The Uber Companys History and Strategic Analysis

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Introduction

History of The Company

Uber begins its history in 2009, when its founders Travis Kalanick and Garrett Camp launched the UberCab service for ordering executive class cars (Qumer & Purkayastha, 2020). In 2012, a mass fare with simpler cars was launched, named Uber X (Qumer & Purkayastha, 2020). From that moment on, the company begins to develop rapidly, actively expanding the geography of the availability of its service. Today, Uber operates in more than 70 countries around the world (Norlander et al., 2020).

Industry Information

The taxi industry is filled with large companies, both international and country-specific. In addition, in some states, local physical taxis are not losing popularity, for which one needs to call by phone, and not make an order through an application.

Company Mission

Ubers mission sounds like bringing transportation everywhere and for everyone(Sthapit & Björk, 2019). The company sees re-uniting people and communities with the help of transport as its mission, helping them to solve problems and achieve their goals in life.

Company Objectives

The key goals of Uber are to retain and conquer a large part of the taxi market and improve the quality of services provided. The company strives to take a leading position in the industry and achieve the most efficient use of raw materials, human and financial resources (Norlander et al., 2020). The organization also aims to increase the profitability of its activities and achieve the maximum level of employment.

Analysis

Competitive Strategies

Uber adheres to the optimal cost strategy, which is based on providing the customer with proportionally more value for proportionally more money. It assumes a strategic focus on low costs and at the same time providing the buyer with values from the minimum acceptable quality to the maximum (Brodeur & Nield, 2018). The strategic goal is to strive to become a service provider with low costs and distinctive characteristics from a competitor. A special competitive advantage is achieved due to the fact that Uber is close to competitors in terms of comfort and speed and exceeds competitors in terms of costs.

External Environment & Internal Resources

Five Forces

Consumers of Uber services that have a direct impact on the companys profits are primarily young people from 20 to 30 years old (Qumer & Purkayastha, 2020). The suppliers who own the resources necessary to provide the service are hired drivers, most often migrants. The current competitors of Uber are other large taxi companies, such as Left, and local organizations. New competitors are constantly emerging private driver services. Ubers substitutes are rental of other types of transport, for example, bicycles or electric scooters.

PESTEL

Political factors include government regulation of the people transportation industry, economic factors include inflation and the associated solvency of the population. Social factors include social needs that force people to move by transport, and technological factors include the presence of development in the production of cars.

SWOT

Ubers strengths are a fast taxi and polite employees, its weaknesses are not the non-effective quality control service (Schaller, 2021). Opportunities for Uber are the development of technologies for the car wash market, and threats are the increase in taxes on the use of transport.

Value Chain

Material and technical support is the accounting of vehicles; production processes involve hiring drivers, assigning them orders and monitoring their work. Material and technical support of sales is the processing of customer orders, marketing and sales are based on online advertising; service focuses on car repairs.

Financial Data

Uber has a high liquidity ratio, which allows the company to repay its short-term debts at maturity using current assets. Solvency and profitability coefficients are also at a high level, and these indicators are growing annually (Qumer & Purkayastha, 2020). However, the efficiency coefficient shows that the Uber application uses its assets and liabilities to increase sales not for maximum efficiency.

Statement of Problems

The salient problem of Uber at the moment is the corporate culture, which negatively affects both employees and customers. Since Uber is a company operating in an industry with a high turnover rate, employee retention is not important (Qumer & Purkayastha, 2020). In this regard, migrant employees and women quickly quit and leave negative reviews because of the attitude of the management.

Purpose of Analysis

A strong business reputation is important in todays taxi market. This is what sets a company apart from competitors and allows to attract and retain customers. However, due to the reviews of former employees, where the management of Uber is accused of harassing and insulting migrant employees, many customers refuse to use the companys services (Norlander et al., 2020). They fundamentally choose competitors whose corporate culture does not support sexism and racism. In order to stop problems with personnel management and disruption of business processes, strategic alternatives available are aimed at establishing a stable corporate culture. The necessary strategy will be to form a corporate culture in such a way as to unite the team, improve the microclimate and increase the productivity of the organization.

Adaptive Organizational Culture Strategy

The first of the mutually exclusive alternatives will be the creation of an adaptive corporate culture. The logic of its choice is due to the fact that such a strategy is characterized by maneuverability, the ability to respond effectively and adapt to changing conditions in the company. With adaptive strategy, employees are not afraid of changes, while the company takes an active position in identifying and evaluating problems, finding, making and implementing decisions.

This strategy is the most feasible of all three options due to the fact that it largely takes into account the interests of employees. Therefore, they will not resist this way of introducing corporate culture, as it will be aimed at protecting their own rights (Jiang et al., 2018). The advantages of such a strategy will be that the members of the organization will not doubt that the company will cope with any threats and will be able to realize any opportunities. The employees will be ready for risk and will not be afraid of experiments, innovations, changes in strategy and working methods.

Disadvantages of the adaptive strategy at the corporate and SBU level include the lack of a detailed picture of the future and a clear plan of action. The desired state of an organizations corporate culture formed in an adaptive strategy is not a detailed description of its internal and external situation. It is more of a qualitative wish for what state Uber should be in in the future. If this alternative is used, the theory of ethical and social responsibility will be supported. This is due to the fact that decisions in the field of company management will be made taking into account the social and moral and legal attitude towards employees of different genders and races.

