyft reflects in their branding efforts and marketing strategies. Both companies have undergone major rebrands to shape their brand perception and appeal to their respective target audiences. Lyft’s iconic pink mustache, later replaced by the “Amp” device, represents its commitment to providing a friendly and approachable carpool experience, particularly targeting younger generations. On the other hand, Uber’s focus on its name, the “U,” and the color black evokes a sense of luxury and exclusivity.

The Future of Rideshare

As the rideshare industry continues to evolve, consumers can expect to see Uber and Lyft expanding into new means of transportation like subway and sky transport. Venturing beyond ride-sharing, these companies aim to provide comprehensive mobility solutions that encompass various modes of travel. Additionally, the potential for partnerships with other industries and the integration of new technologies further indicate the extensive growth opportunities and evolving landscape of the rideshare industry.

As shown by the market share data, Uber and Lyft dominate the ground transportation industry, outperforming traditional options like rental cars and taxis.* This significant market share is a testament to the popularity and widespread adoption of rideshare services.

The battle between Uber and Lyft shapes the perception and strategies within the rideshare industry.*

User Experience Optimization

Uber understands the importance of prioritizing user experience optimization to provide a seamless and convenient service to its customers. By investing in customer feedback and services, Uber ensures that it continuously improves and meets user expectations. The introduction of the Consumer Communication Gateway (CCG) has allowed Uber to deliver more personalized and optimized push notifications to its users, enhancing their overall experience.

The optimization framework used by Uber takes into account potential combinations of push notifications and delivery times over a fixed time horizon. This framework resolves the factorial growth in the number of possible schedules, allowing Uber to effectively manage and streamline its push notification strategy. The linear program formulation encodes various business logic constraints, such as push expiration time, daily frequency cap, and minimum time difference between notifications, ensuring that users receive timely and relevant notifications.

Uber utilizes advanced machine learning models, like the XGBoost model, to predict user order conversion probabilities. These models consider various features such as time, push category, user history, and engagement to accurately forecast conversion rates. The high predictive power of these models is reflected in the higher predicted conversion rates corresponding to higher true conversion rates, enabling Uber to optimize its push notification campaigns.

Uber’s Push Intelligence system consists of various components, including the Persistor, Schedule Generator, Scheduler, and Push Delivery. These components work together to ensure the efficient and fault-tolerant delivery of push notifications to users. With the system designed to handle tens of thousands of triggers per second, Uber can effectively reach its users and provide them with timely information.

Reduced Opt-outs and Improved Relevance

Initial results from early experiments reveal promising outcomes, demonstrating a reduction in opt-outs and increased relevance of the notifications. This indicates a positive impact of the new user experience optimization system implemented by Uber. By delivering more personalized and targeted notifications, Uber has successfully engaged users and increased their satisfaction with the app.

Looking to the future, Uber plans to continue improving its core models and expanding across various channels like email. The aim is to extend the intelligence gained from user experience optimization to other Uber platforms, such as the Uber (Rides) app and Postmates. By doing so, Uber seeks to enhance the user experience across all its services, providing a seamless and convenient experience to its global user base.

To maintain efficient and fault-tolerant delivery of push notifications, Uber’s user experience optimization system is designed to handle tens of thousands of triggers per second. This ensures that users receive notifications in a timely manner, enhancing their overall experience with the app.

The Future of Uber

Uber is a pioneering force in the ride-hailing industry, and the future looks bright as the company continues to innovate and expand its services. With operations in over 72 countries and serving more than 110 million monthly active users, Uber has solidified its position as a leader in the market.

Looking ahead, Uber is committed to exploring new markets and segments to provide more transportation options to its customers. The company has already expanded its services beyond ride-hailing with the launch of Uber Eats, Uber Health, Uber Freight, and Uber Air. These ventures allow Uber to tap into new opportunities and cater to different verticals.

One exciting aspect of the future of Uber is the potential inclusion of various modes of transportation. In addition to cars, users may have the option to choose bikes, motorbikes, and even flying taxis for their transportation needs. This expansion will not only offer more convenience and flexibility to customers, but also contribute to reducing traffic congestion and carbon emissions.

Uber’s marketing approach has been a key driver of its success, extending beyond ride-hailing to provide solutions for various industries and markets. By addressing different verticals, Uber aims to tap into new avenues for growth and expansion. This strategy, coupled with a user-friendly application interface and consistent marketing efforts, has enabled Uber to retain existing users and attract new ones.

Another crucial element of Uber’s future success is its commitment to user feedback and customer support. The company invests in 24/7 customer support to ensure a seamless experience for riders and drivers. User inputs and feedback are vital in improving the overall service and addressing any issues that may arise.

Furthermore, Uber’s partnerships with local businesses, sponsorship of events, and promotions for rides to popular destinations are all aimed at enhancing the overall customer experience. By engaging with the community and providing exclusive offers, Uber fosters stronger relationships with its users and builds brand loyalty .

In conclusion, the future of Uber is marked by continued innovation, expansion into new markets, and the integration of various modes of transportation. With a focus on customer satisfaction, cutting-edge technology, and strategic marketing efforts, Uber is well-equipped to maintain its position as a leader in the ride-hailing industry.

Social Media Marketing

Social media marketing plays a vital role in Uber’s overall marketing strategy. With the aim of enhancing brand awareness, fostering customer loyalty, and driving user engagement, Uber strategically leverages various social media platforms.

Uber actively engages with users on popular social media platforms such as Instagram, Facebook, and YouTube. Through these channels, the company shares engaging and informative content that resonates with its target audience. By utilizing visually appealing images and videos, Uber effectively captures the attention of users, showcasing the unique experiences and convenience it offers.

In addition to content creation, Uber also actively responds to user feedback and concerns on social media platforms. By addressing customer queries and issues in a timely and transparent manner, Uber builds trust and demonstrates its commitment to ensuring a positive user experience.

To further enhance its social media presence, Uber runs campaigns and contests to encourage user-generated content. These initiatives not only drive engagement but also help in creating a sense of community among users. By involving their audience in their marketing efforts, Uber fosters a deeper connection with its customers.

Furthermore, Uber strategically partners with influencers, organizations, and high-profile events to expand its reach and engage with a wider audience. Collaborating with influencers helps Uber tap into their followers and benefit from their credibility and influence. By associating with organizations and participating in events like CES, Uber showcases its innovative and cutting-edge services, generating buzz and attracting attention from high-status individuals.

Overall, Uber’s social media marketing strategy is characterized by a customer-centric approach. By leveraging social media platforms, engaging users through captivating content and campaigns, and actively responding to feedback, Uber strengthens its brand presence, fosters customer loyalty, and drives user engagement.

Incentives and Discounts

Uber’s success can be attributed to its effective use of incentives and discounts to attract and retain customers. As part of its marketing strategy, Uber understands the value of providing attractive incentives to encourage customer engagement and loyalty.

One of the key incentives offered by Uber is its referral program. This program encourages existing users to refer friends and family to the platform by offering discounts or free rides to both the referrer and the referred. This creates a win-win situation, where both parties benefit from the referral.

In addition to the referral program, Uber also leverages discounts and promotional codes to entice new customers to try their services. These discounts can include discounted fares for first-time riders or limited-time promotions during holidays or special events. By providing these discounts, Uber aims to attract new customers and showcase the value of their service.

Furthermore, Uber strategically partners with local businesses, sponsors, and events to provide convenient and affordable riding options for its customers. Collaborating with food delivery apps or fitness studios, for example, allows Uber to offer discounted rides to and from these establishments, promoting a healthy and active lifestyle while enhancing the overall customer experience.

Uber’s use of incentives and discounts is not only limited to customer acquisition but also plays a vital role in customer retention. By implementing loyalty programs and offering rewards to frequent riders, Uber encourages customer loyalty and incentivizes riders to continue using their service.

Overall, Uber recognizes the importance of incentives and discounts in attracting and retaining customers. By offering these benefits, Uber not only generates more revenue but also establishes itself as a leading player in the transportation industry, continually improving its brand image and enhancing the overall customer experience.

Partnerships and Sponsorships

Uber understands the importance of collaboration and strategic alliances to enhance its services and provide added value to its customers. Through partnerships with local businesses, Uber offers exclusive discounts, promotions, and convenient riding options to users in various cities and countries. By working together with event organizers and sponsors, Uber actively promotes its services during major events, such as concerts and festivals, ensuring a seamless and enjoyable experience for attendees.

In addition to offering discounts and promotions through partnerships, Uber also runs referral programs where both the referrer and the new user receive discounts on rides. This incentivizes existing users to refer their friends and family to the platform, expanding Uber’s customer base and fostering customer loyalty.

Furthermore, Uber recognizes the importance of rewarding its loyal customers. The company offers loyalty programs, promotional codes for discounted rides, and collaborates with various brands to provide additional rewards and exclusive discounts. These partnerships not only benefit Uber users by offering them more value for their money but also enhance Uber’s brand image by aligning with reputable companies and providing a wide range of options and benefits.

Customer Service and Feedback

At Uber, we prioritize providing exceptional customer service and valuing user feedback. We understand the importance of promptly addressing our customers’ concerns and ensuring their satisfaction with our services.

To achieve this, we have invested in a comprehensive customer support system that operates 24/7. Our dedicated team is available via multiple channels, including phone calls, emails, chats, and social media platforms. You can reach out to us at any time, and we will assist you with any inquiries, issues, or feedback you may have.

As part of our commitment to enhancing the Uber experience, we actively encourage and value user feedback. We believe that our customers’ perspectives are invaluable in helping us improve our services. Whether it’s positive reviews, suggestions for improvement, or highlighting areas of concern, we carefully listen and act on your feedback.

We have implemented various mechanisms to collect feedback from both drivers and riders. These include in-app rating systems, surveys, and direct communication channels. By actively engaging with our customers, we gain valuable insights that drive our decision-making and enable us to make necessary enhancements to our platform.

Our user-centric approach also extends to our drivers. We believe that happy and satisfied drivers lead to better experiences for our riders. Therefore, we offer incentives and rewards to our drivers to recognize their contributions and retain their commitment to delivering exceptional service.

By providing exceptional customer service and incorporating user feedback into our decision-making, we strive to continuously improve our products and services. At Uber, your satisfaction is our top priority.

Customer Service Channels:

To reach our customer support team, you can use any of the following channels:

• Phone calls
• Social media platforms

User Feedback:

We welcome and value your feedback, whether it’s about your ride experience, app usability, or any suggestions for improvement. You can provide feedback through:

• In-app rating and feedback systems
• Direct communication channels

In conclusion, Uber’s marketing strategy for 2024 is a well-rounded approach that encompasses various elements, including understanding their business model, utilizing technology, leveraging word-of-mouth marketing, forming strategic partnerships, and implementing effective crisis management. These efforts have contributed to Uber’s immense success in the ride-sharing industry.

Uber’s business model centers around connecting riders with drivers through a technology-based platform, offering seamless ride booking, transparent pricing, and real-time tracking to enhance user experience. The use of user-friendly app interfaces, electronic payment systems, and efficient matching algorithms further solidifies Uber’s position as a leader in the industry.

Moreover, Uber’s unique value proposition, which includes reliability, convenience, and affordability, has resonated with millions of users worldwide. The company’s embrace of word-of-mouth marketing, social media engagement, and successful referral programs has also fueled its rapid growth.

Through strategic partnerships with local businesses, Uber has expanded its reach and improved its service offerings, providing customers with a seamless and convenient experience. By leveraging digital marketing and social media platforms, Uber has successfully acquired and retained customers, while their commitment to continuous innovation keeps them ahead of the curve in an ever-evolving industry.

What is Uber’s marketing strategy for 2024?

How does uber position its brand and expand globally, how does uber segment its target audience and analyze competitors, what digital marketing techniques does uber use for customer acquisition, how does uber stay up to date with rideshare industry trends, how does uber optimize user experience, what does the future of uber look like, how does uber utilize social media marketing, what incentives and discounts does uber offer, how does uber collaborate through partnerships and sponsorships, how does uber prioritize customer service and feedback, related posts:.

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Nina Sheridan is a seasoned author at Latterly.org, a blog renowned for its insightful exploration of the increasingly interconnected worlds of business, technology, and lifestyle. With a keen eye for the dynamic interplay between these sectors, Nina brings a wealth of knowledge and experience to her writing. Her expertise lies in dissecting complex topics and presenting them in an accessible, engaging manner that resonates with a diverse audience.

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Uber in 2024: From Industry Disruption to Creating Value For All Stakeholders

Dara Khosrowshahi became the CEO of Uber in August 2017, following internal turbulence and serious headwinds related to the company’s governance and reputation. Five short years later, Uber was clearly back on course, building on the success of its technology platform to reach 150 million monthly active platform users—and a market cap of $125 billion by the end of 2023.

This case study traces the remarkable transformation of Uber from its early innovation as a ride-hailing pioneer in a handful of cities, to the global expansion of Uber mobility services that required close attention to local operational and regulatory practices, to solving the complex technical challenges to drive Uber’s food delivery services forward. Interviews with Uber leadership reveals the strategic approach to work on the engineering, data science, product management, and product design challenges involved in building and maintaining a customer-friendly app and create an optimized user experience—and scale this on a global basis while factoring in local conditions and practices.

Key to this success was a culture reboot within Uber, and a renewed focus on collaboration and value creation for all stakeholders. The company that had found its initial footing by disrupting and transforming the taxi industry, more than a decade earlier, now faced a future where artificial intelligence and autonomous vehicles would likely disrupt the mobility sector once again—but Uber was preparing intensively for what the future might bring.

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Uber’s Strategy for Global Success

How can Uber adapt its business model to compete in unique global markets?

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As Uber entered unique regional markets around the world – from New York to Shanghai, it has adapted its business model to comply with regulations and compete locally. As the transportation landscape evolves, how can Uber adapt its business model to stay competitive in the long term?

Harvard Business School assistant professor Alexander MacKay describes Uber’s global market strategy and responses by regulators and local competitors in his case, “ Uber: Competing Globally .”

HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.

BRIAN KENNY: The theory of disruptive innovation was first coined by Harvard Business School professor Clayton Christensen in his 1997 book, The Innovator’s Dilemma . The theory explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, and affordability where complication and high cost are the status quo. Think Netflix disrupting the video rental space. Over the years, the term has been applied liberally and not always correctly to other examples, but every so often, an idea comes along that really fits the bill. Enter Uber, the ridesharing behemoth that turned the car service industry on its head. In a few short years after launching in 2010, Uber became the largest car service in the world, as measured in ride count. Last year, Uber drove 6.2 billion riders. Today’s case takes us to London in 2019, where Uber is facing the latest in a long list of challenges from regulators threatening their ability to continue operating in that important market. In this episode of Cold Call , we welcome Alexander MacKay to discuss the case entitled, “Uber: Competing Globally.” I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Presents network.

Alexander MacKay is in the strategy unit at Harvard Business School. His research focuses on matters of competition, including pricing, demand, and market structure. Alex, thanks for joining us on Cold Call today.

ALEX MACKAY: Thank you, Brian. Very happy to be here.

BRIAN KENNY: The idea of Uber seems so simple, but it was revolutionary in so many ways. And Uber has been in the headlines many times for both good and bad reasons in its decade of existence. So we’re going to touch on a lot of those things today. So thanks for sharing the case with us.

ALEX MACKAY: Brian, I’m very happy to. It’s a little funny, we’ve actually started to see the first few students who have never hailed a traditional taxi in our classrooms. So I think increasingly, the contrast between the two is going to be pretty difficult for people to fully understand.

BRIAN KENNY: Let me ask you to start by telling us what your cold call would be when you set up the class here.

ALEX MACKAY: The case starts off with the current legal battle going on in London. And so the first question I just ask to start the classroom is: What’s the end game for Uber in London? What do they look like 10 years from now? In the midst of this ongoing legal battle, there has been back and forth, some give and take from both sides, Transportation for London, and also on the Uber side as well. And there’s actually a recent court case that has allowed Uber to have a little more time to operate. They bought about 18 more months of time, but this has been also brought with additional, stricter scrutiny, and 18 months from now, they’re going to be at it again trying to figure out exactly what rules Uber’s allowed to operate under.

BRIAN KENNY: It seems like 18 months in the lifetime of Uber is like a decade. Everything seems to happen so quickly for this company. That’s a long period of time. What made you decide to write this case? How does it relate to the work that you’re doing in your research?

ALEX MACKAY: A big focus of my research is on competition policy, particularly the realms of antitrust and regulation. And here we have a company, Uber, whose relationship with regulation has been really essential to its strategy from day one. And I think appreciating the effects of regulation and how its impact Uber’s performance in different markets, is really critical for understanding strategy and global strategy broadly.

BRIAN KENNY:  Let’s just talk a little bit about Uber. I think people are familiar with it, but they may not be familiar with just how large they are in this space. And the space that they’ve sort of created has also blown up and expanded in many ways. So how big is Uber? Like what’s the landscape of ridesharing look like and where does Uber sit in that landscape?

ALEX MACKAY: Uber globally is the biggest ridesharing company. In 2018, they had over $10 billion in revenue for both ridesharing and their Uber Eats platform. And you mentioned in the introduction, that they had over 6 billion rides in 2019. That’s greater than 15 million rides every day that’s happening on their platform. So really, just an enormous company.

BRIAN KENNY: So they started back in 2010. It’s been kind of an amazing decade of growth for them. How do you explain that kind of rapid expansion?

ALEX MACKAY: They were financed early on with some angel investors. I think Kalanick’s background really helped there to get some early funding. But one of the critical things that allowed them to expand early into many markets that helped their growth was they’re a relatively asset light company. On the ground, they certainly need sales teams, they need translation work to move into different markets, but because the main asset they were providing in these different markets was software, and drivers were bringing their own cars and riders were bringing their own phones, the key pieces of hardware that you need to operate this market, they really didn’t have to invest a ton of capital. In fact, when they launched in Paris, they launched as sort of a prototype, just to show, “Hey, we can do this in Paris without too much difficulty,” as their first international market. So being able to really scale it across different markets really allowed them to grow. I think by 2015, their market cap was $60 billion, five years after founding, which is just an incredible rate of growth.

BRIAN KENNY: So they’re the biggest car service in the world, but they don’t own any cars. Like what business are they really in, I guess is the question?

ALEX MACKAY: They’re certainly in the business of matching riders to drivers. They’ve been able to do this in a way that doesn’t require them to own cars, just through the use of technology. And so what they’re doing, and this is I think pretty well understood, is that they’re using existing capital, people who have cars that may be going unused, personal cars, and Uber is able to use that and deploy that to give riding services to different customers. Whereas in the traditional taxi model, you could have taxis that you didn’t necessarily own, but you leased them or you rented them, but they had the express purpose of being driven for taxi services. And so it wasn’t using idle capital. You kind of had to create additional capital in order to provide the services.

BRIAN KENNY: So you mentioned Travis Kalanick a little bit earlier, but he was one of the co-founders of the company, and the case goes a little bit into his philosophy of what expansion into new markets should look like. Can you talk a little bit about that?

ALEX MACKAY: Certainly. Yeah. And I think it might even be helpful to talk a bit about his background, which I think provides a little more context before Uber. He dropped out of UCLA to work on his first company, Scour, and that was a peer-to-peer file sharing service, a lot like Napster, and actually predated Napster. And where he was operating was sort of an evolving legal gray area. Eventually, Scour got sued for $250 billion by a collection of entertainment companies and had to file for bankruptcy.

BRIAN KENNY: Wow.

ALEX MACKAY: He followed that up with his next venture, Red Swoosh, and that was software aimed at allowing users to share network bandwidth. So again, it was a little bit ahead of its time, making use of recent advances in technology. Early on though, they got in trouble with the IRS. They weren’t withholding taxes, and there were some other issues with his co-founder, and there was sort of a bad breakup between the two. Despite this, he persevered and ended up selling the company for $23 million in 2007. And after that, his next big thing was Uber. So one thing I just want to point out is that at all three of these companies, he was looking to do something that leveraged new technology to change the world. And by nature, sometimes businesses like that operate in a legal gray area and you have very difficult decisions to make. Some other decisions you have to make are clearly unethical and there’s really no reason to make some of those decisions, like with the taxes and with some other things that came out later on at Uber, but certainly one of the things that any founder who’s looking to change the world with a big new technology company has to deal with, is that often, the legal framework and the regulatory framework around what you’re trying to do isn’t well established.

BRIAN KENNY: Obviously drama seems to follow Travis where he goes. And his expansion strategy was pretty aggressive. It was almost like a warlike mentality in terms of going into a new market. And you could sort of sum it up as saying ask forgiveness. Is that fair?

ALEX MACKAY: Yeah. Yeah. Ask for forgiveness, not permission. I think they were really focused on winning. I think that was sort of their ultimate goal. We describe in the case there’s this policy of principle confrontation, to ignore existing regulations until you receive pushback. And then when you do receive pushback, either from local regulators or existing sort of taxicab drivers, mobilize a response to sort of confront that. During their beta launch in 2010, they received a cease-and-desist letter from the city of San Francisco. And they essentially just ignored this letter. They rebranded, they used to be UberCab, and they just took “Cab” out of their name, so now they’re Uber. And you can see their perspective in their press release in response to this. They say, “UberCab is a first to market cutting edge transportation technology, and it must be recognized that the regulations from both city and state regulatory bodies have not been written with these innovations in mind. As such, we are happy to help educate the regulatory bodies on this new generation of technology and work closely with both agencies to ensure compliance.”

BRIAN KENNY: It’s a little arrogant.

ALEX MACKAY: Yeah, so you can see right there, they’re saying, what we’re operating in is sort of this new technology-based realm and the regulators don’t really understand what’s going on. And so instead of complying with the existing regulations, we’re going to try to push regulations to fit what we’re trying to do.

BRIAN KENNY: The case is pretty epic in terms of it sort of cuts a sweeping arc across the world, looking at the challenges that they faced with each market they entered, and none more interesting I think the New York City, which is obviously an enormous market. Can you talk a little bit about some of the challenges they faced going into New York with the cab industry being as prevalent as it was and is?