Strong Organizational Culture Strategy

The second alternative strategy may be the introduction of a strong organizational culture. It is represented by principles that are inextricably linked with work. As a rule, with such a strategy there is a clearly formulated mission, and the norms of behavior do not change when the companys management changes. The feasibility of this strategy is due to the fact that Uber is led by a strong leader who can motivate employees to adhere to established traditions. Moreover, there are high chances to resolve the existing conflict with the cultural changes in the external environment, which also makes the application of this strategy feasible.

The advantages of such a strategy are that employees are more motivated for stable work, career development and achievements in the company. They understand the rules of work, and this gives them the opportunity to achieve the desired result faster. A strong, harmonious corporate culture strategy attracts suitable employees to the company, that is, those who share its values and beliefs. The disadvantages of this strategy at the corporate and SBU level are that there is a risk that conformity associated with a strong corporate culture will slow down work on the necessary changes (Sthapit & Björk, 2019). If Uber needs to replace its approach due to new market conditions, change may be too slow. When using this strategy, it is necessary to be especially attentive to ensure that there is no disregard for the theory of ethical and social responsibility. In this case, a highly developed corporate culture can lead to sectarianism, in which everything that is outside the boundaries of the officially acceptable is ignored including important social issues.

Team Organizational Culture Strategy

The third alternative to the introduction of corporate culture can be a team strategy. There is no clearly defined hierarchy in it, and the basis of activity is a team method of work, when a group of employees unites to solve a problem. With this strategy, the ability to work in a team and take responsibility for decisions and results is most valued in the staff. The feasibility of this strategy is due to the fact that it is a strategy in which the object of management is not an individual, but a group. It is most focused on employees who play an important role for the comfort of customers. The main type of resources that this culture relies on are the resources of small groups, whose representatives are most often employed by drivers in Uber.

The advantages of this strategy will be a focus on the opinions of national minorities, which mutually excludes racism, which the corporate culture of Uber is blamed on at the moment. However, this strategy has a large number of disadvantages at the corporate and SBU level. This are a low level of manageability of the organization and high requirements for the qualification of the head of Uber for the creation, management and motivation of groups (Schaller, 2021). Challenges include the difficulties of information exchange between groups and the need to spend a lot of time on discussion. This recommendation is supported by ethical and social responsibility theory due to the fact that it excludes most types of discrimination. Such a corporate culture strategy guarantees a tolerant attitude towards representatives of different genders, ages, religions and races. In addition, the team strategy is inclusive and helps employees with disabilities to adapt.

Recommended Strategic Alternative

Of all three strategic alternatives, the adaptive one seems to be the most preferable (Qumer & Purkayastha, 2020). Its advantages over strong organizational culture strategy are flexibility. Adhering to this strategy, it will be easy to adjust the plan based on external market changes, which is impossible with a strong corporate strategy. The advantage of an adaptive strategy over a command strategy is its manageability, which makes it easy to control the innovations introduced.

Implementation Plan

First of all, it is necessary to form the basic principles and values of the company. Then, based on the basic values, it is necessary to determine the standards of behavior of the companys employees, traditions and symbols. After that, Uber needs to have such a description in the materials about their organization so that new employees can, after reading this document, orient themselves and understand the main accents in the company. Challenges and issues can be associated with arousing the interest of employees and selecting the right motivation system. One of the common mistakes in the strategy of corporate culture is when its essence narrows down to slogans and the performance of official duties (Norlander et al., 2020). In this case, it only causes a negative and aggravates the situation.

Evaluation & Control Plan

To assess the effectiveness of an adaptive corporate culture strategy, Uber can use a method such as employee questionnaires. With this method of studying organizational culture, it is advisable to ask employees what values underlie the management practices that have developed in the organization and what organizational values exist in the team (Qumer & Purkayastha, 2020). In the process of control, it is necessary to pay special attention to non-material, externally non-perceived aspects of the organizational environment. The manager should listen to the news told in the organization, analyze who their acting persons are and what they reflect in the culture of the organization.

Conclusion

Thus, in order to maintain the customer base and resist competition from new competitors, Uber needs to introduce a new corporate culture. The peculiarities of corporate values should be a tolerant attitude towards representatives of different races and genders. The introduction of an adaptive corporate culture strategy will help restore the companys reputation and preserve both customers and employees.

References

Brodeur, A., & Nield, K. (2018). An empirical analysis of taxi, Lyft and Uber rides: Evidence from weather shocks in NYC. Journal of Economic Behavior & Organization, 152(18), 1-16.

Jiang, S., Chen, L., Mislove, A., & Wilson, C. (2018). On ridesharing competition and accessibility: Evidence from Uber, Lyft, and taxi. Track: Web and Society, 23(16), 863-872.

Norlander, P., Jukic, N., Varma, A., & Nestorov, S. (2020). The effects of technological supervision on gig workers: Organizational control and motivation of Uber, taxi, and limousine drivers. The International Journal of Human Resource Management, 32(19), 4053-4077.

Qumer, S. M., & Purkayastha, D. (2020). Chaos at Uber: The new CEOs challenge. IBS Center for Management Research.

Schaller, B. (2021). Can sharing a ride make for less traffic? Evidence from Uber and Lyft and implications for cities. Transport Policy, 102(27), 1-10.

Sthapit, E., & Björk, P. (2019). Sources of value co-destruction: Uber customer perspectives. Tourism Review, 74(4), 780-794.

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