ALEX MACKAY: Yeah, absolutely. I mean, I think it’s pretty well known for people who are familiar with New York that there were restrictions on the number of medallions which allowed taxis to operate. So there was a limited number of taxis that could drive around New York City. This restriction had really driven up the value of these medallions to the taxi owners. And if you had the experience of taking taxis in New York City prior to the advent of Uber, what you’d find is that there were some areas where the service was very, very good. Downtown, Midtown Manhattan, you could almost always find a taxi, but there are other parts of the city where it was very difficult at times to find a cab. And when you got in a cab, you weren’t sure that you were always going to be given a fair ride. And so Uber coming in and providing this technology that allowed you to pick up a ride from anywhere and sort of track the route as you’re going on really disrupted this market. Consumers love them. They had a thousand apps signups before they even launched. Kalanick mentioned this in terms of their launch strategy, we have to go here because the consumers really want us here. But immediately, they started getting pushback from the taxicab owners who were threatened by this new mode of transportation. They argued that they should be under the same regulations that the taxis were. And there were a lot of local government officials that were sort of mobilized against Uber as well. De Blasio, the Mayor of New York, wrote opinion articles against Uber, claiming that they were contributing to congestion. There was a lot of concern that maybe they had some safety issues, and the taxi drivers and the owners brought a lawsuit against Uber for evading these regulations. And then later on, and this was the case in many local governments, de Blasio introduced a bill to put additional restrictions on Uber that would make them look a lot more like a traditional taxi operating model, with limited number of licenses and strict requirements for reporting.

BRIAN KENNY: And this is the same scenario that’s going to play out almost with every city that they go into because there is such an established infrastructure for the taxi industry in those places. They have lobbyists. They’re tied into the political networks. In some instances, it was revealed that they’ve been connected with organized crime. So not for the faint of heart, right, trying to expand into some of the biggest cities in the United States.

ALEX MACKAY: Absolutely. Absolutely. And what’s sort of fascinating about the United States is it’s actually a place where a company can engage in this battle over regulation on the ground. And de Blasio writes his opinion article and pushes forward this bill. Uber responds by taking out an ad campaign, over $3 million, opposing these regulations and calling out de Blasio. So again, we sort of have this fascinating example of Uber mobilizing their own lobbyists, their lawyers, but also public advertising to sort of convince the residents of New York City that de Blasio and the regulators that are trying to come down on them are in the wrong.

BRIAN KENNY: Yeah. And at the end of the day, it’s consumers that they’re really making this appeal to, because I guess my question is, are these regulations stifling innovation? And if they are, who pays the ultimate price for that, Uber or the consumer?

ALEX MACKAY: Consumers definitely loved Uber. And I don’t think any of the regulators were trying to stifle innovation. I don’t think they would say that. I think their biggest concern, their primary concern was safety, and a secondary and related concern here was losing regulatory oversight over the transportation sector. So this is a public service that had been fairly tightly regulated for a long time, and there was some concern that what happens when this just becomes almost a free market sector. At the same time, these regulators have the lobbyists from the taxicab industry and other interested parties in their ear trying to convince them that Uber really is like a taxi company and should be regulated, and really emphasizing the safety concerns and other concerns to try to get stricter regulations put on Uber. And part of that may be valid. I think you certainly should be concerned about safety and there are real concerns there, but part of it is simply the strategic game that rivals are going to play between each other. And the taxicab industry sees Uber as a threat. It’s in their best interest to lobby the regulators to come down on Uber.

BRIAN KENNY: And what’s amazing to me is that while all this is playing out, they’re not turning their tails and running. They’re continuing to push forward and expand into other parts of the world. So can you talk a little bit about what it was like trying to go into countries in Latin America, countries in Asia, where the regulations and the regulatory infrastructure is quite different than it is in the US?

ALEX MACKAY: In the case, we have anecdotes, vignettes, one for each continent. And their experience in each continent was actually pretty different. Even within a continent, you’re going to have very different regulatory frameworks for each country. So we sort of pick a few and focus on a few, just to highlight how the experience is very different in different countries. And one thing that’s sort of interesting, in Latin America, we focus on Bogota in Colombia, and what’s sort of interesting there is they launched secretly and they were pretty early on considered to be illegal, but they continue to operate despite the official policy of being illegal in Colombia. And they were able to do that in a way that you may not be able to do it so easily in the United States, just because of the different layers of enforcement and policy considerations that are present in Colombia and not necessarily in the United States. Now, when I talk about the current state of Uber in different countries, this is continually evolving. So they temporarily suspended their operations early in 2020 in Columbia. Now they’re back. This is a continual back and forth game that they’re playing with the regulators in different markets.

BRIAN KENNY: And in a place like Colombia, are they not worried about violence and the potential for violence against their drivers?

ALEX MACKAY: Absolutely. So this is true sort of around the world. I think in certain countries, violence becomes a little bit more of a concern. And what they found in Colombia is they did have more incidents where taxi drivers decided to take things into their own hands and threaten Uber drivers and Uber riders, sometimes with weapons. Another decision Uber had to make that was related to that was whether or not to allow riders to pay in cash. Because in the United States, they’d exclusively used credit cards, but in Latin America and some other countries like India, consumers tended to prefer to use cash to pay, and allowing that sort of opened up this additional risk that Uber didn’t really have a great system in place to protect them from. Because when you go to cash, you’re not able to track every rider quite as easily, and there’s just a bigger chance for fraud or for robbery and that sort of thing popping up.

BRIAN KENNY: Going into Asia was also quite a challenge for them. Can you talk a little bit about some of the challenges they faced, particularly in China?

ALEX MACKAY: They had very different experiences in each country in Asia. China was a unique case that is very fascinating, because when Uber launched there, there were already existing technology-based, you might call them, rideshare companies, that were fairly prominent, Didi and Kuaidi, And these companies later merged to be one company, DiDi, which is huge. It’s on par with Uber in terms of its global presence as a ridesharing company. When Uber launched there, they didn’t fully anticipate all the changes they would have to make to going into a very different environment. In China, besides having established competitors, Google Maps didn’t work, and they sort of relied on that mapping software to do their location services. So they had to completely redo their location services. They also, again, relied on credit cards for payments, and in China, consumers increasingly used apps to do their payments. And this became a little bit of a challenge because the main app that Chinese customers used, they used WeChat and Alipay primarily, they were actually owned by parent companies of the rival ridesharing company. So Uber had to essentially negotiate with its rivals in order to have consumers pay for their ridesharing services. And so here are a few sort of localization issues that you could argue Uber didn’t fully anticipate when they launched. The other thing about competing in China that’s sort of interesting is that Chinese policy regarding competition is very different from policy in the United States and much of Europe. For the most part, there’s not the traditional antitrust view of protecting the consumers first and foremost. That certainly comes into play, but the Chinese government has other objectives, including promoting domestic firms. And so if you think about launching into a company where there’s a large established domestic rival that certainly increases the difficulty of success, because when push comes to shove, the government is likely to come down on the side of your rival, which is the domestic company, and not the foreign entrant.

BRIAN KENNY: Yeah, which is understandable, I guess, to some extent. This sounds exhausting, to be sort of fighting skirmishes on all these fronts in all these different places in the world. How does that affect the morale or tear at the fabric maybe of the culture at a company like Uber, where they’re trying to manage this on a global scale and running into challenges every step of the way?

ALEX MACKAY: It certainly has an effect. I think Uber did a very good job at recruiting teams of people who really wanted to win. And so, if that’s the consistent message you’re sending to your teams, then these challenges may be actually considered somewhat exciting. And so I think by bringing in that sort of person, I think they actually fueled this desire to win in these markets and really kept the momentum going. One of the downsides of this of course is that if you exclusively focus on winning and getting around the existing regulations, there does become this challenge of what’s ethical and what’s not ethical? And in certain business areas, there actually often is a little bit of a gray line. I mean, you can see this outside of ridesharing. It’s a much broader thing to think about, but regulation of pharmaceuticals, regulation of use of new technologies such as drones, often the technology outpaces the regulation by a little bit and there’s this lag in trying to figure out what actually is the right thing to do. I think it’s a fair question whether or not you can disentangle this sort of principle of confrontation that’s so pervasive throughout the company culture when it comes to regulation from this principle confrontation of other ethical issues that are not necessarily business driven, and whether or not it’s easy to maintain that separation. And I think that’s a fair question, certainly worthy for debate. But what I think is important is you can set up a company where you are abiding by ethical issues that are very clear, but you’re still going to face challenges on the legal side when you’re developing a new business in an area with new technology.

BRIAN KENNY: That’s a great insight. I mean, I found myself asking myself as I got through the case, I can’t tell if Uber is the victim or the aggressor in all of this. And I guess the answer is they’re a little bit of both.

ALEX MACKAY: Yeah. I think it’s fair to characterize them as an aggressor, and I think you sort of need to be if you want to succeed and if you want to change the world in a new technology area. In some sense, they’re a victim in that we’re all the victim as consumers and as firms of regulations that are sometimes difficult to adapt in real time to changing market conditions. And there’s a good reason why they are sticky over time, but sometimes that can be very costly. Going back to something we talked about earlier, I think there are hardly any consumers that wanted Uber kicked out of New York City. I think everyone realized this was just so much superior to any other option they had, that they were really willing to fight to keep Uber around in the limited ways they could.

BRIAN KENNY: So let’s go back to the central issue in the case then, which is, how important is it to them, in terms of their global strategy, to have a presence in a place like London? They’re still not profitable by the way, we should point that out, that despite the fact that they are the largest in the space, they haven’t turned the corner to profitability yet. I would imagine London’s kind of important.

ALEX MACKAY: Absolutely. London is a key international city, and a presence there is important for Uber’s overall brand. So many people travel through London, and it’s a real benefit for anyone who travels to be able to use the same service at any city you stop in. At the same time, they’re facing these increasing regulatory pressures from London, and so it’s a real question whether or not, 10 years from now, they look substantially different from the established taxi industry that’s there. And you can kind of see this battle playing out across different markets. As another example, in Ghana. When they entered there, they actually entered with a framework for understanding. They helped build the regulations for ridesharing services in Ghana when they entered. But over time, that evolved to additional restrictions as the existing taxi companies pushed back on them. So I think a key lesson here in all of this is that the regulations that you see at any given point in time aren’t absolutely fixed, for anyone starting a technology-based company, there will be regulations that do get created that affect your business. Stepping outside of transportation, we can see that going on now with the big tech firms and sort of the antitrust investigations they’re are under. And the policymakers in the US and Europe are really trying to evolve the set of regulations to reflect the different businesses that Apple, Facebook, Microsoft, Google are involved in.

BRIAN KENNY: One thing we haven’t touched on, and it’s not touched on in the case obviously because it just sort of started fairly recently, is the pandemic and the implications of the pandemic for the rideshare industry as fewer people find themselves in need of going anywhere. Have you given any thought to that and whether that’s going to have any effect on the regulations?

ALEX MACKAY: It certainly could. Uber is in a somewhat fortunate position, at least if you judge by their market capitalization, with respect to the pandemic. Initially their stocks took a pretty big hit, but rebounded pretty quickly, and part of this is because the primary part of their business is the transportation through Uber X, but they do also offer the delivery services through Uber Eats, and that business has really picked up during this pandemic. There’s certainly a mix of views about the future, but I think most people do believe that at some point we’ll get back to business as usual, at least for Uber services, when we come up with a vaccine. I think most people anticipate that they’ll be resuming use of Uber once it becomes safe to do so. And I think, to be frank, a lot of people already have resumed using Uber, especially people who don’t have cars or who see it as a valuable alternative or a safer alternative to public transit.

BRIAN KENNY: Yeah, that’s a really good point. And the Uber Eats thing is interesting as another example of how it’s important for businesses to re-imagine the business that they’re in because that, in many ways, may be helping them through a really tough patch here. This has been a really interesting conversation, Alex, I want to ask you one final question, which is, as the students are packing up to leave class, what’s the one thing you want them to take away from the case?

ALEX MACKAY: So I would hope the students take away the importance of regulation in business strategy. And I think the case of Uber really highlights that. And if you look at the conversation around Uber I’d say for the first 10 years of their existence, it was essentially around the superiority of their technology and not so much how they handled regulation. If you think back to the cease-and-desist letter that San Francisco issued in 2010, if Uber had simply stopped operations then, we wouldn’t have the ridesharing world that we have today. So their strategy of principle confrontation with respect to regulation was really essential for their future growth. Again, this does raise important ethical considerations as you’re operating in a legal gray area, but it’s certainly an essential part of strategy.

BRIAN KENNY: Alex, thanks so much for joining us on Cold Call today. It’s been great talking to you.

ALEX MACKAY: Thank you so much, Brian.

BRIAN KENNY: If you enjoy Cold Call, you might like other podcasts on the HBR Presents Network. Whether you’re looking for advice on navigating your career, you want the latest thinking in business and management, or you just want to hear what’s on the minds of Harvard Business School professors, the HBR Presents Network has a podcast for you. Find them on Apple podcasts or wherever you listen. I’m your host, Brian Kenny, and you’ve been listening to Cold Call , an official podcast of Harvard Business School on the HBR Presents Network.

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How Uber Disrupted An Industry With An Explosive Approach

Table of contents.

In this strategy study, we’re going to delve into a company that impacted everything from people’s everyday lives and entrepreneurial dreams to the startup world and city legislature.

Its story and strategy are fascinating, often problematic, and definitely worth exploring. So let’s embark on a different kind of Uber ride.

Despite disrupting transport around the globe, Uber defines itself as a technology company , not a transport company - hence their legal name Uber Technologies Inc. It was one of the first companies to embrace and define “the sharing economy” concept and created a two-sided digital marketplace for drivers and riders.

Uber’s mission was to make transportation as easy to access as running water and they wanted to do it in a different way - without owning its own vehicle fleet like your regular taxi company. 

That asset-light strategy is what makes Uber so incredibly scalable and it proved to be a huge draw for investors. Since Uber’s launch in 2010, the company has attracted over $25 billion in VC funding.

Their business model and immense financial backing helped Uber achieve:

• Present in 10,500+ cities across 70 countries
• 131 million monthly active platform customers
• Nearly 23 million rides per day worldwide
• Over 5 million drivers worldwide
• 118 million users in 2021
• Annual revenue of $17.4 billion in 2021
• A 68% share of the US rideshare market .

Uber’s numbers are astronomical and the company is a perfect example of a disruptive and transformative brand. However, as we dive deeper into Uber’s strategy, you’ll see that Uber faced and is still facing many challenges - the biggest one among them being its (un)profitability.

But let us start at the very beginning...

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It all began on a cold night in Paris...

It was a snowy winter night in Paris in 2008. Two friends and successful startup founders, Travis Kalanick and Garrett Camp, were attending the annual tech conference LeWeb. More importantly, they were trying to get a cab but couldn’t find one.

What if you could just request a ride from your phone?

This idea, based on a very real need at that moment, is what sparked the creation of Uber.

After the conference, the entrepreneurs went their separate ways, but when Camp returned to San Francisco, he continued to be fixated on the idea and bought the domain name UberCab.com. 

In 2009, Camp was still CEO of StumbleUpon, but he began working on a prototype of UberCab as a side project. At the time, UberCab was still an idea for a shared luxury cab service that could be ordered via an app.

Camp had managed to persuade Kalanick to join UberCab in an advisory role and on July 5, 2010, the first Uber rider requested a trip across San Francisco. Kalanick became Uber’s CEO in December 2010, while Ryan Graves, Uber’s first CEO, assumed the role of the COO and board member.

Uber’s app, enabled its users to order a ride with a tap of a button . A GPS identified the rider’s location, and the cost was automatically charged to the card on the user account. Uber’s simplicity fueled its early popularity among users as well as investors and the startup quickly became one of the hottest companies in San Francisco.

By October 2010, the company received its first major funding of $1.25 million and in 2011 its growth skyrocketed. Early in the year, the company raised $11 million and went on to expand to New York, Seattle, Boston, Chicago, Washington D.C. as well as abroad in Paris.

Yes, just a year after the first Uber ride was requested, Uber had already launched internationally in Paris, where the idea for Uber first took root.

In December at the 2011 LeWeb Conference, the very conference “responsible for Uber’s inception”, Kalanick announced that Uber raised another $32 million in Series B and that investors like Jeff Bezos and Goldman Sachs got on board.

In 2012, Uber launched its arguably most popular service UberX. UberX provided an option of ordering a more affordable car as an alternative to its original black car service. That’s when Uber became really appealing to the mass market.

Behind Uber’s explosive growth are an innovative business model and growth strategy that we must explore before diving into Uber’s global expansion.

Key takeaway #1: build solutions for real-world problems

Successful products and services identify real problems and figure out how technology can be leveraged to solve them. Uber’s founders made sure they’re going to be able to get a ride during a cold winter night by using mobile technology to transform on-demand transportation.

All about Uber’s scalable business model

When talking about Uber’s business model, we need to mention that since its launch, Uber has expanded and diversified its services. It’s no longer just a ride-hailing service - it also offers food delivery (Uber Eats) and trucking (Uber Freight).

However, for the sake of simplicity, we’ll mostly focus on Uber's core business of ridesharing and the business model revolving around it. 

The basic idea behind Uber is to connect riders that need to get somewhere with drivers that are willing to take them there. Riders create the demand while drivers provide the “supply” and Uber acts as the marketplace where both parties can seamlessly connect.

As you can see, Uber has two key users and it has to provide strong value propositions for both drivers and passengers in order to attract enough users for the platform to function as intended.

Let’s see why passengers and drivers use Uber.

Uber’s value propositions

• Convenient on-demand ride bookings
• Real-time tracking
• Cheaper rates compared to taxis
• Accurate estimated time of arrival
• Automatic credit card rides
• Lower wait time for a ride
• Upfront pricing
• Multiple ride options

For drivers

• Highly flexible source of income for people who own (or are willing to loan) a car
• Completely flexible working hours
• Good trip allocation
• Assistance in getting vehicle loans
• Weekly or even daily payments

Uber’s target market

While the appeal of Uber is quite obvious, who exactly do they target?

As evident from the value propositions, Uber has two main target segments - passengers who want a fuss-free experience ride from A to B and drivers that want flexibility and some extra income, usually on the side.

When it comes to passengers, Uber’s website’s headline for a long time was: Everyone’s private driver . That instantly lets us know that Uber’s target market is very, very wide. It’s everyone who needs a ride .

While targeting several customer segments with different cost-conscious and more luxurious service options, what’s perhaps more important is how Uber reached its audience at the very beginning as you can’t just target everyone from the get-go.

It’s all about passionate early adopters

Uber did a masterful job attracting its first users - passengers as well as drivers. When it comes to launching a marketplace the first few weeks are absolutely crucial as there needs to be enough supply and demand for service to feel worthwhile.

Uber developed a highly targeted and localized early adopter strategy in the Silicon Valley area. They knew that launching there meant that the company will be interacting regularly with the tech community who are continually looking for new tools and services that improve their quality of life. People there were ideal early adopters and Uber reached them by sponsoring tech events, providing free rides, and in general driving awareness among this audience.

San Francisco also has notoriously spotty cab service which was perfect for Uber. As early adopters, completely fed up with the taxi situation in the city, tried Uber, they took to blogs, social media and every other way possible to tell their friends about this new way to ride.

The Uber experience became a vector for growth as early adopters impressed their friends with the ability to call a black car from their phone with a couple of taps. These new riders were immediately wowed by the experience and became new users and advocates within the span of a single car ride.

Uber also knew that attendees of their sponsored events were well connected and highly likely to share their experiences with friends, tech press, and social media audiences after trying Uber.

By seeding this audience, they were able to create a growth engine that hinged not just on word of mouth, but by showcasing the service to one's friends which quickly led to a growing network of passionate customers.

Uber combined that initial campaign with its referral marketing strategy where users can give friends free rides while earning credits themselves. This “give money-get money” program gave first-timers a more concrete reason to try the service. It’s been massively successful both for Uber and for certain “superfans”, one of whom earned over $50,000 in referral credits . Drivers also get referral incentives, thereby making acquisition on both driver and rider sides faster and easier.

That’s how Uber quickly got a lot of passionate users who were actually Uber’s first target market. Of course, every company wants passionate users, but as you’ll see, Uber needed them to win against the myriad taxi regulations in major cities.

Uber’s early adopters were people that weren’t happy with the existing state of the transportation industry in their cities. They quickly became advocates for the company in various forums as Uber fought against old regulations. It was a very clever move to identify and cultivate these customers early on. By making customer convenience and service a priority, Uber took the role of “disruptor” and turned it into a part of the company’s image and brand. They joined a broader socioeconomic movement towards changing old industries in ways that benefited consumers. 

It’s safe to say that if Uber wasn’t backed by its passionate users, it wouldn’t be able to expand nearly as fast as it did. In fact, the disruptive socioeconomic movement became a key part of Uber’s early business model.

Adapting to local markets

Despite targeting everyone, Uber still takes into account local experience. As Uber expanded it segmented its audiences and precisely targeted them by region and immediate needs.

For example, in countries like India and Thailand, the average customer must deal with higher traffic congestion and reduced purchasing power than a North American city. In these regions, Uber expanded its offerings with a rickshaw and motorbike service, which are more affordable and often faster transport options.

What enables Uber to adapt its services to the local condition? It’s arguably the most important part of Uber’s business model and quick expansion...

An asset-light strategy

As we said Uber is not a transport company and therefore does not need the assets a traditional taxi company requires.

By being “just” an online platform connecting drivers with passengers via their smartphones eliminates Uber’s need to establish a brick and mortar presence in each new city to which it expands operations. This model eliminates many barriers to Uber’s growth and drastically increases its scalability. It also unlocks the potential for Uber to expand into contiguous service segments such as food delivery (Uber Eats) without drastic changes to the company’s operating model. 

The majority of Uber drivers use their own cars which means that Uber doesn’t need to invest in a fleet of company-owned vehicles or the insurance and repair costs that come with it. It also doesn’t need dispatchers or call centers as the whole process of hailing a ride takes place on their app. 

So, compared to a traditional cab company, Uber doesn’t have to deal with:

• servicing and maintaining a fleet of taxis,
• call center agents,
• administration,
• parking fees,
• recruiting and training drivers and issuing permits.

This means massive savings in fixed and variable costs as well as the agility to respond more quickly and effectively to market changes relative to its competitors.

That’s why Uber was able to expand extremely quickly and in a span of 10 years appeared all over the globe. No taxi or transport company is able to achieve that.

Their lack of assets shows how they save money and expand at relatively low costs - but how does Uber actually make money?

How does Uber make money?

You can probably guess that Uber’s ridesharing service makes money by taking a cut of each ride that happens through their platform. While this is correct, Uber’s revenue model consists of more than just trip commissions - even without taking into account its other services like Uber Eats and Uber Freight. Let’s take a look at other revenue streams their business model enables.

Trip commissions and surge pricing

Uber provides the drivers on its platform with a robust supply of ride requests to accept, fulfill, and make income. When passengers pay for the ride through the app, Uber takes their commission and transfers the rest to the driver. Uber claims that they charge their drivers a 25% fee on all fares, yet reports vary.

However, Uber’s trip rates are not always the same. Uber utilizes a surge pricing model , which is also a cornerstone of Uber’s business model.

It takes advantage of the dynamic relationship between supply and demand and willingness to pay. When there are more passengers than available drivers in a given area, the algorithm increases rates in order to equilibrate this discrepancy. The first benefit of this model is that it attracts drivers to areas offering higher rates, thus increasing their numbers in regions of high demand. Second, it narrows the initial pool of potential passengers based on how much they value a ride, allowing Uber to more accurately segment their customer base and satisfy those users who need their service the most. 

Thus the surge pricing model serves the purpose of capturing the highest possible margins for the company and its drivers while establishing a targeted base of users that value Uber rides the most. These users might also be enticed to upgrade their chosen option to a premium one the next time they use Uber, which is considerably more profitable for the company.

Leasing to drivers

Uber runs a vehicle leasing program in many of its target countries to help new drivers get onboard faster. Drivers have to pay an upfront security deposit for the vehicle and payments are automatically deducted on a weekly basis from the driver’s earnings.

Advertising

There are millions of people around the world that interact with Uber cars every day. Not just the ones who use it for rides but also the ones who see them. That’s a huge opportunity for local as well as global brands that can take advantage of Uber’s on-car advertising .

Brands can advertise on cartop video screens, car wrappings, or car stickers. All three ways display ads on the car and are a fairly traditional form of advertisement, yet Uber with their huge number of drivers can get some money out of it. Of course, drivers that are willing to use their cars as moving ads also earn some additional income.

Understanding Uber’s business model is important if we want to understand the company’s extremely fast and aggressive global expansion, which is something Uber is quite famous for.

Key takeaway #2: plan for scalability

Building a scalable business model is critical, especially if the company’s revenue depends on the quantity of its service. Uber has built its platform in such a way that it is easy for it to expand to new markets and serve millions of users at the same time without a significant increase in its operational costs.

Uber expansion strategy

Uber’s initial global expansion it’s an amazing showcase of the company’s “ask for forgiveness instead of permission” approach . As we’ll see later, Uber’s culture has completely changed since then, but its early expansion is what brought the company mercurial success as well as plenty of backlash and issues of all kinds.

Uber employed an almost warlike mentality when going into a new market and the company’s sole focus was winning. This was first visible in San Francisco even before it went global.

Uber received a cease and desist order in San Francisco soon after its launch in 2010. It ignored it and issued the following response , that might be seen a bit on the arrogant side:

“UberCab is a first to market, cutting edge transportation technology and it must be recognized that the regulations from both city and state regulatory bodies have not been written with these innovations in mind. As such, we are happy to help educate the regulatory bodies on this new generation of technology and work closely with both agencies to ensure compliance and keep our service available for our truly Uber users and their drivers.

Our commitment is to facilitate an improved transportation option that provides safe, reliable, and convenient travel. That will not change. We will continue full speed ahead with the mission of making San Francisco city a great place to live and travel.”

They were relying on their passionate supporters and on their lobbying efforts to put things in order. Not just that, while this is playing out, they're continuing to push forward and expand into other parts of the world. That’s how aggressive they were from the get-go.

Going to Paris - because they can

Uber recognized early that international expansion should be a priority if the company wanted to achieve exponential growth and made Paris its 3rd launch city and 1st city outside the US.

In fact, when they launched in Paris, they launched as sort of a prototype, just to show that they can do it without too much difficulty. 

As Mina Radhakrishnan, Uber’s first Head of Product said in a blog post :

“At Uber, we launched our first international city, Paris, in 30 days. There was a lot of manual work to continue launching in other countries and languages while we didn’t have a core set of international systems  – we had to charge everyone in US dollars for several months. In parallel, we built out the foundations and kept moving pieces onto the new infrastructure, which allowed Uber to keep momentum and still scale.”

While Paris served as an enticing showcase for new investors it also made Uber realize they need an expansion playbook.

Uber’s unusual expansion playbook

At first Uber treated each city as an individual project. They would investigate what needed to be done on a case-by-case basis, and it involved a whole lot of work manpower. 

However, there was a market that needed to be monopolized and they needed to act quickly.

Uber soon realized that looking at each city as a project was too slow. Instead, they developed a process based on the lessons learned from their initial projects and created their aggressive expansion playbook.

Here’s Uber’s plan when expanding to a new city:

• Secretly enter a new market. Recruit drivers and customers through company ambassadors who gain commission and Uber credit. Offer first-time customers free rides to create a strong customer and to exploit a legal loophole for promotion. 
• Ignore threats of legal action. Make a case that customers want Uber to be there. 
• Ignore government sting operations. When the government threatens Uber’s drivers with fines, reassure them that Uber will cover any penalties, legal costs or other repercussions using the massive sums of money invested in the company.
• Start lobbying the state government. Start pushing for regulations that legalize its operations. Create a positive public image and gain the support of influential local charities and other key community stakeholders. Involve customers in petitions.
• Monopolize the market. Hire more drivers, pour more money into promotion, and manufacture PR stunts like delivering puppies or ice cream.
• Undermine the competition. Recruit drivers from competitors by offering them high sign-up fees and often employ other tactics to disrupt their services.

This was the overarching process, and there is obviously a multitude of smaller processes within each of the six steps. The playbook was implemented by a new, local team with a separate entrepreneurial manager who was overseen by Kalanick, the CEO at the time.

While the process was extremely aggressive it’s also how Uber increased its valuation from $3.7 to $41.2 billion in just 15 months. 

The main thing Uber did with this playbook was to launch its service seemingly out of the blue which gave the authorities no time to react before it was firmly established in the city.

While this playbook is responsible for Uber’s early success the approach was often challenged and frowned upon.

War on all fronts

Unsurprisingly Uber has been heavily criticized for aggressively lobbying, following unfair labor practices, jeopardizing the security of passengers and drivers, and playing with local laws by requiring no permits. There were too many scandals and issues to cover them all.

Uber’s warlike approach worked better in countries with legal systems based on common law. In common law countries like the US, Canada, and the UK, laws and regulations are more flexible and subject to judicial interpretation. Uber was therefore afforded greater latitude when arguing the legality of its case in the courts of law. 

In the U.S., Uber used consumer enthusiasm for its service to bring pressure on local politicians to develop rules that allow it to operate. However, such an approach is difficult in civil law countries like China, France, Germany, Spain, and much of continental Europe.

This resulted in plenty of bans, penalties, and losses on various markets .

Uber has been banned from operating in parts of France, Germany, Spain, the Netherlands, and Belgium. It has been accused of willfully ignoring and breaking the law, placing both drivers and riders in peril. In the Netherlands, the company had to pay around 2.3 million euros to settle a case, after being accused of operating an illegal taxi service from 2014 to 2015. 

Uber also faced issues in countries where the relationship between Uber and its drivers meets the definition of the employer-employee relationship. This is one of the reasons why the app was temporarily banned from operating in Colombia and faced similar legal issues in Chile and Argentina.

Its presence in various countries has generated an incredible backlash – protests, riots, and clashes with angry labor unions - especially cab drivers.

Uber also completely mismanaged their launch in China and lost billions trying to establish themselves on the Chinese market. Here’s where their process completely failed them.

When Uber came to China, it didn't fully anticipate all the changes it would have to make. In China, besides having an established competitor in Didi, Google Maps didn't work, so Uber had to completely redo their location services.

Uber also relied on credit cards for payments, and in China, consumers increasingly used apps to do their payments. However, the main apps consumers used ( WeChat and Alipay), were owned by parent companies of the rival ridesharing company, so Uber had to essentially negotiate with its rivals in order to have consumers pay for their ridesharing services.

The Chinese policy regarding competition is also very different from the policy in the United States and much of Europe. The Chinese government wants to promote domestic firms and aggressive tactics are not really an option, because when push comes to shove, the government is likely to come down on the side of the domestic company.

Despite many problems and failures, Uber made impressive headway in foreign markets. But their success also made them a target. Well-funded local challengers soon replicated and improved upon Uber’s model and quickly limited Uber’s market share or pushed them out of their markets.

Tactical retreat from some markets

After Uber hired a new CEO in 2017 and started cleaning house at the end of 2017 (more on this later), it switched to a much less aggressive expansion strategy. In 2018 they decided to retreat from some markets instead of trying to “win at all costs”.

While some may see retreat as a failure, Uber’s early and aggressively sought international position actually provided an opportunity. Instead of completely giving up on markets, Uber used its leverage as an established player to acquire stakes in local competitors . Uber acquired 15.4% of Chinese Didi, 38% of Russia’s Yandex Taxi, and 23.2% of Southeast Asia’s Grab. 

Uber also vowed to do a “reset” in Germany, where it operated a very limited service in Berlin. 

Uber is still left fighting in India against rival Ola where the two have been locked in a costly battle for years over dominance in India’s ride-hailing market. The rivalry is more awkward now that both companies share a mutual large investor: SoftBank. 

Uber’s early super aggressive expansion policies reflected its combative corporate culture which soon tarnished the brand’s image.

Key takeaway #3: being ultra-aggressive is a double-edged sword

There’s no denying that without its extremely fast expansion Uber wouldn’t be the brand that we know today. But as scandals mounted and as Uber lost millions and billions of dollars in certain markets, we should ask ourselves if things could have been done differently. Ignoring local regulations, while it did work in some cases and was extremely costly in others, was never ethical. And we can probably all agree that even if a company adopts an aggressive playbook, it should do all it can to act ethically as well.

Uber’s toxic culture comes to light

Uber needed three key elements in place if it wanted to thrive as a global business.

• A set of country managers who are responsible for their individual markets.
• An understanding of how those markets differ.
• A unified executive team, which creates a centralized command center.

Under Kalanick, Uber actually had the first two. There were strong regional managers and a decentralized command structure that allowed them to enthusiastically implement Uber’s playbook.

However, Uber was lacking a unified executive team to coordinate global operations, including the activity of the individual country managers.

Not just that, back-biting, undermining, and infighting were the rule, not the exception, and executive meetings were often canceled at the last minute.

When we look at Uber’s playbook, that’s not really surprising. Uber always played to win and they did a really good job at recruiting teams of people who really wanted to win as well.

One of the downsides of this course of action is that if you exclusively focus on winning and getting around the existing regulations it quickly blurs the line of what's ethical and what's not ethical - not just when expanding, but inside the company as well.

It also brings into the company a certain kind of people - people that enjoy treating every encounter as a confrontation . Constantly fighting skirmishes outside and inside the company is not just exhausting but affects the morale at the company and the corporate culture.

Uber’s cultural guidelines weren’t helping. They ranged from the sober “Be Yourself” to full-on bro-tastic maxims like “Superpumped” and “Always be hustling”.

As the company scaled rapidly, so did its toxic culture and questionable business tactics. These led to a constant stream of nasty and very public challenges. They included political infighting, allegations of corporate espionage, and criminal investigations.

Then there were the many run-ins with regulators, taxi firms, and even Uber’s own drivers. Uber saw a backlash in some of its key markets which came to a head with the #DeleteUber campaign.

The old Uber logo didn’t help either. It emphasized the public’s perception of Uber’s hostility, imposing itself on customers with all-caps on black background, reflecting Uber’s hyper-masculine attitude.

While Kalanick did build a hugely successful business, an increasingly toxic culture had become a poison and tarnished the brand.

“The radical scale success of Uber that was unprecedented at the time, I think, led to a culture that was highly confident, a culture that was confrontational, a culture that to some extent celebrated breaking the rules . All of which made possible what Uber built, but which created a blind spot as to individual's respect, respect for diversity of different viewpoints, et cetera, that led to Susan Fowler's blog – which by the way wasn't the only difficult occurrence happening at the company,” says Dara Khosrowshahi, the current CEO of Uber.

Exposed by a blog post

The blog post Khosrowshahi mentions was published by a former Uber engineer Susan Fowler in February 2017. She described a toxic culture at the company where sexual harassment was rampant and managers cannibalized each other. 

Her post received so much attention that Uber decided to respond by having the law firm Perkins Coie do an investigation into her allegations.

The CEO and co-founder of Uber, Travis Kalanick, began facing heavy scrutiny over Uber’s company culture. Earlier in 2017 Bloomberg also posted a video of him arguing with an uber driver over falling fare rates, which certainly didn’t help his case and further tarnished Uber’s brand.

The company finally recognized a crucial if simple truth: to maintain a sustainable brand long-term, Uber had to be honest about what it stood for. It postured itself as a cutting-edge, progressive company, yet its corporate culture was the opposite of progressive. The brand teetered on the brink of outright hypocrisy.

Kalanick resigned as CEO on June 20, 2017, and there were numerous other personnel casualties of Uber’s very public self-reflection.

The need to rebrand was clear: without a complete brand overhaul, Uber risked totaling its business and Uber decided to undergo a massive effort to restore its image and set itself up for the future.

Key takeaway #4: recognize when it’s time for a cultural shift

While the “always be hustling” mantra and “win at all costs” people might be required to succeed at a startup, there’s a time when such thinking should be left behind. As Uber grew and expanded it never really took a hard look at the corporate culture it created. It wasn’t a small startup anymore, it became a huge company and should’ve therefore acted more responsibly sooner. In the end, it was forced into an overhaul, but not before its toxic culture tarnished the brand.

Uber rebrands and goes public

When Uber decided to turn things around there were two major areas they focused on - one was their corporate culture and values and the other was their brand .

Khosrowshahi, the new CEO of Uber, said that they asked their employees what should represent the culture of Uber going forward.

He recaps the conversations and answers:

“We celebrate differences. We want to be a different company but we also celebrate differences and backgrounds and where you come from and religion and sexuality, et cetera, and we believe that no matter what you bring to the table, you should be able to contribute to what we call Uber.

The simplest answer that I hear repeated over and over is: We do the right thing, period. We didn't want to define to the employee what the right thing is. You know what the right thing is. Let's do that and, period, that's what we do.”

Listening, observing, and learning became the foundations of Uber’s cultural overhaul.

Since the change, some Uber executives even go the extra mile to participate as normal Uber drivers and experience what Uber’s drivers experience. The importance of getting one’s hands dirty is a part of the refreshed culture. 

They started calling their drivers “driver-partners”.

“Now we have a fundamental connection there that is reflected in the

organization, we have a driver product team, and we now fundamentally build our

product with the driver. We talk to them, we have a dialogue with them, and we build with

them. That kind of connectivity with our driver-partners, I think, creates a win-win and it

creates mutual respect,” says Khosrowshahi.

The current CEO also recognized that executives can get out of touch with reality and said that whenever he goes from city to city he meets with drivers and asks them what they like and what they don’t like.

Uber also changed its approach to communication with governments and regulators. Before all the conversations and the dialogue was happening through lawyers, now Uber is trying to talk about their requests and find a compromise wherever they can’t agree with authorities.

While Uber is still facing challenges and there are still many dissatisfied parties, the company has changed its warlike and aggressive approach and is trying to make things work in a different, more humane way.

A new, more emphatic brand

Uber also embarked on a major rebranding intended to capture an accessible, progressive style that reflected the best of the company. 

The company understood it faced a critical mission: it had to persuade customers that its lousy reputation left the building when its former CEO was replaced.

Uber opted for a complete redesign to overhaul the brand from the ground up. 

Their new logo is the foundation of a substantial rebranding effort – one that incorporates a sense of mobility, accessibility, and friendliness not found in previous iterations. The company’s goal was to create a cohesive brand system described as “instantly recognizable, works around the world, and is efficient to execute” .

The agency Wolff-Olins summed up the project goals on their case study site :

“The brand needed to work around the world. Its highest growth areas are in regions outside of the US, such as Latin America and India, where Wolff Olins has a considerable depth of experience. Instead of pursuing a complex identity system, localized through color and pattern, we moved towards a universal ‘beyond simple global brand. Teams in diverse markets can make it relevant to their audiences with culturally specific content.”

What began as everyone’s personal driver is now all about moving forward and moving together .

The fresh logo was supplemented by creatives that included photos of people from around the world — serving two purposes. Firstly, it represents Uber’s global market, and secondly, adding this human element made the brand a whole lot more relatable. It’s no longer just a tech startup in Silicon Valley — it’s also the drivers you meet every morning, the co-riders you pool with every evening.

Arguably the best example of Uber’s new branding direction is their marketing campaign What moves you, moves us . It’s a campaign that focuses on the drivers and is built on empathy. It acknowledges and shows appreciation for their drivers' hard work and shows the customers who and what they’re supporting when they choose to ride with Uber.

More recently, Uber acknowledged the hard work of frontline healthcare workers during the Covid-19 pandemic with a #GratefulUK campaign. The company offered them free rides and free meals during the Christmas period and encouraged people to share letters, drawings, poems, or doodles thanking the workers. 

Overhauling the brand’s image and corporate culture were not the only major changes that happened after Uber’s scandalous years and Kalanick’s resignation. Another major step towards the maturity of the company happened in 2019 when Uber decided to go Public.

Going public - to boost reputation, get more money, or both?

In less than two years after the rebrand began, Uber decided to go public. Filing for IPO was likely a part of Uber’s rebranding plan. 

Why? People tend to look at public companies as more mature. Going public also provides a sense of accountability because public companies have to report on a quarterly basis and are subject to the regulatory process. It opens the company up to an entire set of investors who drive transparency. That’s exactly what Uber needed after all the previous scandals.

Of course, the public market also provides greater liquidity and more readily available money, which Uber needed as well as it was losing billions of dollars on a yearly basis.

However, Uber's IPO didn’t go as well as expected. Uber’s valuation predictions hovered around $120 billion , which would’ve made it the most valuable company to ever go public. In the end, Uber priced its stock at $45 apiece for a valuation of $82.4 billion , which was lower than many expected yet it is still one of the most valuable exits in history. Uber’s stock began falling right away, but we won’t go further into that.

What’s more important - the company has become public which means new pressure from big investors and shareholders every quarter to stem their losses. And as we’ll see later on, Uber’s eventual profitability is not nearly guaranteed.

Before we dive into the questions of profitability, we should examine how Uber defined itself as an innovative company and how it evolved in the last 10 years.

Key takeaway #5: when you need to change, show dedication

Although the jury is still out on how successful Uber’s rebranding actually is, it’s clear that they’ve undergone major steps to repair their reputation. And there’s really no other way to do it. If you want to rescue a tarnished brand, you have to show that you’re truly dedicated to making it work and aren’t just trying to save face for your own sake.

Uber innovation & diversification strategy

Although Uber is known as the main disruptor in the transport industry, the company is actually not the ridesharing pioneer, but a fast follower in the sector.

Uber’s competitor Lyft and former competitor Sidecar (which shuttered back in 2015) are the ones that pioneered ridesharing as it is known today, which entails using non-professional, non-commercially insured vehicles and drivers. 

Uber initially worked exclusively with commercially licensed, insured, and regulated entities (known as Black Cars in many areas) before transitioning to the current ridesharing model.

While Uber was a fast follower, it expanded quicker and more aggressively and offered a better user experience which led to market dominance in many regions. 

In fact, Uber followed a market entry pattern that has proven successful for business entities in the past – Myspace preceded Facebook, Yahoo preceded Google, and Blackberry preceded Apple’s iPhone. Historical patterns of transformation suggest that being first does have its advantages, but entering the market early and iterating quickly is even more vital when it comes to dominating a market. 

Uber’s expansion playbook is a prime example of how quickly they adapted their model and grabbed the opportunity of extremely fast expansion which was possible because of the significant funding the company received.

Their activation of early adopters and passionate customers to support Uber via petitions and pressure on local authorities can also be seen as an innovative approach to one of the ridesharing market’s main challenges.

A flexible pricing model

Uber’s surge pricing model is another example of a simple yet ingenious solution to a very real problem of the taxi industry - how to get a ride when you simply can’t get a cab . That can happen during peak traffic times or during bad weather.

When Uber’s demand for rides is higher than the supply the prices surge. That means users can almost always get a ride if they’re prepared to pay enough. 

Researcher Oliver Senn analyzed satellite data on weather conditions over a two-month period, and he obtained 830 million GPS records of 80 million taxi trips. The data shows that it was not the high demand for taxis that resulted in a perceived shortage on rainy days; instead, it appeared that many cabbies simply did not pick up passengers, fearing accidents on the wet roads. However, Uber entices their drivers with higher prices and therefore higher earnings when there’s a shortage of rides. 

While plenty of users don’t like the surge pricing, it proved to be a way to get more drivers in the area to take advantage of higher earnings when there’s a shortage of available rides.

Reviews ensure a better service

Another massive differentiator between Uber and traditional taxis is that Uber has rating systems for both drivers and passengers. A review system by itself is nothing new, but it hasn’t been used in the transport industry before - especially not on an individual basis.

The system is a simple solution to the question: “How will drivers and passengers behave?”

It promotes trust in Uber and better behavior on the parts of both driver and passenger as it weeds out the bad users. 

More than just a ridesharing service

Over the years Uber has become more than just a ridesharing company. It’s leveraging its underlying technology to test new services that have the potential to generate additional revenue and fuel Uber’s ambitions.

By introducing new services that add incremental value for users, Uber creates opportunities to capture a larger share of their consumer’s wallets, while also retaining and generating additional income for drivers as well.

There are two main services that stuck around: Uber Freight and Uber Eats.

Uber Freight

Uber Freight is basically Uber for trucks. Uber launched its own on-demand trucking app in 2017 with the core idea of seamlessly matching shippers with carriers. 

In August 2018, it was spun off into a separate business unit, a move that simultaneously allowed it to gain momentum and burn more cash. After spinning off of Uber, the freight company underwent an expansion. 

In 2020 an investment firm Greenbriar Equity Group has committed to invest $500 million in a Series A preferred stock financing for Uber Freight. When announcing the investment Uber said it will maintain majority ownership in Uber Freight and will use the funds to continue to scale its logistics platform, which helps truck drivers connect with shipping companies.

Uber Eats food delivery service launched in 2016 and it was a logical next step for Uber as it aligns with its ridesharing business and helps it utilize its large fleet of drivers. It launched as a separate app and grew in popularity at a rapid pace.

Uber Eats ensured that Uber’s customers used the company’s services more often than ever before. Users who used both Uber and Uber Eats booked an average of 11.5 trips per month, versus only 4.9 trips for those using only a single Uber service.

Consumers benefited from an additional convenient service, and drivers gained a new source of trips which generated a more steady stream of bookings throughout the day, which in turn increased the overall supply of drivers.

With drivers now busier and making more consistent income, they have less reason to dual-app and drive for a competing service like Lyft.

Uber Eats was also huge for Uber during the Covid-19 pandemic. While Uber’s ride-hailing segment contracted by 24%, Uber Eats increased revenues by over 200% in 2020 and prevented a much higher loss of revenue that would have occurred if Uber hadn’t diversified its services.

Uber Revenue by Segment

YearMobilityDeliveryFreightOther2018$8.9 Billion$0.7 Billion$0.3 Billion$0.1 Billion2019$10.4 Billion$1.3 Billion$0.7 Billion$1.3 Billion2020$7.9 Billion$4.8 Billion$0.9 Billion$1.3 Billion

Dreaming of self-driving cars

You may have heard of Uber’s Advanced Technologies Group(ATG) which was established in 2016 with the purpose of developing self-driving cars. Kalanick, the CEO at the time, saw it as an essential investment and there’s no doubt that fully self-driving cars would immensely benefit Uber.

However, ATG brought high costs and safety challenges . Throughout the course of a pandemic-stricken year, Uber has made efforts to stem losses in its ride-hailing business and control business costs. That’s why at the end of 2020 ATG was acquired by its start-up competitor Aurora Innovation. In fact, Uber handed its equity in ATG to Aurora and then invested $400 million into Aurora, which will give Uber a 26% stake in the company. Uber CEO Dara Khosrowshahi will also join Aurora’s board.

“With the addition of ATG, Aurora will have an incredibly strong team and technology, a clear path to several markets, and the resources to deliver,” Chris Urmson, co-founder and CEO of Aurora, said in a statement. “Simply put, Aurora will be the company best positioned to deliver the self-driving products necessary to make transportation and logistics safer, more accessible, and less expensive.”

Uber positioned itself to be right there once Aurora develops their self-driving car, which just might be the key to Uber’s profitability in the future.

Looking towards the future

While Uber’s plans for the future after the pandemic are not set in stone, Khosrowshahi says that people should think about Uber not as a service but as a transportation platform or as an Amazon of transportation. He said that people will be able to take a bus, to take a car, to take a train or to take a taxi using Uber. It would be a win for the consumer because the more choices they've got, the more pricing they've got, the better the product is.

Uber is aiming to pivot their strategy so that it is more inclusive. How they are planning to do that is yet to be seen, but we can be certain they’re going to try and offer new services and further diversify their product as that might be their only option if the company wants to become profitable.

Key takeaway #6: keep innovating and evolving

Uber doesn’t rest on its laurels of being the first prominent rideshare app. Its founders understood really well that the competition will grow over time and they can only stay ahead if they evolve and diversify. They keep adding new features and new services while constantly looking to invest in new technologies.

Will Uber ever be profitable?

Although Uber claims that it will soon become profitable, there are many sceptics that think it won’t happen - and with a good reason.

Uber has been losing billions of dollars during the last few years. Although Uber losses improved in 2020 due to Uber Eats, the company still lost $6.77 billion . Uber plans to minimize losses in 2021, yet due to the ongoing pandemic, Uber had to spend hundreds of millions of dollars in incentives to get drivers back on the streets once the Covid situation improved and the demand increased.

Hubert Horan , a transportation industry expert who has published in-depth analyses of the company's financial outlook, has this to say about Uber’s profitability:

"Not only can I not imagine any remotely plausible explanation as to how Uber could suddenly become profitable after eleven years of massive losses, but absolutely no one has attempted to lay out a financial analysis making such a case. Not the company, not Wall Street analysts, not academics — no one."

In its S-1, a document that every company must file with the SEC if it wants to go public, Uber itself acknowledged and warned that it was possible it would never become profitable .

How come such a successful company that is a magnet for investors still struggles with such heavy losses?

The thing is Uber doesn't really have an edge over its competitors. A smartphone app that matches passengers with drivers can be — and has been — replicated by countless other companies. And once there are competitors, Uber doesn’t offer a service that would be that much more efficient. 

As it often does, it all comes down to costs-leadership . The need for human drivers that have to earn a living wage seems to be a vexing problem for the ride-hailing industry. It just costs too much. 

That's why Uber once staked so much of its future on self-driving cars, which could potentially reduce the company’s per-mile cost by 80% . But as you know, Uber has already sold its self-driving research center.

The typical explanation of the Uber model is that its focus has been on growth, not profit. Huge investments allowed Uber to keep scaling up until it was everywhere and ensured that the populace relied on its service. According to Horan, its plan was to "eliminate all meaningful competition and then profit from this quasi-monopoly power" in the exact same way that Amazon has managed to do for e-commerce. Except that it hasn't worked as competition is still here and Uber’s core service is not that different from it.

Uber’s push for profitability might be the reason that as of April 2021, the cost of a ride had increased by 40% as the New York Times reported . Why? The increase might be due to the shortage of drivers at the time. Uber is notorious for not paying drivers enough (according to the drivers), but that only works until the point that a critical number of them decide that it isn't worth any of their time. 

To counter that Uber has to raise fares, but then it runs the risk of losing a big part of their market and their revenue, even with higher per-passenger fares.

What’s the solution? That’s probably the most important question in Uber’s history and one that will define its future. It’s also the reason Uber is trying to position itself as a transportation platform and not just a ridesharing service as profitability continues to be an industry-wide problem.

Key takeaway #7: have a clear plan on how to become profitable

Although Uber is one of the fastest-growing and arguably one of the most successful companies in the last decades, it’s still not profitable and it’s a fair question if it ever will be. This shows that growth is not everything and if you want to run a sustainable business you have to know how it will eventually become profitable.

Uber’s SWOT analysis

Let’s recap everything we’ve covered during this strategy study in a concise SWOT analysis.

Global brand recognition

Uber’s brand is unmistakable and has become a synonym for “ridesharing.” Uber is present in over 60 countries worldwide and is the first ridesharing brand that comes to mind when new users are looking for ridesharing apps.

A strong market position

Uber is the largest ridesharing platform in the U.S. and worldwide. Currently, Uber’s market share in the US is 68% and 32,4% worldwide. In an industry that’s all about the quantity that’s extremely important.

Knows how to diversify

One of Uber’s key success factors is its ability to adapt and innovate to encompass changing needs. This can be seen in its diversification into logistics with Uber Freight and broadening its services to offer groceries and food delivery with UberEats. Diversification plays a huge part in Uber’s total revenue.

Dynamic pricing model

Uber’s surge pricing strategy has been good for its drivers. Drivers can earn more at night, in bad weather conditions, and during the holidays. This encourages more drivers to take ride requests to meet demand surges.

Low operational costs

Uber is based on low fixed investments and minimal physical assets. It has a fleet of cars they don’t actually own and no full-time drivers which helps to keep operational costs down. 

Convenient to use

That’s the whole point of Uber. Anyone can order a ride with a few taps on their screen, learn the price of the ride and pay it through the app.

More affordable than cabs

Uber was and still is more affordable than most cabs and its competition. However, that might change with the recent price surges.

Generally good service due to the review system

Uber riders have the ability to rate their trip and the driver. As drivers are always trying to improve their ratings, riders will most likely experience good service.

Bad publicity due to scandals

Despite Uber’s rebranding, stories of former sexual harassment scandals, driver fraud, and reports of very low driver’s wages reflect poorly on the company’s image and might alienate drivers as well as riders.

Substantial losses

Uber has lost billions of dollars year after year, which is starting to affect its image and spending. Nobody really knows if the company can become profitable and when or how it might happen.

Low-profit margins

Uber has to keep its fares low and can’t increase its commission per trip leading to low-profit margins. As we’ve seen, Uber's unprofitability has already prompted it to withdraw from China, Russia, and Southeast Asia. 

Dependency on their workforce

Uber is heavily dependent on its drivers. They are essentially Uber’s brand ambassadors 24/7. However, their behavior is unpredictable and the company’s image is hurt every time a scandalous story reaches the news. Many drivers have been accused of harassment and abuse.

The main service can be easily replicated

The ridesharing industry has a relatively low barrier of entry and Uber’s main functionality can be easily replicated by potential competitors which happened in Southeast Asia.

Opportunities

Further diversification

Uber Eats exploded during the recent Covid-19 Pandemic and significantly increased Uber’s revenue in 2020. Uber Freight also grew by 64% in Q2 of 2021 and earned $348 million. Further diversification might be one of the more viable paths towards Uber’s profitability.

Self-driving cars

While not there yet, driverless technology would significantly lower Uber’s operational costs while eliminating scandalous stories caused by their drivers’ bad behavior.

New markets

There are still many untapped growth opportunities in many countries. In fact, t he acquisition of Careem by Uber with $3.1 billion has opened the door to an incredible business opportunity for the company in the Middle East.

Local laws and regulations Uber has previously ignored

Increasing pressures from local authorities require Uber to comply with certain laws, which the company skirted when setting up in different countries. Non-compliance with local laws incurs fines and results in bad publicity. At the same time, the communities of traditional taxis are pushing heavily on the enforcement of some type of regulation. 

Low driver’s wages

Uber drivers reportedly earn less than minimum wage in many locations. Drivers have become more active in various locations in advocating for their “fair share” and are pressuring Uber to increase their wages, which would make it even harder to become profitable.

Employee retention

Unsatisfied drivers may switch to rival platforms due to better incentives from competitors from the ride-hailing market or from other parts of the sharing economy.

More and more competition

As the ridesharing market becomes more saturated, it will become more difficult for Uber to retain customers as shifting to other services if they offer lower prices is very easy. This goes for services like food delivery as well.

Final thoughts and key lessons

Uber is a fascinating company with a fascinating story. It’s one of the most famous disruptors in the last decade, yet its technology is not really disruptive. But the way it uses it and combines it with its business model certainly is!

If there’s one thing that defines Uber it’s determination .

Determination to stick to their brand strategy of a technological company and an industry disruptor. Determination to quickly expand across the globe even if it means taking on regulators and local authorities. Determination to right the ship and overhaul the culture once they recognized their mistakes.

What allowed Uber to do all of the above while adapting to different challenges and markets is its lack of assets . That’s where the company really shines - they solved a big real-world problem with the fewest possible assets. 

Uber is not a shining example of a company that did everything right. 

But no one can argue that it looked for an opening, grabbed the chance, and achieved amazing things. 

It’s a walking lesson that sometimes you have to grab the opportunity before it’s too late, learn on the flight, and do your best to correct your mistakes as you go .

In the end, Uber disrupted an entire industry and achieved a multi-billion-dollar IPO. Who knows what would’ve happened if they waited to have everything figured out?

Recap: Growth by the numbers

Uber’s 2020 data is skewed by the impact of the Covid-19 pandemic, that’s why we decided to use the data from 2019 instead.

The ultimate list of strategic takeaways:

• Create a flexible business model and stick to it.

Uber always identified itself as an asset-light technology company. That allowed it to quickly expand, adapt and diversify. Uber’s potential because of its scalability and flexibility is what made it so attractive to the founders.

• Recognize what you need to do to succeed and don’t waver.

Uber knew that it needed to scale and reach new users fast if it wanted to grab its market share before the competition. Their super aggressive expansion is controversial but it did achieve its goal and positioned Uber as the rideshare leader. 

• Don’t neglect your corporate culture.

Uber’s many scandals combined with its toxic corporate culture tarnished Uber’s image and almost ended in disaster. If your early dogma is to hustle, recognize when it’s time for a cultural shift and make sure your values, brand, and culture are in sync.

• Diversify and evolve to stay ahead of the competition.

Look for new opportunities and add new features or services to capture them. Uber’s asset-light flexible service allowed it to explore other complementary industries and Uber Eats significantly limited Uber’s losses during the pandemic. If there are low barriers to entry into the industry, the company should be proactive and take steps to stay ahead of emerging competition.

Strategies Driving Uber’s Successful Journey: A Case Study

by PanGrow | Nov 6, 2023

Uber, the global leader in ride-hailing, is a universally recognized brand. We all know it as the platform that seamlessly links passengers with drivers for convenient transportation. However, what often escapes notice is that beneath the surface, Uber is more than just a transportation facilitator; it’s a formidable force in data and analytics. On a daily basis, countless riders engage with the Uber app, unwittingly feeding into a sophisticated network of data-powered insights and choices.

Uber stands as a dominant force in the transportation and delivery industry, boasting operations in over 72 countries and catering to more than 110 million active monthly users.

The remarkable triumph of Uber has spurred numerous entrepreneurs to venture into the realm of ride-hailing and delivery services. Let us get familiarized with Uber’s marketing strategies through this guide.

Revenue Model & Pricing Strategy

Uber makes money in a few different ways. Its a commission based system, where it takes a percentage of the total fare. There are various elements of its revenue model.

First, they take a part of the money you pay for your ride. This is called a commission, and it’s usually about 20-30% of the total cost. Sometimes, when a lot of people need rides, Uber might charge a bit more. This is called surge pricing. It helps encourage more drivers to be available when it’s really busy, and Uber makes extra money from it.

They also have other fees, like a booking fee or an airport fee. These are extra charges for specific situations. Some people pay a subscription fee for a service called Uber Pass. It gives them discounts on rides and other perks, and Uber makes money from these subscriptions.

Uber does more than just rides. They also deliver food (Uber Eats) and help ship goods (Uber Freight). They make money from fees they charge restaurants, riders, and other partners for these services. Businesses can pay Uber to advertise on their app, which brings in more money.

So, in short, Uber mainly makes money by taking a piece of the fare from each ride. They also have other ways of earning, like subscriptions, fees, and advertising. They’ve expanded into different services to bring in even more money.

Navigating Marketing Strategies

Uber, a trailblazer in the ride-sharing industry, owes much of its success to a well-crafted marketing strategy.

Customer at the Center Stage

A cornerstone of Uber’s strategy is its unwavering focus on the user. The company places a premium on delivering a seamless, hassle-free experience. This commitment is evident in their user-friendly mobile app and straightforward booking process. By prioritizing customer satisfaction, Uber has built a loyal and trusting customer base.

Dynamic Pricing Feature

Another standout tactic is Uber’s dynamic pricing, known as surge pricing. This strategy, allows Uber to adjust fares based on demand and supply. While it can be a topic of debate, surge pricing effectively balances ride availability during peak times, ensuring a reliable service.

Referral Program: A Win For All

Uber’s referral program is a brilliant move in customer acquisition. By encouraging existing users to refer friends and family, the company taps into the power of word-of-mouth marketing. This not only brings in new customers but also fosters a sense of community and trust among users. Incentives like discounts on future rides create a win-win situation, driving platform growth.

Data-Driven Approach

Data is a powerful ally for Uber. The company leverages analytics to gain insights into customer behavior and preferences. This data-driven approach informs decisions on pricing, routes, and service expansion, keeping Uber attuned to evolving customer needs.

Enhancing Experience

In addition to customer-focused strategies, Uber places significant emphasis on driver satisfaction. Recognizing drivers as integral to the service, Uber implements initiatives to enhance their experience. Offering flexible earning opportunities, access to support, and performance incentives are among the ways Uber keeps its driver base motivated and engaged.

Multichannel Marketing

Uber’s marketing efforts span various channels. The company invests heavily in digital marketing, utilizing social media, email campaigns, and targeted ads to engage with users. This multi-channel approach ensures Uber maintains a strong online presence and remains top-of-mind.

In summary, Uber’s success hinges on its dedication to user satisfaction, data-informed decision-making, and a comprehensive approach to the ride-sharing ecosystem. By focusing on user experience, implementing dynamic pricing, leveraging referral programs, and using data analytics, Uber has established itself as a dominant force in global transportation.

Additionally, the company’s attention to driver satisfaction and robust digital marketing efforts further contribute to its triumph.

Brand Building & Customer Loyalty

A key element of Uber’s success lies in its strategic use of social media platforms like Instagram, Facebook, and YouTube to connect with a diverse user base, including passengers, drivers, food enthusiasts, and partners. This concerted effort is central to building a strong brand identity and fostering lasting customer loyalty.

Through engaging content on platforms like YouTube, Uber shares driver stories, customer feedback, road safety tips, and updates on initiatives. This content not only informs and educates but also reinforces the brand’s commitment to safety, innovation, and community.

Uber excels at customer service on social media, promptly addressing feedback, suggestions, and concerns. With a dedicated customer service account, the company builds trust and reliability among its users.

Campaigns like the #WhyIRide initiative in 2016, encouraging users to share their motivations for choosing Uber on social media, have been highly successful in generating organic word-of-mouth marketing and user-generated content. This has significantly increased brand awareness and customer engagement.

Uber also strategically partners with influential figures, celebrities, and organizations that align with its values. Notable collaborations, like pledging to create one million job opportunities for women as drivers in partnership with UN Women in 2015, underscore the brand’s commitment to inclusivity and empowerment, garnering widespread recognition and praise.

Challenges and Future Prospects

Uber serves as a pivotal platform connecting drivers and passengers across cities globally. The company’s forward trajectory appears promising, owing to its astute consideration of critical factors such as regulatory dynamics, fierce competition in the transportation and delivery sector, ongoing innovation in products and services, and unwavering commitment to customer satisfaction.

This success has piqued the interest of entrepreneurs, leading to an uptick in the development of Uber-like clone apps for taxis and delivery services, potentially expanding to incorporate various modes of transportation like bikes, motorbikes, trains, scooters, buses, and even futuristic prospects like flying taxis. However, adherence to local laws and regulations is paramount in implementing Uber’s marketing strategies, as stringent rules governing safety, labor, and taxation may influence the company’s profitability and growth.

In the face of its accomplishments, Uber grapples with a set of formidable challenges that could impact its operations, financial performance, and overall prosperity. Foremost among these are regulatory hurdles. Many cities and countries contend that Uber’s business model clashes with existing legal frameworks, resulting in bans and limitations on its operations in certain locales.

Legal entanglements also pose a significant obstacle. Disputes with drivers seeking reclassification as employees rather than independent contractors, along with allegations of inadequate safety measures against harassment and assault, have landed Uber in the courtroom.

Furthermore, Uber contends with fierce competition in a cutthroat industry, contending with rivals like Lyft and Didi Chuxing, some of whom boast strong affiliations with local authorities and transportation entities.

Safety constitutes a paramount concern for Uber, encompassing both rider and driver well-being. The company has faced scrutiny for perceived inadequacies in safeguarding its stakeholders, prompting substantial policy adjustments to address these anxieties.

Finally, despite its lofty valuation, Uber’s profitability remains elusive. Pressured by investors to demonstrate sustainable financial viability, the company has undertaken substantial modifications to its business model and cost structure in a bid to achieve profitability. Balancing these challenges against its well-established strengths, Uber’s trajectory in the transportation and delivery sector will hinge on its ability to navigate these hurdles and capitalize on its innovative and customer-centric approach.

Lessons Learnt

Uber employs a distinctive marketing approach to cultivate a loyal user community. By offering complimentary rides, discounted fares, and referral perks, the company effectively lures in customers. The exceptional quality of the ride experience fosters a desire for repeated use, ultimately creating a habitual and revenue-generating pattern for the company.

To ingrain this novel mode of transportation in the public consciousness, Uber has made substantial investments in marketing efforts, generously providing free rides on a global scale. Moreover, the company leverages its competitive pricing structure as a significant selling point, further solidifying its appeal.

If you are interested in knowing more about digital marketing services that can help your business substantially, contact us at [email protected] or visit our website today!

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Uber Digital Marketing: All You Need To Know

• Apr 06, 2022

Uber has built their empire from a start-up company to a 68 billion-dollar company. It’s easily one of the most successful startups up to date.

But how did the business become the giant they are now?

Let’s dive into Uber’s digital marketing strategies and campaigns over the years.

7 Effective Ways Uber Has Marketed Their Company

While Uber on digital campaigns has performed well, in the course of this article, we’ll dive into everything Uber has done effectively. As an international brand, Uber has consistently managed to nab a large market share through the Uber digital marketing strategy which manages to touch on points common with most successful brands.

1. Word of Mouth: Social Media Marketing Strategy

Uber started its marketing with a word-of-mouth marketing strategy. They didn’t go with the traditional marketing strategy for their product like having commercials on tv.

Uber’s digital marketing strategy was a big risk but since they did it strategically, it paid off big time.

Their word-of-mouth happened online. They used the power of social media to get people talking about their product. We’ll dive into their social media marketing later.

Why were they so brave in using only word-of-mouth as their strategy?

Because they knew that their product was innovative.

They knew that the quality they’re offering is top of the line. Their content and tactics focused on the demand for a better commuting experience.

After all, it wasn’t hard to get people talking if you have great service, to begin with.

READ MORE : Automotive Digital Marketing

2. Go big or Go home

On January 4 – 8, 2017, CES happened in Las Vegas. CES stands for Consumer Electronics Show and it’s one of the most prestigious events in the tech industry. There was an estimated 180,000 people who went to Las Vegas, Nevada for the 5-day festival.

Uber wanted in on all the fun.

They offered their Uber Chopper during this time and it got people on social media buzzing . It was where they take people up in the sky for a 15-minute helicopter ride and see Las Vegas right beneath you.

This was priced at a whopping $100 per person and was available only to the high status.

A lot of people would think that it would be crazy to offer such a service. Not a lot of people can afford it so it wouldn’t take off, excuse the pun. But it was such a crazy idea, it worked. Their incredibly risky digital marketing strategy paid off.

People started talking about it on social media and every other online platform. Journalists and tech bloggers scrambled to get in line for it so they can experience it firsthand and write about it later on their blog.

Despite the huge success, Uber Chopper didn’t become part of their regular services. It was more of a publicity stunt so people started talking about Uber and it was a great success! Everyone kept talking and writing about their experience online and offline. The business was able to successfully establish a reputable social media presence.

3. Selling the Experience

Uber on its own is pretty self-explanatory. You contact a driver, set your destination, meet up with them, and they drop you off at your destination.

The cars range from standard cars all the way up to luxury cars for when you need to arrive in style.

Pretty self-explanatory, right? So how did they market such a common service?

The digital marketing team didn’t focus on selling the service. Instead, they sold the experience.

They have curated a series of commercials that focus on what they can offer. They focused on how convenient it is to search and book a ride with just your phone. They focused on how fast you can get to your destination with their system. They focused on how the time saved from communicating can mean the world for someone.

The brand wanted to engage its audience through these posts. Their powerful content is relatable to their audience. Through these commercials, they were able to appreciate the value of the company. Uber’s marketing strategy focused on how a creative solution can change the world.

READ MORE: Pursuasive Advertising: All you Need to Know

4. Conversation Starter

Uber was able to bridge the gap between driver and customer. They were able to open a platform where both parties can communicate even before the ride. This made “hailing a cab” faster and more convenient.

They have also included a rating system where customers were able to review their driver based on their experience. Since some customers preferred to not talk during the journey, they can include that in their rating by adding comments. Because of this review system, customers can be rest assured that their driver is a real person and they won’t suddenly get kidnapped.

They included these conversations in their social media marketing. They wanted to hear the experiences of customers, engage them, and establish connections with them. Because of this engagement, they were able to release multiple commercials based on the life stories of their customers. They made sure that they were able to relate to their customers and let them know they were listening.

5. Designed for Comfort

Uber has revolutionized the public transportation system and make life easier, while providing job opportunities for people. They have eliminated the hassle of standing outside and hailing a cab. They’ve made the cars more stylish and included an option to have bigger or more luxurious cars to pick you up.

Aside from that, have you seen their app? It’s so well built!

Uber’s application gave extra thought to user experience. They wanted to make it easy for first-time users to be familiarized with their app. It’s pretty self-explanatory when you open the app but it still gives you a small tour once you’re inside.

You have all sorts of neat little tricks that make booking a ride easier. Users can save destinations and label them accordingly. Users can also choose what kind of car will pick you up in case you need extra room for luggage. Along with this, you can also see how much it will cost depending on the car you choose.

Above all this, the security safety included where you can click a single button and you’ll get 911 assistance is top of the line. You also get to share your trip with your loved ones so they can see where exactly are you. These extra safety precautions make sure that the customers have a smooth experience.

They prioritized user experience in developing this. That’s what got them ahead. They’ve innovated and made sure the customers had a great time.

6. Referral Program

When Uber started, people were skeptical. We were literally taught by our parents not to go into a stranger’s car and that’s what they were offering. People weren’t exactly instantly onboard with the idea.

What did Uber do?

Uber made a referral program to engage the market. Uber promoted that the drivers can give their friends a free ride on their first try. Naturally, people downloaded the app to get a free ride. This addressed the issue that people are getting into stranger’s cars because, in this scenario, they’re getting a lift from people they already know. Besides, it’s free! It’s better than a paid taxi with a stranger.

Because of this, customers got to try out the service and saw the security measures made by Uber to make sure they’ll be safe. Drivers, on the other hand, got incentives from Uber in the form of credits. The users then spoke about their experience in social media which helped in the digital marketing of the business.

This may not have translated into ROI at the start but it helped build brand awareness. This was the trust exercise that people needed to experience a new kind of public transportation.

7. Loyalty Program

As Uber grew into the million-dollar company that it is today, more and more customers became loyal to the brand. People now understood how easy and convenient it was to use Uber.

In response, Uber wanted to show their appreciation to these loyal customers. That’s why they came up with a loyalty program of their own.

To become a part of this loyalty program, a customer had booked at least a hundred Uber rides. These loyal customers had the privilege to access the highest-rated drivers. This signifies that Uber valued them and wanted to put them first.

It may not be such a big perk but as with any gift, it’s the thought that counts. Customers who get this perk know that Uber acknowledges their loyalty. That on its own is customer engagement. 

Frequently Asked Questions

What makes the uber digital marketing strategy stand out.

Uber is particularly famous for making the best of both it’s online and offline channels. While Uber generally does has good word of mouth promotion amongst other things, it’s Loyalty and refferal program are two things that definitely help them stand out.

What was Uber’s social media marketing strategy?

On social media, through word of mouth promotion as well as SMM, Uber has established quite the social media presence and image.

What was accomplished by Uber on campaigns?

Through effective use of digital campaigns on social media, Uber managed to grab attention and retain the same through thier quality service.

Conclusion — Uber Digital Marketing Strategy

Uber has dominated their digital marketing by making sure that its strategies and campaigns had 2 things. 

It had to be strategic and innovative. While Uber offers one of the most convenient services out there it’s brand’s growth hinged entirely on the Uber digital marketing strategy implemented.

They made sure that their campaign reached out to all kinds of people. They made sure that it was big and people can’t help but just talk about it. They made sure that it brought about innovation.

Daniel Martin

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Unlocking the Secrets Behind Uber Marketing Strategies

Uber is not an uncommon company today. The giant offers a wide range of transportation and delivery services through its mobile app. Not limited to just rides, users can also request food from their favorite restaurants, or send packages to destinations using Uber.

Uber is one of the most popular and influential companies in the transportation and delivery industry as its operations span over 72 countries and the company serves more than 110 million monthly active users, according to Statista . The research giant further quotes that Uber generated $32 billion in revenue in 2022, an 82% increase from the previous year.

The stunning success of Uber has pushed many entrepreneurs into the riding and delivery market. Are you one of them? If yes, then you need to go for a taxi booking app development solution .But before that, here is a learning guide on Uber marketing strategies so that you can plan not just development but also launching and the roadmap further to make your business a roaring success. 

Table of Contents

Uber marketing strategies

The marketing strategies of Uber have been quite proven to assure cash flow for the company. The company has terrifically struck users’ minds on a regular interval because Uber app marketing strategies keep improving in order to match the latest trends and demands. The sudden rise in use of latest automotive technology trends in day-to-day life has added to the cause. Here we present you the bespoke Uber marketing master plan techniques but additionally, you can go through a detailed guide on app monetization strategies in general.

Social media for brand awareness and customer loyalty

Uber has become a global transportation company through its excellent ride-hailing, food delivery, and freight transportation. The company smartly uses social media platforms like Instagram, X, Facebook, and YouTube to communicate with its users (passengers or foodies), drivers, and partners.

Here is how it engages users on social media to create brand awareness and loyalty:

• Uber shares engaging and informative content to showcase its services, products, features, and social values. For instance, the video posts of its driver stories, customer feedback, road or journey safety tips, and new initiatives on the Uber YouTube channel.
• The company responds to customer feedback, suggestions, and concerns in a timely and professional manner on social media. Uber has a dedicated X (earlier Twitter account) to handle customer service issues and provides instant solutions.
• Uber is excellent at creating campaigns and contests to encourage UGC (user-generated content) and word-of-mouth marketing. For instance, the company had launched the #WhyIRide campaign in 2016 wherein users were asked to share their reasons for using Uber on social media. In return, Uber offered prizes for the best entries. This campaign was viral.
• Uber strategically partners with social media influencers, celebs, and organizations that align with its brand image and values. As an example, Uber collaborated with UN Women in 2015 to pledge to create one million jobs for women as drivers.

Incentives and discounts to attract new customers and retain old ones

One of the key factors behind Uber’s success is its effective marketing strategy wherein it offers incentives and discounts to attract new customers and retain existing ones. The company uses several strategies to design these campaigns. Users of Uber would get many benefits such as referral and loyalty programs, discounted fares, promotional codes, and partnerships with other brands. These Uber marketing strategy methods help the company increase its customer base, improve its brand image, and generate more revenue.

Partnership and sponsorship

As a solid marketing strategy, Uber also partners with local businesses, sponsors, and events to offer convenient and affordable riding options for their customers and attendees. For example, the company gives discounts and promotions for rides to and from popular destinations like airports, restaurants, bars, malls, sightseeing places, monuments, concerts, festivals, and sports arenas. Uber also collaborates with event organizers to offer dedicated pickup and drop-off places wherein riders can easily get Uber drivers by avoiding traffic congestion.

Expanding into new markets and segments

Uber offers tremendous services in the transportation and delivery verticals; however, Uber’s marketing master plan has been expanding into new markets and segments by launching highly useful products and services that cater to the grave needs and preferences of all types of users and local markets. For instance, Uber has launched Uber Eats, a food delivery service that provides a one-stop platform where food lovers and local eateries and restaurants meet. Another venture, Uber Healthprovides non-emergency medical transportation for patients and healthcare providers. Likewise, other products and services offered by Uber as its marketing strategy include Uber Freight and Uber Air.

Investing in customer feedback and services

Customer service and feedback are essential for any business, and Uber knows this pretty well because it wants to lead a highly competitive and dynamic market. Uber invests in customer service and feedback smartly as it provides 24/7 support, offers attractive incentives and rewards, and implements required amendments based on customer feedback.

Uber is committed to providing 24/7 support to both drivers and riders through phone calls, emails, chats, and even social media platforms. Uber also houses a dedicated team of safety specialists who immediately attend to any emergencies and grave incidents.

About retaining its users and customers, for drivers, Uber offers flexible working hours, and tips, along with lucrative bonuses and insurance plus some education opportunities. For riders, the company has big discounts, coupons for low fares, referral bonuses, loyalty programs, and premium services. Uber is also keen to ask for suggestions from both drivers and riders through reviews, surveys, ratings, and reviews. The riding giant then analyzes the feedback and uses it to improve its products, services, policies, and processes.

The future of the Uber app

Uber has maintained its popularity as the best ride-hailing app that provides a common platform for drivers and passengers across cities around the world. The future of the Uber app is brighter because the company is quite conscious of several factors such as the regulatory environment, cutthroat competition in the riding and delivery industry, continuous innovation in products and services, and customer satisfaction.

Considering a successful business model, more and more entrepreneurs are inclined towards making an Uber-like app for cabs or taxis to venture into the riding and delivery sector. Uber-like clone app development could expand its services by including more modes of transportation like bikes, motorbikes, trains, scooters, buses, and in the future even flying taxis. Uber marketing strategies can be implemented according to local laws and regulations. The app must comply with stricter rules on safety, labor, and taxation, which may affect its profitability and growth.

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Ready for your own Uber-like app?

Since you know Uber’s marketing techniques and tactics, you have an idea of how to start a taxi business  through apps. It is time to build an Uber-like clone application for delivery and riding or you can go for developing an app from scratch depending on your business requirements and budget.

In whichever case, you can contact an offshore app development to discuss your idea and work on the feasibility. You can then finalize the taxi booking app development costs before giving a green signal to kickstart the project.

Frequently Asked Questions on Uber Marketing Strategies

Why is uber marketing successful.

Uber has embraced a holistic approach to cater to every stakeholder’s needs and concerns. The company not only provides the best products and services but also timely improves and braces itself to meet the ever-growing demands of users and market trends.

How does Uber attract customers?

Uber provides a one-stop solution for all ride-hailing services and deliveries. It provides irresistible rewards, coupons, and discounts timely and regularly to attract new customers and retain the old ones. Plus, Uber’s marketing strategy includes extensive use of social media platforms to spread good words about themselves.

What is Uber’s target market?

Uber has expanded its horizon to all the markets including ride-hailing, delivery, health, and the like. The company wants to tap every potential segment of the market or industry where there are fairer chances to grab opportunities and lead. While the company is already in several niches, it aims to tap more and more verticals to capture a larger customer base.

Why is the Uber app so good?

Uber has a simple yet highly engaging user interface that provides an unparalleled user experience to anyone who is browsing the application. Plus, the company regularly provides discounts, coupons, and other rewards to all its stakeholders such as drivers, riders, partnering companies, food lovers, restaurants, and the like. Since the app widely covers most cities across the world, users can rely on them wherever they are or go.

What factors make Uber successful?

Uber is a successful business today with no tangible products or properties by itself. Uber application is what has won everybody’s heart and thus has led the market in almost all countries. Highly engaging yet simple and attractive UI for UX, Uber master marketing plan and marketing strategies for user retention and attractive new ones, and top of all a win-win business model for everyone has made Uber a big shot in the segments it has ventured into.

The world is now very much compact, we call it Global Village as a result of digitization and this impresses him! He likes to explore the nooks and corners of the incessantly modernizing world and marvel technologies. He leads the Digital Marketing Team at Prismetric . His passion for digital trends taught him the knack of reaching the huge digital mass to find business opportunities instantly. He writes articles about digital, technical and marketing tactics for business enhancements.

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How to Exactly Comprehend Uber’s Digital Marketing Strategy

Lifestyle alterations in the mid-2000s caused the world to get dominated by mobile apps and being comfortable with fast-paced global formations, Uber has welcomed us into our lives with its controversial struggles since 2009 and boosted its brand awareness with digital marketing.

The ridesharing company owns a fleet of cars, SUVs, and independent vehicles that get themselves registered with Uber for being in the business. Uber ties up with cars and builds its fleet of cars. Plus, the subsidiary product provides meal delivery and has become more popular.

In more than 70 countries and 450+ cities across the globe, Uber operates; they have developed driving schools to inculcate good driving skills in the drivers who work under the company’s operational architecture. Because the business right now is booming, there are many car drivers who are ready to join the business, thereby resulting in an increased overall distribution presence.

Uber’s digital marketing strategy has not been to use traditional mass marketing methods like print, TVC, radio, or OOH but the company uses digital promotional activities to educate and engage with customers. They focused on putting a good product in front of their customers, for them to try it once and then come back again.

Social Media Strategy of Uber

Uber skillfully navigates the digital landscape by leveraging social media to spread its brand message and foster a sense of community among its users. Their social media strategy includes user-generated content, partnerships and collaborations, real-time engagement, promotions and offers, and storytelling. 

Each of these elements is critical in developing and maintaining a positive brand image, ultimately contributing to Uber’s success in the highly competitive ridesharing market.

User-Generated Content

Uber effectively utilizes user-generated content to create a sense of community among its users and to provide authentic testimonials about its services. By encouraging users to share their experiences with specific hashtags like #Uber and #UberRide , the company can easily aggregate and showcase positive user experiences.  Here’s an example of how Instagram users, this time a famous musician, generate content and post it with branded hashtags:

Bu gönderiyi Instagram'da gör Jasmine Choi 최나경 (@jasminechoi_flutist)'in paylaştığı bir gönderi

During the COVID-19 pandemic, Uber launched the #SafetyNeverStops campaign, asking users to share their experiences with Uber’s new safety protocols, which helped to build trust among potential users who were concerned about the safety of ridesharing during the pandemic.

Bu gönderiyi Instagram'da gör meg (@meganshortxx)'in paylaştığı bir gönderi

Partnerships and Collaborations

Partnerships and collaborations with celebrities and influencers have been a cornerstone of Uber’s social media strategy. By associating with popular figures, Uber is able to tap into their followers and increase its brand visibility. 

For example, Uber recently made a partnership with a famous American footballer, Sterling Shepard, and benefited from the power of storytelling to promote the brand:

Bu gönderiyi Instagram'da gör Uber (@uber)'in paylaştığı bir gönderi

Real-Time Engagement

Social media serves as a vital customer service tool for Uber, with platforms like Twitter being used to engage with customers in real time. First, they tweet about trends:

me today at the theater 😭 @nothnghppens @AMCTheatres pic.twitter.com/HMSDAAreeB — Uber (@Uber) October 12, 2023

Then, immediately reply to their followers:

Also, when users tweet their queries or complaints, Uber’s support team responds promptly, demonstrating the company’s commitment to customer satisfaction. All these strategies for real-time engagement help to build a positive brand image and foster customer loyalty.

Fun & Relatable Content

Uber sets itself apart from typical corporate businesses by embracing a more communicative and relatable approach to its content. The brand skillfully targets a diverse audience, including Gen Z and Millennials, through its presence on platforms like Instagram.

For instance, they share astrology-related social media content to generate buzz since most people share it with their friends:

Celebrating Special Days

From New Year’s Eve and Christmas to Halloween, Uber doesn’t miss out on celebrating special days and always catches the festive energy. By aligning their content with the festive mood of the season, Uber successfully connects with its users on a more personal and relatable level.

Advertising Strategy of Uber

Uber’s advertising strategy has consistently pushed the boundaries of traditional advertising by leveraging effectiveness and futurism to connect with its global audience. 

Through various platforms and mediums, Uber has effectively communicated its value proposition and built a strong brand identity. The company’s commitment to providing convenient, reliable, and innovative transportation solutions is evident in its advertising campaigns.

Effectiveness

Uber’s first TV ad, Effortless Night , spearheads the campaign “Where To?”, which also covers out-of-home, online, cinema, and press and will run for six weeks in the UK.

Uber – Effortless Night from Kim Gehrig on Vimeo .

Elvis Presley’s You’re the Boss adds its cool to the film, which was directed by Kim Gehrig and created by BBH London. The TVC was filmed in one shot, which meant that there were days of rehearsals to make sure the choreographed piece flowed across 60 seconds, that the story in each nightclub registered, and that it told the overarching story of an evening out and about made easy by Uber.

The ridesharing company revealed that they’re keen to utilize drone technology for the UberEats meal-delivery service and was accidentally by a job ad posted on WSJ, titled “flight standards and training”. The position is based in the company’s home city of San Francisco.

Following an inquiry by the Journal, Uber took down the listing from their website, but at the time of writing, it can still be viewed here on LinkedIn. A spokesperson at Uber said only that the posting “doesn’t fully reflect our program, which is still in its very early days”.

The ad says the primary focus of the role is to develop “standards, procedures, and training while scaling down the operational risk for all UberExpress flight operations.” UberExpress is the internal name used for the company’s drone-based plan.

Seo Strategy of Uber

By leveraging various SEO techniques, such as keyword optimization, mobile optimization, local SEO, content marketing, and link building, Uber has successfully enhanced its web presence and cemented its position as a leader in the ridesharing industry. If you want to develop a successful SEO or digital marketing strategy in general, don’t forget to check out our curation of top digital marketing agencies !

Keyword Optimization

In order to improve its online visibility and attract more users, Uber meticulously researches and identifies relevant keywords that potential users might use when searching for ridesharing services. These keywords are then incorporated into the content on Uber’s website and app, helping to improve the platform’s search engine ranking for those specific terms.

Mobile Optimization

With a significant portion of Uber’s users accessing the service through its mobile app, Uber ensures that its app is fully optimized for mobile devices. This involves ensuring that the app provides a seamless and user-friendly experience, with fast loading times and easy navigation, thereby enhancing user satisfaction and retention.

Uber places a strong emphasis on local SEO to ensure that its service appears in search results for specific locations. By optimizing its website and app content for location-specific keywords and ensuring accurate and consistent business listings across the web, Uber is able to effectively target users in specific geographic areas.

Content marketing is a key aspect of Uber’s SEO strategy. The company creates and shares valuable, relevant content that is tailored to its target audience.

This includes blog posts, as you can see above, and videos that provide helpful information about the service, tips for drivers and riders, and updates on new features or promotions. This content is optimized for search engines and helps drive organic traffic to Uber’s website and app.

Link Building

Uber works diligently to build high-quality backlinks from reputable sources such as news outlets, blogs, and industry websites. These backlinks are crucial in improving the platform’s domain authority and search engine ranking, thereby increasing its visibility and attracting more users.

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Please note you do not have access to teaching notes, uber pricing strategies and marketing communications.

Publication date: 23 May 2014

Teaching notes

By late March 2014, the ridesharing company Uber was on a roll, rapidly expanding service to untapped markets and gaining new, enthusiastic customers, as well as a few vocal and visible detractors. Uber’s innovative organization of the supply-demand matching process produced eager customers who recruited others. Buzz marketing and aggressive recruitment of drivers augmented growth.

This case presents Uber as an example of a middleman adding real value for consumers and upstream suppliers (limo drivers). Unlike Tesla, which battled to sell cars directly to the public, Uber created value by adding a layer between limos and prospective riders, organizing the market for convenience and transparency for both sides. Where Uber stirred up the competitive equivalent of a hornet’s nest was with expansion from the livery car market into the taxi service market with UberX. The material allows for a lively discussion around disruptive digital technology and the firm’s business model.

Weiler, V. , Farris, P. , Yemen, G. and Ailawadi, K. (2014), "Uber Pricing Strategies and Marketing Communications", . https://doi.org/10.1108/case.darden.2021.000028

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Copyright © 2014 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.

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How Uber Is Building A New Age Of Intelligent Customer Experience

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By: Vicky Katsabaris, Director of Experience Management Solutions and Strategy, APJ, Qualtrics

As organizations continue to adapt to the changing world around us, every single business and government has a momentous opportunity to take the customer and employee experiences they deliver to an entirely new level.

During Qualtrics’ XM Live: Succeeding in the Age of Experience Transformation , we were privileged to get a rare glimpse into how iconic brands are building experience-centric organizations to drive business outcomes and success.

Uber is famous the world over for transforming the customer experience in the rideshare and food delivery industries. But like nearly every organization across the world, the pandemic challenged Uber to rethink how to make engagements easier and safer for customers, drivers and employees.

The solution to this challenge, according to Maisie Lam, Head of Customer Experience for Uber in Australia and New Zealand, was removing friction from the customer experience — not always an easy task when you have hangry customers.

“A negative peak or an end to an experience can completely bias a customer’s judgement. It means you need to know where in your users’ experience there is negative friction, or even positive peaks and resolutions,” Lam said.

Using insights and behavioral science to remove friction

Using behavioral science powered by insights from across the customer journey, Uber focused its efforts on removing friction from the customer journey to build a customer experience that was simple, intuitive, quick and easy. From using insights to improve the in-app help center for customers and riders, to identifying how it could optimize its Chat Support, Uber identified issues impacting its customer experience, and then took quick, targeted, meaningful action. The result has been a continual improvement to the company’s customer satisfaction across various channels.

A key pillar in Uber’s experience transformation is being aware of the bias blindspot.

“We can easily recognize the impact of biases on other people’s behavior and judgements, but we are very poor at noticing the impact of biases on ourselves,” Lam explained.

“It’s easy to underestimate the impact of a change in the context of your customers and support staff. And it’s easy to assume you understand user or agent experiences based on your own experience.”

“This means you need to be aware of cultural contexts when big change happens — in fact, this needs to be front and center of planning. You need to be conscious of the risk this change presents to the support channel. Using behavioral science and insights into your customer experience will help you diagnose where behavioral friction may be present.”

Driving continuous innovation

Uber’s constant desire to innovate by designing and continually improving experiences for customers’ and employees’ changing preferences and behaviors is why the company is a leader in the various sectors it operates. And it’s all possible because Uber is continuously listening and responding to the needs of the people it serves.

Find out how Uber is using data and insights to inform its business decisions by watching the full session from XM Live .

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Uber Case Study: from Startup to Global Mission

by Bharat Arora · Updated on October 9, 2023

TABEL OF CONTENTS

• Introduction

From Humble Beginnings to Global Domination

• The Disruptive Wave: Challenges for Traditional Industries

Business model

Understanding the business, sharing economy business model, uber vs. regular taxi: how passengers meet drivers, introduction for uber case study:.

In 2009 a revolutionary idea was born on the streets of San Francisco.

An idea that will redefine urban mobility and challenge the non-functionality of traditional transportation.

This was the beginning of Uber, a startup that would soon become a popular name across the world.

But how did a simple app achieve such huge success in a relatively short period of time?

And what were the subsequent effects of its unique approach on established industries?

Let’s dive in deeper about the Uber Case Study.    

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When Travis Kalanick and Garrett Camp first started with Uber, it was out of a personal need: finding a reliable ride in the city.

Little did they know, this seed of an idea would sprout into a tech giant, now valued at billions.

In its early days, Uber was a luxury service, offering rides in high-end vehicles. But as the company grew, it adapted, monetized, and expanded its services while meeting the needs of a broader audience. UberX, UberPOOL and Uber EATS are just a few examples of how the company continues to innovate to meet the diverse needs of its users.

Unique business ideas: Challenges for Traditional Industries

As Uber began to gain success, it wasn’t just the transportation industry that felt losing customers due to the competition.

Traditional business models across various sectors were suddenly under trouble, being compared to this new, agile approach that Uber represented.

The company didn’t just offer rides; it offered convenience, efficiency, and a user-centric experience, all come in a mobile app that is available on the Google Play Store and Apple Store .

But innovation comes with its unique challenges. Taxi unions, regulators, and even some users were skeptical and, at times, openly hostile to the changes Uber brought.

Cities like London, Paris, and New York saw massive protests, with taxi drivers voicing their concerns about this new player in the market

However, what truly sets Uber apart was its ability to leverage technology and data, continuously refining its services based on customer feedback and behavior.

What is Uber’s business model?   Is it sustainable?

Uber operates under a platform-based business model, often referred to as the “sharing economy” or “peer-to-peer” model.

Here’s a breakdown:

• Platform-based model: Uber acts as an intermediary between drivers (service providers) and passengers (customers). who doesn’t own a vehicle; instead, it partners with drivers who use their own cars.
• Flexible pricing: Uber uses an algorithmic pricing model in which fares can change based on real-time supply and demand. This  often happens during peak hours or during unfavorable weather conditions, known as “surge price.”
• Cashless transactions: Payment is made through the app using a credit card and debit card, making the process seamless for  drivers and passengers.
• Feedback and Rating system: After each trip, drivers and riders will rate each other. This ensures a level of quality control and trust within the platform.
• Diverse services: Uber has diversified its services over the years.From luxury rides (Uber Black) to economical options (UberX) to carpooling (UberPOOL), it meets a variety of customer needs. In addition, it also expanded into other areas such as food delivery using UberEats.
• Global presence: Uber operates in many cities and countries around the world, adapting to local regulations and market conditions.

Is it sustainable? 

The sustainability of Uber’s business model has been a topic of debate for many reasons:

• Regulatory challenges: Uber has faced regulatory hurdles in many cities and countries. Traditional taxi services have protested against Uber, leading to bans or restrictions in certain areas.
• Financial concerns: As of my last update in January 2022, Uber has yet to achieve consistent profitability. Although revenue is significant, the company still spends heavily on promotions, driver incentives and expansion efforts.
• Reputation management: Uber has faced criticism and negative publicity on many fronts, from safety concerns to corporate culture issues. Addressing these concerns is critical for its long-term sustainability.
• Competition: In many markets, local competitors (such as Ola in India, Didi in China, and Lyft in the United States) are challenging Uber. These competitors often have a better understanding of local market and can offer stiff competition.
• Relationship with the driver: Classifying Uber drivers as independent contractors rather than employees has been controversial. Drivers’ desire for better pay and benefits has led to legal battles in some areas.
• Diversification: On the positive side, Uber’s diversification into areas such as food delivery (UberEats) and freight (Uber Freight) could provide additional revenue streams and enhance the company’s sustainability.

A unique Business model with sharing economic approach – The term “unique” in the business context refers to innovations that significantly change industries and markets, often displacing long-standing, market-leading companies, products, and alliances.

Uber’s business model proves this definition. Instead of following a traditional asset ownership model  (like a taxi or fleet), Uber relies on a “sharing economy” approach.

• Sharing economy:  At its core, the sharing economy is a social-economic system built around  sharing resources. This is usually a platform that makes it easy for you to borrow or rent assets owned by others.  In Uber’s case, that means connecting drivers willing to share their personal vehicles with passengers looking for a ride.
• Asset-Light model: One of the main advantages of this approach is that Uber does not incur the costs and liabilities associated with owning a fleet of vehicles. Instead, it focuses on maintaining and improving the platform that connects drivers and riders.
• Win-win scenario:  Drivers have the opportunity to work on their terms and earn money using the asset they already own (their car), while riders benefit from convenient and more affordable transportation option.

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A click from the nearest available car

The easy to use and immediate services of Uber are unbelievable in comparison with the traditional taxi industry

With the Uber app:

• Instant access: Users can hail a ride with just a few taps on their smartphone. The application interface displays the number of available vehicles in real time, helping users know the distance of the nearest driver.
• Transparent prices:  Before confirming a ride, users get an estimated fare, ensuring there are no surprises at the end of the trip.
• Real-time tracking:  Once a ride is booked, users can track the driver’s progress to their location and get an estimated time of arrival.
• Cashless transactions: The entire payment process is managed in the app, eliminating the need for cash and making the end of the ride smooth and hassle-free.

Serves All Age Groups and backgrounds

Uber’s appearance is not limited to a specific demographic. Its user-friendly design and diverse services offering target a wide range of audiences:

• For young and tech-savvy people: The convenience of booking a ride via a smartphone app attracts the younger generation,who are used to digital solutions based on their needs.
• For the elder: Even for those who aren’t tech-savvy, Uber makes an effort to make its platform accessible. Features like the ability to book a ride for someone else or the ability to hail a ride without an app in certain areas are aimed at older users.
• Diverse Service Range:  Whether it’s a luxury car service (Uber Black), a economical ride (UberX), or a carpooling option (UberPOOL), there’s something for everyone, regardless of  budget or preference. what they like.
• Wide range of services: Uber has also taken steps to ensure its service is inclusive. Features like Uber WAV (wheelchair accessible vehicle) and efforts to provide services to undeserved areas demonstrate their commitment to meeting all walks of life and needs.

Provides Financial and Economic Value

The sharing economy’s primary allure lies in its ability to unlock significant financial and economic value:

• Optimized Resource Utilization : Traditional business models often involve underutilized assets. For instance, a car might sit idle in a driveway for hours or a room might remain vacant in a house. The sharing economy taps into this dormant value, allowing individuals to monetize these underused assets by renting or sharing them.
• Cost Savings for Consumers : By bypassing traditional middlemen and infrastructure costs, services in the sharing economy often provide more competitive pricing. For example, staying in an Airbnb can be cheaper than a hotel, and using platforms like Task Rabbit can offer affordable services compared to established businesses.
• Economic Stimulus : The sharing economy injects money into local economies. Hosts, drivers, or service providers earn directly from their assets or skills, often supplementing their primary income sources.

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Attracts Investors

The potential and rapid growth of the sharing economy have not gone unnoticed by the investment community:

• High Valuations : Companies operating within the sharing economy, like Airbnb, Uber, and We Work, have achieved multi-billion dollar valuations in relatively short time frames.
• Venture Capital Influx : The innovative nature and scalability of sharing economy platforms have attracted significant venture capital. Investors see the potential for high returns, especially if these platforms can achieve dominant positions in their respective markets.
• Future Potential : As technology continues to evolve and more sectors become ripe for disruption, investors anticipate that the sharing economy model will permeate even more industries, offering further investment opportunities.

Fast Growing Industry

The sharing economy’s growth trajectory has been nothing short of meteoric:

• Rapid Adoption : The convenience, cost-effectiveness, and user-centric design of sharing economy platforms have led to swift adoption rates among consumers. Many people now prefer to hail a ride on Uber or rent a vacation home on Airbnb rather than use traditional services.
• Global Expansion : While the sharing economy began primarily in Western countries, its reach has quickly expanded globally. Markets in Asia, Africa, and South America are experiencing surges in sharing economy platforms tailored to local needs.
• Diverse Sectors : Initially, the sharing economy was most prominent in sectors like transportation and accommodation. However, its principles are now being applied to diverse areas, including finance (peer-to-peer lending), fashion (clothing rentals), and even agriculture (equipment sharing).

Uber’s Financial Value and Revenue:

• 2014: Uber reported a net revenue of $400 million.
• 2015: Uber’s net revenue surged significantly, reaching approximately $2 billion.
• 2016: The company’s growth trajectory continued with a net revenue of around $6.5 billion.
• 2017: Uber’s net revenue reached $7.5 billion, marking a steady increase.
• 2018: The revenue figures for this year stood at approximately $11.3 billion.
• 2019: Uber reported a net revenue of around $14.1 billion.
• 2020: Despite the challenges posed by the COVID-19 pandemic, Uber managed a net revenue of about $11.1 billion.
• 2021: The company’s net revenue rebounded to approximately $15 billion.
• 2022: As of the latest data, Uber’s net revenue is projected to be around $16.5 billion.

Uber Driver Earnings:

• 2014: Drivers could earn up to $20 per hour.
• 2015-2016: The earnings for drivers remained relatively stable, with many reporting earnings in the range of $18 to $25 per hour, depending on the city and demand.
• 2017: Some reports suggested that driver earnings slightly decreased to an average of $17 to $23 per hour.
• 2018: With more drivers joining the platform and increased competition, the average hourly earnings hovered around $16 to $22.
• 2019: Driver earnings saw a slight uptick, with many earning between $17 to $24 per hour.
• 2020: The pandemic impacted driver earnings due to reduced demand, with many drivers reporting earnings of $15 to $20 per hour.
• 2021: As the demand for ride share services began to recover, driver earnings ranged from $18 to $25 per hour.
• 2022: The latest data suggests that drivers can earn anywhere from $19 to $26 per hour, depending on factors like location, time of day, and promotions.

It’s essential to note that these figures are approximate averages and can vary based on several factors, including location, demand, promotions, and individual driver performance.

Attracts Investors:Since its founding,Uber has attracted investors and significant attention from the venture capital community.

Its innovative approach to transportation and  rapid growth have made it a top candidate for investment.

• Valuation:Uber’s value has skyrocketed over the years. In 2015, it was valued by investors at a staggering $51 billion, making it one of the most valuable startups in the world at the time.
• High-Profile Investments:Several leading companies soon realized Uber’s potential and decided to invest.These include:

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Menlo Ventures:An early-stage venture capital firm that has backed several successful technology companies.

Google Ventures (GV): AlphabetInc’s venture capital arm.  (Google’s parent company) has invested in Uber, strengthening its position in the technology industry.

Fidelity:A multinational financial services company saw the potential benefits of Uber’s growth.

BlackRock:Another major global investment management firm has backed Uber.

Fast-Growing Industry:Uber’s impact on the transportation industry is undeniable. Its growth metrics reflect the success and  demand for its services.

Daily Trips: According to the latest data, Uber makes an average of 25 million trips per day. This number shows the  scale of the company’s operations and the level of trust users have in the company’s services.

Total Trips:Since its founding in 2010, Uber has facilitated  42 billion trips worldwide. This number not only highlights the company’s growth but also its global reach and acceptance.

It’s important to note that while these numbers provide insight into Uber’s growth and investor interest, the company’s journey has been filled with challenges, controversies, and competition.

However, its ability to attract investors and its rapid growth in the industry have highlighted its importance in the sharing economy and the transportation sector more generally.

  Type of services from uber

Uber black:.

• Description: Uber Black is the company’s original luxury service. It offers riders  a more premium experience than standard services.

Vehicle Type: High-end black luxury sedans often come from brands such as Mercedes-Benz, BMW or Audi.

Registration & Insurance: All Uber Black vehicles are commercially registered and insured, ensuring a higher level of safety and professionalism.

Driver Requirements: Uber Black drivers typically have professional driving experience and are expected to provide a higher level of service.    

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• Description:The Uber SUV is similar to the Uber Black but offers a larger vehicle for those who need more space.

Vehicle Type: High-end black luxury SUVs like Cadillac Escalades or Lincoln Navigators.

Registration & Insurance: Like Uber Black, all vehicles are commercially registered and insured.

Capacity: Designed to accommodate larger groups or passengers with more luggage.

• Description: UberX is Uber’s  most popular and standard service, providing affordable rides for everyday use.

Vehicle Type:Typical everyday cars, which can range from a Toyota Prius to a Honda Accord. Model year requirements varies by city, but  generally it’s a 2000  or newer model (in some cities, 2005 or newer).

Driver Requirements Drivers must have a clean driving record and pass a background check.

Vehicle Requirements: Specific car brands and models are accepted, and vehicles must be in good condition.

• Description: Uber XL is designed for larger groups, offering vehicles with more seating capacity than UberX.

Vehicle Type: Larger vehicles like minivans or SUVs.

Capacity: Can comfortably fit 6 passengers or more.

Pricing: While it’s priced higher than UberX due to the larger vehicle size, it’s still more affordable than the luxury options.    

Uber Select:

• Description: Uber Select is a mid-tier luxury service, offering high-end cars without the premium price of Uber Black.

Vehicle Type: Luxury sedans and SUVs, but not as high-end as Uber Black or SUV.

Availability: Only available in select cities.

Pricing: Positioned between UberX and Uber Black in terms of pricing.

• Description: Uber Pool is a carpooling service, allowing passengers to share rides with others heading in the same direction.

Shared Rides: Passengers share the vehicle with others, making stops along the way to pick up and drop off.

Pricing: It’s cheaper than UberX since the cost is split among multiple passengers.

Availability: Only available in select cities and often in high-demand areas.

It’s important to note that the availability and specifics of these services can vary based on the region and local regulations. Always refer to Uber’s official website or app for the most up-to-date information for a specific location.

• Digital Convenience:  With Uber, the entire process is digitized. Customers use the Uber app to request a ride. Once the ride is confirmed, they can track the driver’s location in real time and know the estimated arrival time.
• Feedback system:  After the ride, customers can rate the driver, providing a feedback loop that helps ensure service quality.

Regular Taxi:

• Traditional Hailing:  Traditionally, customers hail a taxi on the street by waving or hailing an available taxi.
• Book in advance by phone:  They can also contact the taxi company in advance, who will then send the driver to the designated location. This method often requires waiting and lacks Uber’s real-time tracking feature.

Driver Options

Flexibility: Drivers use their own car, eliminating the need for a dedicated taxi license in many areas. This has democratized access to the ride-sharing economy, allowing more people to make money without large initial investments.

Regular Taxi: License: Traditional taxi drivers often require a specific taxi license to operate. It can be theirs, or they can rent one.

Dispatch service:  Many taxi drivers pay a monthly fee to a dispatch service, which provides them with booking services.  Some drivers also rent both the car and the license, which increases their overall costs.

Financially Interested Parties

Simplify stakeholders:  The main stakeholders are Uber itself (which receives a commission on each trip), the drivers, and the investors who funded Uber’s operations and growth.

Complex ecosystem: The traditional taxi model has involves many stakeholders, including  licensing agencies that manage and issue taxi licenses,  taxi companies that might own and operate fleets, individual drivers, and taxi license holders who might lease their licenses to other drivers.

The impact of the Uber model on the typical taxi industry and its key partners.

• Passengers benefit from greater reliability and convenience: With Uber, passengers have witnessed a paradigm shift in the way they hail and use transportation services. The Uber app offers real-time tracking, estimated arrival times, and transparent pricing. Passengers no longer have to stand on street corners waiting for a taxi to pass.  Instead, you’re just a few clicks away from a reliable ride, often with shorter wait times than traditional taxis.
• Drivers have higher income by Moving to Uber: Many drivers have reported higher incomes after leaving traditional taxi services for Uber. The flexibility to choose their own schedule, coupled with flexible pricing during periods of high demand, allows them to maximize their revenue.  Additionally, paying directly through the app eliminates the risk of unpaid tickets.
• Taxi companies are losing revenue:  Traditional taxi companies have faced a significant decline in revenue  due to the rise of ride-sharing platforms such as Uber. The convenience and often lower prices offered by Uber have caused many drivers to  switch, leaving taxi companies with fewer customers and reduced revenue.
• Loss of license validity: In many cities, taxi licenses (often called “medallions”) were once very valuable, sometimes costing hundreds of thousands of dollars. However, with the advent of Uber and other ride-sharing platforms,  demand for these licenses has decreased, causing their value to drop significantly.
• Licensing agency loses sales revenue due to reduced license value: As the value of taxi licenses declines, licensing authorities face a decline in revenue from selling and renewing these licenses. With fewer individuals and businesses interested in purchasing taxi licenses, these authorities have seen  their revenue sources streams.

Management: How does Uber manage Two sides of its market?

Two-way market:

Uber operates in a two-sided market, connecting drivers (supply side) and riders (demand side).

Managing this balance is crucial. Too many drivers and not enough riders can lead to driver dissatisfaction, while too many riders and not enough drivers can lead to long wait times and unhappy customers. Uber uses surge pricing  to manage this balance, raising prices at times of high demand to attract more drivers and vice versa.

Two groups of agents  interact through a “platform”, where one group’s benefit from joining the platform depends on the size of the other group joining the platform.  -Armstrong M. Regulatory approach

What do you think about Uber’s soft approach to regulation?

Uber’s business model has unique characteristics that make it difficult to classify the company into a specific industry.

Technology is at the heart of the network,delivering an unprecedented breakthrough model.

Uber has faced  criticism and backlash from taxi corporations, but has received praise and support from  customers.

By exploiting their position as a disruptive innovator, they have placed themselves in a position to influence the public.

In 2014, Uber hired David Plouffe to lead the company’s communications and public policy department.

Regulatory approach:

What’s the verdict on Uber’s cowardly approach?

Uber’s entry into the transportation market is nothing short of a revolution. But  innovation often comes with controversy, especially when it challenges established standards and regulations.

• Unique Business model:  Uber’s business model has blurred the lines between traditional taxi services and technology platforms. By positioning itself as a technology company that connects riders with drivers rather than a transportation service provider, Uber is operating in a regulatory gray area.  This has made it difficult for regulators to classify and manage companies within existing frameworks.
• Disruption at Its Core:At the heart of Uber’s model is technology.  By leveraging smartphones, GPS, and data analytics, Uber has introduced an unprecedented disruptive model to the transportation industry. This technological approach not only brings convenience to users but also poses significant challenges to traditional taxi services and regulators.
• Mixture of reactions: Although Uber has faced  criticism and backlash from taxi groups and some regulators, it has been praised by  users. The convenience, transparency, and generally lower costs associated with this platform have made it a favorite among runners.  This response dichotomy highlights the tension between innovation and regulation.
•  Exploiting the position of disruptive innovators:  Uber’s strategy isn’t just about providing rides. By positioning itself as a disruptive innovator, the company has achieved significant public influence. This influence often helps shape public opinion and, in some cases, even management decisions.
• Recruitment strategy in 2024: In an effort to strengthen its position and navigate the complex regulatory landscape, Uber hired David Plouffe in 2014 to lead the company’s public policy and communications department. Plouffe, with his political acumen,is seen as a strategic addition to Uber’s team, helping the company interact more effectively with regulators and stakeholders.

Safety Concerns and Challenges:

• Incidents related to False documents:  One of the biggest concerns that has emerged over the years has been incidents involving Uber drivers using false documents. There have been cases of drivers successfully passing Uber’s background checks using false or borrowed documents. Such incidents not only raise questions about the platform’s verification process but also pose potential risks for riders.
• Uber’s proactive response to security concerns: Uber quickly recognized its security concerns and took a number of steps to address them. The company has continuously developed its background check procedures, cooperated with law enforcement, and invested in driver safety training.  Uber’s commitment to safety is evident through its efforts to improve safety procedures and respond to feedback from passengers and drivers.
• Advanced security features: Uber has introduced several safety features to keep rider and drivers safe:
• Real-time identity check:  Periodic prompts driver to take a real-time selfie before accepting a ride, ensuring that the driver is using the app that is appropriate for the account holder.
• Driver profile:  Riders can view detailed profiles of their drivers, including ratings, compliments and number of trips taken.  This transparency allows riders to know more about the person driving them.
• Two-factor authentication:  To prevent unauthorized access, Uber has implemented two-factor authentication for its drivers. This additional layer of security ensures that only registered drivers can access the app.

The future of Ride sharing

The world of transportation is changing rapidly, and ride-sharing services, led by Uber, at the forefront of this transformation.

Traditional transportation methods are being challenged as consumers seek more convenient alternatives.

In 2019, the mobility market saw significant advancements, including record electric vehicle sales  records and regulations promoting shared mobility.

Global automakers have faced challenges such as stricter emissions regulations and trade tensions. Uber’s journey offers a insights into the future of ride-sharing.

Adapting to regulations, technology and consumer preferences will be essential.  By 2030, there is a huge opportunity for ride-sharing platforms, with highly connected vehicles worth between $450 billion and $750 billion.

Uber’s journey resembles disruptions in other industries, such as digital streaming vs. cable TV and online marketplaces vs brick-and-mortar stores.

Survival depends on the ability to adapt.

Uber identified gaps in the taxi model, used technology to fill them, and expanded rapidly.

This success demonstrates the power of innovation.

In short, the future of ride-sharing services led by Uber looks promising. As technology evolves and consumer preferences change, flexibility and adaptability will be critical.

Traditional industries may view these changes as threats or opportunities; the choice is theirs.    

Uber’s journey is a testament to innovation and adaptability in today’s rapidly evolving digital world.

Despite legal battles & internal problems, Uber has thrived, expanding to 737 cities in 84 countries, and providing more than 5 billion rides.

This shows his resilience. In the era of digital transformation, businesses must innovate to avoid obsolescence.

Uber has leveraged technology to disrupt the taxi industry, focusing on user-friendly applications and customer convenience.

However, achieving profitability remains a challenging. This emphasizes the need for adaptability.

In short, Uber’s journey highlights the importance of resilience, innovation, and adaptability.

At Protocloud Technologies , we provide website and mobile application development services.

We can help entrepreneurs and small business owners create a ride-sharing app like Uber, allowing them to successfully navigate a growing market.

Global Ride-sharing Trends

Passenger experience with uber, peer-to-peer business model, ride-sharing app development, ride-sharing future trends, ride-sharing revolution, sharing economy, two-sided market strategy, uber business model, uber financial growth, uber vs traditional taxi, uber's global impact, uber's regulatory challenges, bharat arora.

I'm Bharat Arora, the CEO and Co-founder of Protocloud Technologies, an IT Consulting Company. I have a strong interest in the latest trends and technologies emerging across various domains. As an entrepreneur in the IT sector, it's my responsibility to equip my audience with insights into the latest market trends.

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Privacy Overview

Understanding Uber’s Digital Marketing Strategy

3 min remaining

The mid-2000s saw a shift in lifestyles that led to the rise of mobile apps. Being comfortable with global formations and a fast-paced world, Uber has welcomed us into our lives since 2009 with its controversial struggles.

The ridesharing company has a fleet that includes cars, SUVs, and independent vehicles. To be in business, they must register with Uber. Uber has partnered with car and manufacturing companies to provide its cars. The subsidiary product, which delivers meals, has become more popular than the single firm.

Uber has been operating in more than 70 countries and 450+ cities around the world. They have also developed driving schools to teach drivers good driving skills.

Uber’s marketing strategy does not include traditional mass marketing methods such as radio, TVC, print, and TVC. Instead, the company uses digital promotional tools to educate and engage customers. They wanted to offer a great product that customers could try once, and then return.

Let’s take a look at their global marketing strategies.

• Effective: Effortless Night 

Uber’s first TV ad is Effortless night. It spearheads the campaign Where To? This campaign also covers cinema, out-of-home, and online, and will run for six consecutive weeks in the UK.

The film was directed by Kim Gehrig and produced by BBH London. Elvis Presley’s You’re the Boss adds coolness. It was shot in one take, so there were many rehearsals to ensure that the choreographed piece ran across 60 seconds. Each nightclub story was registered, and the TVC told the overall story of an Uber-facilitated evening.

• Futuristic: UberEats Flying Burgers

Uber Eats wants to incorporate technology into its meal-delivery service. They plan to launch their first drone in 2021.

A ridesharing company stated that they are keen to use drone technology for Uber Eats meal delivery service. This was accidentally revealed by a job ad on WSJ, entitled “flight standards training”. This position is located in San Francisco, the company’s hometown.

Uber removed the listing from their website following an inquiry from the Journal. However, the listing can still be seen here on LinkedIn as of this writing. Uber spokesperson said that the listing “doesn’t reflect our program” as it is still very much in its early stages.

The job description states that the primary focus is to create “standards and procedures” while reducing operational risk for all UberExpress flight operations. UberExpress refers to the company’s drone-based plan.

• Innovative: UberAir

There have been some amazing tech news at Web Summit Lisbon this year. Here’s the best: Flying Taxi Software from Uber and NASA.

Jeff Holden, Uber’s chief product officer, announced that they had signed a contract to make ” flying taxis ” a reality.

It is believed that the incredible service will be launched in Los Angeles in 2020.

They describe urban air transportation as using three-dimensional airspace to reduce congestion. This network of small electric aircraft, which take off and land vertically, is called VTOL (pronounced veet-ol) and will provide safe and quick transportation between cities and suburbs.

The Summit presented an example that showed how ‘flying taxis would transform an 80-minute-journey in rush hour traffic into a shorter than 30-minutes journey.

In terms of software development, NASA and ” UberAir “, will be in good hands.

About the author

Kobe Digital is a unified team of performance marketing, design, and video production experts. Our mastery of these disciplines is what makes us effective. Our ability to integrate them seamlessly is what makes us unique.

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How Uber delivers exceptional customer experience with ML

Brands around the globe, big or small, are giving it all they got, going over and beyond for their customers. They know that their business is as successful as their least satisfied customer.

When your business is serving customers in 6000 cities, in 64 countries and millions of riders, you have to make sure you live and breath customer satisfaction. Uber, the global tech leader in ride-sharing, can teach us a thing or two with how they manage to keep all their riders and drivers happy.

We’ve previously featured a portion of Uber’s case study in an article about the transformation of customer experience in the digital era and the methods global brands are using to put a smile on their customers’ face.

The digital era brings in technology that allows us to obtain large masses of customer data about their preferences, behaviours and pain points, analyse them using AI and ML and get super-specific insights about how to mould our products and services accordingly.

And Uber knows how to put machine learning to work to delight their customers.

In an interview for Hyperight, Ritesh Agrawal, Tech Lead Manager at Uber, highlighted Uber’s ML-based features that help to enhance riders’ experience :

• Personalised destination suggestions based on ride history and frequently travelled destinations.
• One-Click chat – a smart reply system which allows riders and drivers to communicate easily with in-app messaging. The system uses machine learning and NLP to anticipate responses to frequent riders’ questions. Drivers can reply with just one click of a button.
• Bridging the supply-demand gap – Uber’s system predicts time periods and area are going to have increased demand and alerts drivers accordingly. Meeting the demand in pick hours helps Uber keep customers happy and increase its customer retention rate.

But one of the crucial applications of AI and machine learning at Uber is detecting and resolving user experience incidents in order to make sure their app is up-and-running and reliable at all times.

Rolling out changes like the “Fast and Furious”

Ritesh Agrawal and Anando Sen delivered their story about how Uber scales fast and furious , but safely at a very distributed marketplace, as well as the challenges they come across and the constant changes they are making to make both drivers and riders happy.

Every day, hundreds of thousands of people rely on Uber to get to work, commute or make their daily livelihood by driving for Uber, highlights Anando. This is why Uber has taken their job seriously with detecting user issues and fixing them as fast as possible while doing it in the safest possible way.

Every month Uber does 1,200 code changes and 22,000 configuration changes which allow the app to be tuned for every city it runs in. However, rolling out changes to the app, distributed systems and infrastructure with great velocity causes reliability issues.

To measure if the app is reliable at all times, Uber measures three KPIs:

• Availability – were riders able to hail a ride and complete a trip.
• Latency – the time needed to go through the entire process of calling a ride, the system flow, the screen transition, the tabs functionality.
• Accuracy – of the information, the map, price, discount.

Anando states that there’s a strong correlation between the speed at which changes are delivered to the users and their overall service reliability.

Tackling user-facing incidents

The most important thing out of this correlation is Uber’s ability to detect user-facing incidents and to attribute them back to their code or configuration, get people to fix them, and roll out mitigations fast and furious. 

“The time to detect and time to resolve an incident should be among the main company’s KPIs”, advises Anando. However, solely recognising the issue is not enough.

If they detect issues at the beginning of their data pipeline, the cost is nearly non-existent, he explains. When the issues are detected in the rollout phase, the costs start rising. This is why it’s crucial to move, detect and resolve fast to reduce the blast radius of users’ bad experiences, – instead of 1 million users affected, reversing it to 10,000 users.

From a data scientists point of view, Ritesh focuses on transforming such a vague problem, as an incident, into a concrete, actionable item.

When they looked closer at the incident reports to try to understand the source of error, they discovered that 40% of all incidents are code-related changes, but 20% are configuration-related changes. The problem arises in the disconnect between the person who builds the code and configurations, and the city operations teams that are applying the configuration changes.

Delivering Changes to a Globally Distributed Marketplace – Ritesh Agrawal, Uber and Anando Sen, Uber

As it operates in more than 64 cities, the Uber app is customised with different product choices depending on the location. For example, the vehicle choice for San Francisco is an e-bike, whereas, in Delhi, the app offers auto. The product choice that appears for each city is driven by configurations. Additionally, promotions and maps of each city are enabled by configurations.

As Ritesh explains, the biggest benefit of configurations is that it allows creating a global app, but optimises it for local city performance. On top of that, it provides experimentation capabilities. 

However, it doesn’t come free from challenges. Configurations are hard to review, states Ritesh, because they are immediately rolled out. Each change in the configuration is applied to all app users around the world. And consequently, if there is an error with configuration, it will be rolled out with the update.

To take control, they started thinking about building an ML solution that will automatically detect if there is any issue with the app by examining signals from configurations. They compare them to signals prior to the configuration and perform A/B testing to confirm if an error has occurred.

Learnings from delivering fast and furious user experience with ML and data science

For a global widely-used app as Uber, customisation is necessary, but at the same time, they have to focus on reliability, emphasises Ritesh.

Incidents will always occur, but the critical point is to detect them as soon as possible. The time to detect and time to resolve KPIs help Uber tackle the incidents.

What’s more, when deploying an ML solution at an infrastructure level, Ritesh advises not starting from scratch with a completely new system. Instead, they leverage the systems their developers and engineers are using and apply automation to them. The engineers should be able to understand the ML models and tie back the errors to the actual code.

Ultimately from a business point of view, Anando concludes that ROI really matters. The investment made for the ML solutions, infrastructure, training and deployment should be weighed against the number of detected incidents and the blast radius reduction. Every successful data science and machine learning-based effort should be founded on a two-way street where investment is tied back to ROI so it can be sustainable in the long-run.

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increase in brand value ahead of their initial IPO

Brand Value

Changing how the world moves

Uber came to us at a time of immense change. A new leadership team was on the horizon and the business had reached a new peak in growth, operating in 660+ cities globally, with an incredibly diverse fleet of vehicles ranging from cars to bikes to tuk-tuks to even flying cars. It was clear that the business had outgrown the brand, and that it was the right moment for Uber’s brand to evolve. The brand we created helped shift the company from a rideshare app to a platform for global mobility; from a narrow Silicon Valley perspective to a truly global outlook; and from being focused on growth to being focused on people.

The Global Mobility OS

The evolved Uber brand needed to work around the world. By engaging the organisation at scale and taking an iterative approach with global teams, we worked to create a brand that was flexible and impactful, while still maintaining consistency across markets and audiences. We first developed Uber’s overall position as a brand by establishing the concept of Uber as a 'Global Mobility OS'—a seamless, endlessly supportive platform that puts people, vehicles and goods in motion around the world. This strategy enabled the business to lean into a new positioning and its strengths across a growing geographic footprint and expanding ecosystem. It also inspired a hybrid brand architecture model that capitalizes on Uber’s ownable role as the only resource where people are empowered to ‘go anywhere’ and ‘get anything’.  Today, Uber leans into this narrative framework across all of its key communications and brand building initiatives.

Beyond simple

If Uber was to act and show up like a ‘Global Mobility OS’, it needed a ‘beyond simple’ brand identity that could easily flex across its entire infrastructure. We partnered with the Uber Brand Experience team and MCKL Type Foundry as well as product and marketing teams across five mega-regions globally to create a universal ‘beyond simple’ Uber brand. The identity system was designed so that teams in diverse markets could tailor it to their audiences through imagery, pattern, and culturally specific content. Key parts of the brand included a bespoke typeface, designed for legibility across 13+ languages; driver-centric stories told through a supportive ‘U-frame’ composition; and a Safety Blue addition to the colour palette to indicate special moments of care and connection. 

An $82 billion IPO

After identity development, we partnered closely with the Uber team to shepherd the new brand into the world. “A new brand identity is only half the challenge. Implementing the new designs and strategy across 80+ countries is the real test,” said Dan Henessey, International Creative Director at Uber. “Wolff Olins partnered with us to deliver brand trainings and build a creative review process—not only to ensure brand consistency, but to elevate the final creative output to new heights.” The new brand was launched in September 2018 alongside a new mission statement and a renewed commitment to safety. Following our partnership, Uber’s brand went up 51% in value ahead of their initial IPO. In May 2019, Uber went public to be valued at more than $82 billion.

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Marketing Mix of Uber : Detailed 4P’s Explanations

By Aditya Shastri

Uber is an American tech company. The company provides ride-hailing and food delivery services in around 900 metropolitan areas. It is a market leader in the U.S. with a 71% market share.

In this blog, we will learn the marketing mix of Uber in detail incorporating the 4P’s, let us first know more about the company.

Uber is a private company based in San Francisco, California that provides transportation facilities online by their site or mobile app. The company was founded by Garrett Camp and Travis Kalinick in 2009. It has a huge consumer base with around 100 million users.

Uber came to India in 2013 as the country has a huge consumer base for the company and comfort transportation is a need. The company is doing well with a 17 million user base and it is expanding continuously in various cities.

Now that we have a clear idea about the company, let us see the target audience for Uber.

Target Audience of Uber

The target customer segment that Uber is trying to attract to its company are people who do not have a car, don’t like to drive themselves, or people who don’t want to go themselves to a party, want to travel in style, or want a cost-efficient cab waiting for them at their door. People who don’t like travelling in public transports like taxis and metros but have limited income also come under the target segment of the company. The majority of Uber customers are between the ages of 20 and 40. In addition, for Uber Eats the defined target market will be bachelors who don’t have time for cooking, people who don’t know how to cook, and occasionally everyone beyond that.

Now as we have a clear idea of the company, let us dive into the marketing mix of the company.

Marketing Mix of Uber

Marketing Mix is a set of actions or tactics used by any business company to promote their product or services and to reach out to the customer and create a strong market position.

There are 4P’s in a marketing mix namely product, price, place and promotion. Let us see each one of them for Uber.

1. Product Strategy of Uber

Uber has majorly 3 different services available which are-

1. Uber Ride – In this they provide transportation services through which anyone can travel to any location by booking a cab with a few clicks. The company ensures the safety and hygiene of the cabs. 

It provides different rides worldwide, such as:

• Uber Pool, 
• Uber Comfort, 
• Uber Green/ Black, 
• Bikes and Scooters, 
• UberXL/ Transit/ SUV
• Uber Taxi or Uber auto

2. Uber Eats- The company also provides food delivery services by which you can order food and get it delivered to your place from your favorite restaurants with a minimal delivery fee.

3. Uber Freight- In this Uber provides a parcel transportation service, by which you can send any kind of parcel with different customizable packings anywhere.

All these services are available in a single app that is user-friendly and easily accessible.

2. Pricing Strategy of Uber

Uber defines its prices according to the country and the area it is working in, it has different charges for every country. The company also uses an upfront pricing strategy under which it provides promotional codes and offers to customers and creates a strong customer base.

There are several kinds of cabs available of different sizes for every number of customers and the prices are charged accordingly. The prices also fluctuate with demand-supply conditions and premium charges are collected in peak hours. 

3. Place and Distribution Strategy of Uber

Uber is expanding its services in different regions, it provides its services across the world in over 40 countries and 700 plus cities. They distribute their services through their websites and the mobile apps that are available both on Android & IOS.

You can enjoy the rides and meals at any place by just tapping the rides of your comforts and ordering from your favourite restaurants. Customers can easily track their cabs and food delivery person from the Uber app. 

The app also has a customer support system, where customers can post any kind of complaints or difficulties faced.

4. Promotional Strategy of Uber

Uber has done many things to promote the brand to grab the attention of the customer through referral and convincing strategy by giving free rides, coupon codes to existing users to get discounts up to 25% on Uber trips.

Initially, giving a free ride was a loss for the company, but it worked very effectively with time as it grew the customer base for the company. It also acted as a great promotional tool for the company as customers gave a mouth of the word for the company to other people and shared their experiences. 

In 2023, Uber launched a new marketing campaign for its Uber Intercity service, which is designed for outstation travel. The campaign was launched just in time for the summer travel season, with a focus on easy booking, doorstep pick-ups, and affordable one-way fares. The digital campaign included multiple videos.

Check it out –

Uber doesn’t spend much on advertising, it believes in simple yet effective marketing, they believe in using offers and giving free rides on different occasions as their promotional stunt.

Currently, Uber is doing well in the market with its effective pricing strategy. The company has expanded its zone of services which has helped it gain market share. The company should work more on the promotional element to eliminate competition in the industry as free rides are a common tactic used by several companies. They should increase their promotional sources and invest more in advertising costs. The company has a good product mix and offers various offers and services to customers which gives it customer retention. Overall, Uber is doing good and needs to sustain its position by bringing in new features and facilities for consumers.

Thank you for reading the blog. Do share it with your friends and let us know your views on the same in the comment section.

If you are interested in Digital Marketing, Check out our Free Digital Marketing Masterclass by Karan Shah the founder and the CEO of IIDE, to learn more about digital marketing.

Author's Note: My name is Aditya Shastri and I have written this case study with the help of my students from IIDE's online digital marketing courses in India . Practical assignments, case studies & simulations helped the students from this course present this analysis. Building on this practical approach, we are now introducing a new dimension for our online digital marketing course learners - the Campus Immersion Experience. If you found this case study helpful, please feel free to leave a comment below.

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs...... [Read full bio]

this got me a good grade on my project so thank you <3.

Reading case studies helps me to learn something new every time. Likewise through this blog I have understood and identify the marketing mix of Uber 4ps. Amazing content!

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Uber Eats delivers a 10% increase in campaign reach with Display & Video 360

• Display & Video 360
• Google Marketing Platform
• Ads Data Hub
• Become the go-to food delivery app by associating Uber Eats with key cultural moments.
• Build brand awareness.

The Approach

• Increased visibility during football tentpole events by securing coveted deals through Programmatic Guaranteed - included on CTV devices.
• Used Display & Video 360 to unify ad strategy and simplify campaign execution across different publishers.
• Increased campaign reach by better controlling ad frequency across channels.

The Results

• Increased campaign reach by 10%.
• Reached over 76 million people, of which 25% were CTV viewers.
• Saved and reinvested the equivalent of 150% of platform fee by passing unnecessary impressions.

The food delivery industry had massive growth the past year as more people ordered from home. To set themselves apart from the competition, Uber Eats launched their new “Tonight I’ll be eating” campaign to build their brand with celebrities and key cultural moments. For example, sponsoring the football season in the US. In doing so, they shifted their digital marketing strategy to not only focus on customer acquisition but also drive brand awareness. To effectively reach people where they are, Uber Eats decided to supplement their TV strategy with video ads on laptops, mobile and connected TV.

Massive reach through Programmatic Guaranteed

When assessing this challenge, Uber and their media team at MediaCom found that using Display & Video 360 would give them access to the largest and most diverse pool of inventory sources – from display and video to audio and connected TV (CTV). Because inventory is hard to come by and expensive around high-visibility events such as football games, the Uber Eats team used Programmatic Guaranteed in Display & Video 360 to secure in-demand deals. They harnessed an inventory package curated by their Google account management team to reach their audience across YouTube, Spotify, Hulu, ESPN, Roku and more. Securing relevant inventory early via Programmatic Guaranteed helped Uber pace out deals and better control budgets. Combining this variety of channels in one platform helped Uber reach over 76 million users, among which 25% were CTV users, a growing audience.

Effective cross-channel frequency management

Not only did the Uber Eats team know that ad saturation could be detrimental to their brand, they also knew it could negatively impact campaign performance. So Uber Eats turned to Ads Data Hub to run customized analysis and understand which ad frequency drove the best campaign results. They uncovered that after 7 weekly ad exposures, effectiveness went down. With these insights in mind and all inventory sources and formats in one place, Uber Eats could effectively manage and control ad exposure. YouTube is fundamental to how Uber Eats reaches the 18-35 demographics which are lighter TV viewers so using a tool that could manage frequency across that inventory and their other buys was critical.

“Display & Video 360’s capacity to control ad frequency across YouTube and our other video buys makes it the ideal partner.”

Hanna El Hourani , Global Head of Programmatic, Uber

Uber Eats set a cross-channel frequency goal and skipped bids exceeding the ideal ad exposure. Uber Eats particularly valued how frequency management works for Programmatic Guaranteed deals. Once their overall campaign frequency goal was reached, Display & Video 360 aimed at stopping showing more ads from the Programmatic Guaranteed deals while still prioritizing and ensuring that the agreed number of impressions was delivered.

“Display & Video 360 gives us the ability to execute everything in one shell. That allows for a more precise control of frequency and reach across our entire media buy. It also creates operational efficiency for the team.”

Joe Fried , Global Digital Director, MediaCom

As a result, Uber Eats was able to reach 10% more people than they would have without a unified approach. By passing on unnecessary impressions, Uber also limited budget waste. In fact, they saved and reinvested the equivalent of 150% of their platform fees.

Looking Ahead

“in 2022, i expect us to shift away from a tv-first strategy. we’re planning on using display & video 360 to boost our media investment across various ctv partners”.

In the future, Uber Eats will keep using Display & Video 360 as their preferred demand side platform partner. After seeing success with CTV they expect this channel to take on some of the heavy lifting that linear TV was previously doing.

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Uber's Strategy for Global Success

Brian Kenny: The theory of disruptive innovation was first coined by Harvard Business School Professor Clayton Christensen in his 1997 book, The Innovator's Dilemma. The theory explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, and affordability where complication and high cost are the status quo. Think Netflix disrupting the video rental space.

Over the years, the term has been applied liberally and not always correctly to other examples, but every so often, an idea comes along that really fits the bill. Enter Uber, the ridesharing behemoth that turned the car service industry on its head. In a few short years after launching in 2010, Uber became the largest car service in the world, as measured in ride count. Last year, Uber drove 6.2 billion riders.

Today's case takes us to London in 2019, where Uber is facing the latest in a long list of challenges from regulators threatening their ability to continue operating in that important market. In this episode of Cold Call , we welcome Alexander MacKay to discuss the case entitled, Uber: Competing Globally . I'm your host, Brian Kenny, and you're listening to Cold Call on the HBR Presents network.

Alexander MacKay is in the Strategy Unit at Harvard Business School. His research focuses on matters of competition, including pricing, demand, and market structure. Alex, thanks for joining us on Cold Call today.

Alex MacKay: Thank you, Brian. Very happy to be here.

Brian Kenny: The idea of Uber seems so simple, but it was revolutionary in so many ways. And Uber has been in the headlines many times for both good and bad reasons in its decade of existence. So we're going to touch on a lot of those things today. So thanks for sharing the case with us.

Alex MacKay: Brian, I'm very happy to. It's a little funny, we've actually started to see the first few students who have never hailed a traditional taxi in our classrooms. So I think increasingly, the contrast between the two is going to be pretty difficult for people to fully understand.

Brian Kenny: Let me ask you to start by telling us what your cold call would be when you set up the class here.

Alex MacKay: The case starts off with the current legal battle going on in London. And so the first question I just ask to start the classroom is: What's the end game for Uber in London? What do they look like 10 years from now?

In the midst of this ongoing legal battle, there has been back and forth, some give and take from both sides, Transport for London, and also on the Uber side as well. And there's actually a recent court case that has allowed Uber to have a little more time to operate. They bought about 18 more months of time, but this has been also brought with additional, stricter scrutiny, and 18 months from now, they're going to be at it again trying to figure out exactly what rules Uber's allowed to operate under.

Brian Kenny: It seems like 18 months in the lifetime of Uber is like a decade. Everything seems to happen so quickly for this company. That's a long period of time. What made you decide to write this case? How does it relate to the work that you're doing in your research?

Alex MacKay: A big focus of my research is on competition policy, particularly the realms of antitrust and regulation. And here we have a company, Uber, whose relationship with regulation has been really essential to its strategy from Day One. And I think appreciating the effects of regulation and how its impact Uber's performance in different markets, is really critical for understanding strategy and global strategy broadly.

Brian Kenny: Let's just talk a little bit about Uber. I think people are familiar with it, but they may not be familiar with just how large they are in this space. And the space that they've sort of created has also blown up and expanded in many ways. So how big is Uber? Like what's the landscape of ridesharing look like and where does Uber sit in that landscape?

Alex MacKay: Uber globally is the biggest ridesharing company. In 2018, they had over $10 billion in revenue for both ridesharing and their Uber Eats platform. And you mentioned in the introduction, that they had over 6 billion rides in 2019. That's greater than 15 million rides every day that's happening on their platform. So really, just an enormous company.

Brian Kenny: So they started back in 2010. It's been kind of an amazing decade of growth for them. How do you explain that kind of rapid expansion?

Alex MacKay: They were financed early on with some angel investors. I think [co-founder Travis] Kalanick's background really helped there to get some early funding. But one of the critical things that allowed them to expand early into many markets that helped their growth was they're a relatively asset light company.

On the ground, they certainly need sales teams, they need translation work to move into different markets, but because the main asset they were providing in these different markets was software, and drivers were bringing their own cars and riders were bringing their own phones, the key pieces of hardware that you need to operate this market, they really didn't have to invest a ton of capital.

In fact, when they launched in Paris, they launched as sort of a prototype, just to show, "Hey, we can do this in Paris without too much difficulty," as their first international market. So being able to really scale it across different markets really allowed them to grow. I think by 2015, their market cap was $60 billion, five years after founding, which is just an incredible rate of growth.

Brian Kenny: So they're the biggest car service in the world, but they don't own any cars. Like what business are they really in, I guess is the question?

Alex MacKay: They're certainly in the business of matching riders to drivers. They've been able to do this in a way that doesn't require them to own cars, just through the use of technology. And so what they're doing, and this is I think pretty well understood, is that they're using existing capital, people who have cars that may be going unused, personal cars, and Uber is able to use that and deploy that to give riding services to different customers.

Whereas in the traditional taxi model, you could have taxis that you didn't necessarily own, but you leased them or you rented them, but they had the express purpose of being driven for taxi services. And so it wasn't using idle capital. You kind of had to create additional capital in order to provide the services.

Brian Kenny: So you mentioned Travis Kalanick a little bit earlier, but he was one of the co-founders of the company, and the case goes a little bit into his philosophy of what expansion into new markets should look like. Can you talk a little bit about that?

Alex MacKay: Certainly. Yes. And I think it might even be helpful to talk a bit about his background, which I think provides a little more context before Uber. He dropped out of UCLA to work on his first company, Scour, and that was a peer-to-peer file sharing service, a lot like Napster, and actually predated Napster. And where he was operating was sort of an evolving legal gray area. Eventually, Scour got sued for $250 billion by a collection of entertainment companies and had to file for bankruptcy.

Brian Kenny: Wow.

Alex MacKay: He followed that up with his next venture, Red Swoosh, and that was software aimed at allowing users to share network bandwidth. So again, it was a little bit ahead of its time, making use of recent advances in technology. Early on though, they got in trouble with the IRS. They weren't withholding taxes, and there were some other issues with his co-founder, and there was sort of a bad breakup between the two.

Despite this, he persevered and ended up selling the company for $23 million in 2007. And after that, his next big thing was Uber. So one thing I just want to point out is that at all three of these companies, he was looking to do something that leveraged new technology to change the world. And by nature, sometimes businesses like that operate in a legal gray area and you have very difficult decisions to make.

Some other decisions you have to make are clearly unethical and there's really no reason to make some of those decisions, like with the taxes and with some other things that came out later on at Uber, but certainly one of the things that any founder who's looking to change the world with a big new technology company has to deal with, is that often, the legal framework and the regulatory framework around what you're trying to do isn't well established.

Brian Kenny: Obviously drama seems to follow Travis where he goes. And his expansion strategy was pretty aggressive. It was almost like a warlike mentality in terms of going into a new market. And you could sort of sum it up as saying ask forgiveness. Is that fair?

Alex MacKay: Yes. Ask for forgiveness, not permission. I think they were really focused on winning. I think that was sort of their ultimate goal.

We describe in the case there's this policy of principle confrontation, to ignore existing regulations until you receive pushback. And then when you do receive pushback, either from local regulators or existing sort of taxi cab drivers, mobilize a response to sort of confront that. During their beta launch in 2010, they received a cease-and-desist letter from the city of San Francisco. And they essentially just ignored this letter.

They rebranded, they used to be UberCab, and they just took “Cab” out of their name, so now they're Uber. And you can see their perspective in their press release in response to this. They say, "UberCab is a first-to-market cutting-edge transportation technology, and it must be recognized that the regulations from both city and state regulatory bodies have not been written with these innovations in mind. As such, we are happy to help educate the regulatory bodies on this new generation of technology and work closely with both agencies to ensure compliance."

Brian Kenny: It's a little arrogant.

Alex MacKay: Yes, so you can see right there, they're saying, what we're operating in is sort of this new technology-based realm and the regulators don't really understand what's going on. And so instead of complying with the existing regulations, we're going to try to push regulations to fit what we're trying to do.

Brian Kenny: The case is pretty epic in terms of it sort of cuts a sweeping arc across the world, looking at the challenges that they faced with each market they entered, and none more interesting I think the New York City, which is obviously an enormous market. Can you talk a little bit about some of the challenges they faced going into New York with the cab industry being as prevalent as it was and is?

Alex MacKay: Yes, absolutely. I mean, I think it's pretty well known for people who are familiar with New York that there were restrictions on the number of medallions which allowed taxis to operate. So there was a limited number of taxis that could drive around New York City. This restriction had really driven up the value of these medallions to the taxi owners.

And if you had the experience of taking taxis in New York City prior to the advent of Uber, what you'd find is that there were some areas where the service was very, very good. Downtown, Midtown Manhattan, you could almost always find a taxi, but there are other parts of the city where it was very difficult at times to find a cab. And when you got in a cab, you weren't sure that you were always going to be given a fair ride.

And so Uber coming in and providing this technology that allowed you to pick up a ride from anywhere and sort of track the route as you're going on really disrupted this market. Consumers love them. They had a thousand apps signups before they even launched.

Kalanick mentioned this in terms of their launch strategy, we have to go here because the consumers really want us here. But immediately, they started getting pushback from the taxi cab owners who were threatened by this new mode of transportation. They argued that they should be under the same regulations that the taxis were.

And there were a lot of local government officials that were sort of mobilized against Uber as well. De Blasio, the Mayor of New York, wrote opinion articles against Uber, claiming that they were contributing to congestion. There was a lot of concern that maybe they had some safety issues, and the taxi drivers and the owners brought a lawsuit against Uber for evading these regulations. And then later on, and this was the case in many local governments, de Blasio introduced a bill to put additional restrictions on Uber that would make them look a lot more like a traditional taxi operating model, with limited number of licenses and strict requirements for reporting.

Brian Kenny: And this is the same scenario that's going to play out almost with every city that they go into because there is such an established infrastructure for the taxi industry in those places. They have lobbyists. They're tied into the political networks. In some instances, it was revealed that they've been connected with organized crime. So not for the faint of heart, right, trying to expand into some of the biggest cities in the United States.

Alex MacKay: Absolutely. And what's sort of fascinating about the United States is it's actually a place where a company can engage in this battle over regulation on the ground. And de Blasio writes his opinion article and pushes forward this bill. Uber responds by taking out an ad campaign, over $3 million, opposing these regulations and calling out de Blasio.

So again, we sort of have this fascinating example of Uber mobilizing their own lobbyists, their lawyers, but also public advertising to sort of convince the residents of New York City that de Blasio and the regulators that are trying to come down on them are in the wrong.

Brian Kenny: Yes. And at the end of the day, it's consumers that they're really making this appeal to, because I guess my question is, are these regulations stifling innovation? And if they are, who pays the ultimate price for that, Uber or the consumer?

Alex MacKay: Consumers definitely loved Uber. And I don't think any of the regulators were trying to stifle innovation. I don't think they would say that. I think their biggest concern, their primary concern was safety, and a secondary and related concern here was losing regulatory oversight over the transportation sector.

So this is a public service that had been fairly tightly regulated for a long time, and there was some concern that what happens when this just becomes almost a free-market sector. At the same time, these regulators have the lobbyists from the taxi cab industry and other interested parties in their ear trying to convince them that Uber really is like a taxi company and should be regulated, and really emphasizing the safety concerns and other concerns to try to get stricter regulations put on Uber. And part of that may be valid.

I think you certainly should be concerned about safety and there are real concerns there, but part of it is simply the strategic game that rivals are going to play between each other. And the taxi cab industry sees Uber as a threat. It's in their best interest to lobby the regulators to come down on Uber.

Brian Kenny: And what's amazing to me is that while all this is playing out, they're not turning their tails and running. They're continuing to push forward and expand into other parts of the world. So can you talk a little bit about what it was like trying to go into countries in Latin America, countries in Asia, where the regulations and the regulatory infrastructure is quite different than it is in the US?

Alex MacKay: In the case, we have anecdotes, vignettes, one for each continent. And their experience in each continent was actually pretty different. Even within a continent, you're going to have very different regulatory frameworks for each country.

So we sort of pick a few and focus on a few, just to highlight how the experience is very different in different countries. And one thing that's sort of interesting, in Latin America, we focus on Bogota in Colombia, and what's sort of interesting there is they launched secretly and they were pretty early on considered to be illegal, but they continue to operate despite the official policy of being illegal in Colombia. And they were able to do that in a way that you may not be able to do it so easily in the United States, just because of the different layers of enforcement and policy considerations that are present in Colombia and not necessarily in the United States.

Now, when I talk about the current state of Uber in different countries, this is continually evolving. So they temporarily suspended their operations early in 2020 in Columbia. Now they're back. This is a continual back and forth game that they're playing with the regulators in different markets.

Brian Kenny: And in a place like Colombia, are they not worried about violence and the potential for violence against their drivers?

Alex MacKay: Absolutely. So this is true sort of around the world. I think in certain countries, violence becomes a little bit more of a concern. And what they found in Colombia is they did have more incidents where taxi drivers decided to take things into their own hands and threaten Uber drivers and Uber riders, sometimes with weapons.

Another decision Uber had to make that was related to that was whether or not to allow riders to pay in cash. Because in the United States, they'd exclusively used credit cards, but in Latin America and some other countries like India, consumers tended to prefer to use cash to pay, and allowing that sort of opened up this additional risk that Uber didn't really have a great system in place to protect them from. Because when you go to cash, you're not able to track every rider quite as easily, and there's just a bigger chance for fraud or for robbery and that sort of thing popping up.

Brian Kenny: Going into Asia was also quite a challenge for them. Can you talk a little bit about some of the challenges they faced, particularly in China?

Alex MacKay: They had very different experiences in each country in Asia. China was a unique case that is very fascinating, because when Uber launched there, there were already existing technology-based, you might call them, rideshare companies, that were fairly prominent, DiDi and Kuaidi. And these companies later merged to be one company, DiDi, which is huge. It's on par with Uber in terms of its global presence as a ridesharing company.

When Uber launched there, they didn't fully anticipate all the changes they would have to make to going into a very different environment. In China, besides having established competitors, Google Maps didn't work, and they sort of relied on that mapping software to do their location services. So they had to completely redo their location services.

They also, again, relied on credit cards for payments, and in China, consumers increasingly used apps to do their payments. And this became a little bit of a challenge because the main app that Chinese customers used, they used WeChat and Alipay primarily, they were actually owned by parent companies of the rival ridesharing company. So Uber had to essentially negotiate with its rivals in order to have consumers pay for their ridesharing services. And so here are a few sort of localization issues that you could argue Uber didn't fully anticipate when they launched.

The other thing about competing in China that's sort of interesting is that Chinese policy regarding competition is very different from policy in the United States and much of Europe. For the most part, there's not the traditional antitrust view of protecting the consumers first and foremost. That certainly comes into play, but the Chinese government has other objectives, including promoting domestic firms. And so if you think about launching into a company where there's a large established domestic rival that certainly increases the difficulty of success, because when push comes to shove, the government is likely to come down on the side of your rival, which is the domestic company, and not the foreign entrant.

Brian Kenny: Yes, which is understandable, I guess, to some extent. This sounds exhausting, to be sort of fighting skirmishes on all these fronts in all these different places in the world. How does that affect the morale or tear at the fabric maybe of the culture at a company like Uber, where they're trying to manage this on a global scale and running into challenges every step of the way?

Alex MacKay: It certainly has an effect. I think Uber did a very good job at recruiting teams of people who really wanted to win. And so, if that's the consistent message you're sending to your teams, then these challenges may be actually considered somewhat exciting. And so I think by bringing in that sort of person, I think they actually fueled this desire to win in these markets and really kept the momentum going.

One of the downsides of this of course is that if you exclusively focus on winning and getting around the existing regulations, there does become this challenge of what's ethical and what's not ethical? And in certain business areas, there actually often is a little bit of a gray line. I mean, you can see this outside of ridesharing. It's a much broader thing to think about, but regulation of pharmaceuticals, regulation of use of new technologies such as drones, often the technology outpaces the regulation by a little bit and there's this lag in trying to figure out what actually is the right thing to do.

I think it's a fair question whether or not you can disentangle this sort of principle of confrontation that's so pervasive throughout the company culture when it comes to regulation from this principle confrontation of other ethical issues that are not necessarily business driven, and whether or not it's easy to maintain that separation. And I think that's a fair question, certainly worthy for debate. But what I think is important is you can set up a company where you are abiding by ethical issues that are very clear, but you're still going to face challenges on the legal side when you're developing a new business in an area with new technology.

Brian Kenny: That's a great insight. I mean, I found myself asking myself as I got through the case, I can't tell if Uber is the victim or the aggressor in all of this. And I guess the answer is they're a little bit of both.

Alex MacKay: Yes. I think it's fair to characterize them as an aggressor, and I think you sort of need to be if you want to succeed and if you want to change the world in a new technology area. In some sense, they're a victim in that we're all the victim as consumers and as firms of regulations that are sometimes difficult to adapt in real time to changing market conditions. And there's a good reason why they are sticky over time, but sometimes that can be very costly.

Going back to something we talked about earlier, I think there are hardly any consumers that wanted Uber kicked out of New York City. I think everyone realized this was just so much superior to any other option they had, that they were really willing to fight to keep Uber around in the limited ways they could.

Brian Kenny: So let's go back to the central issue in the case then, which is, how important is it to them, in terms of their global strategy, to have a presence in a place like London? They're still not profitable by the way, we should point that out, that despite the fact that they are the largest in the space, they haven't turned the corner to profitability yet. I would imagine London's kind of important.

Alex MacKay: Absolutely. London is a key international city, and a presence there is important for Uber's overall brand. So many people travel through London, and it's a real benefit for anyone who travels to be able to use the same service at any city you stop in.

At the same time, they're facing these increasing regulatory pressures from London, and so it's a real question whether or not, 10 years from now, they look substantially different from the established taxi industry that's there.

And you can kind of see this battle playing out across different markets. As another example, in Ghana. When they entered there, they actually entered with a framework for understanding. They helped build the regulations for ridesharing services in Ghana when they entered. But over time, that evolved to additional restrictions as the existing taxi companies pushed back on them.

So I think a key lesson here in all of this is that the regulations that you see at any given point in time aren't absolutely fixed, for anyone starting a technology-based company, there will be regulations that do get created that affect your business. Stepping outside of transportation, we can see that going on now with the big tech firms and sort of the antitrust investigations they're are under. And the policymakers in the US and Europe are really trying to evolve the set of regulations to reflect the different businesses that Apple, Facebook, Microsoft, Google are involved in.

Brian Kenny: One thing we haven't touched on, and it's not touched on in the case obviously because it just sort of started fairly recently, is the pandemic and the implications of the pandemic for the rideshare industry as fewer people find themselves in need of going anywhere. Have you given any thought to that and whether that's going to have any effect on the regulations?

Alex MacKay: It certainly could. Uber is in a somewhat fortunate position, at least if you judge by their market capitalization, with respect to the pandemic. Initially their stocks took a pretty big hit, but rebounded pretty quickly, and part of this is because the primary part of their business is the transportation through Uber X, but they do also offer the delivery services through Uber Eats, and that business has really picked up during this pandemic.

There's certainly a mix of views about the future, but I think most people do believe that at some point we'll get back to business as usual, at least for Uber services, when we come up with a vaccine. I think most people anticipate that they'll be resuming use of Uber once it becomes safe to do so. And I think, to be frank, a lot of people already have resumed using Uber, especially people who don't have cars or who see it as a valuable alternative or a safer alternative to public transit.

Brian Kenny: Yes, that's a really good point. And the Uber Eats thing is interesting as another example of how it's important for businesses to re-imagine the business that they're in because that, in many ways, may be helping them through a really tough patch here.

This has been a really interesting conversation, Alex, I want to ask you one final question, which is, as the students are packing up to leave class, what's the one thing you want them to take away from the case?

Alex MacKay: So I would hope the students take away the importance of regulation in business strategy. And I think the case of Uber really highlights that. And if you look at the conversation around Uber I'd say for the first 10 years of their existence, it was essentially around the superiority of their technology and not so much how they handled regulation. If you think back to the cease-and-desist letter that San Francisco issued in 2010, if Uber had simply stopped operations then, we wouldn't have the ridesharing world that we have today.

So their strategy of principle confrontation with respect to regulation was really essential for their future growth. Again, this does raise important ethical considerations as you're operating in a legal gray area, but it's certainly an essential part of strategy.

Brian Kenny: Alex, thanks so much for joining us on Cold Call today. It's been great talking to you.

Alex MacKay: Thank you so much, Brian.

Brian Kenny: If you enjoy Cold Call , you might like other podcasts on the HBR Presents network. Whether you're looking for advice on navigating your career, you want the latest thinking in business and management, or you just want to hear what's on the minds of Harvard Business School professors, the HBR Presents network has a podcast for you. Find them on Apple podcasts or wherever you listen.

I'm your host, Brian Kenny, and you've been listening to Cold Call , an official podcast of Harvard Business School on the HBR Presents network.

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