Category: Uber

In comparison with the red ones, blue oceans are the markets that do not exist yet and are to be created by companies through innovative and unique products or services. Hence, the red oceans are the ones where competitors fight for a larger market share, while in the blue once, demand is created (Kim & Mauborgne, 2005). A company that has successfully pursued a blue ocean strategy is Uber. Uber has changed the transportation industry by giving people mobility opportunities that did not exist on the market before. Prior to the corporations creation, people would either have to call taxi companies and spend extensive time waiting for the driver or catch the cab personally, which is not only inconvenient but also dangerous. Uber created a platform where drivers can provide services, and customers are able to see the automobiles that are in close proximity and choose an option that suits their needs.

Beforehand, the value and cost drivers for companies operating in the same industry would include purchasing of vehicles, wages for the drivers, maintenance, and other factors. Ubers value, however, depends on the independent drivers who pay a percentage of their earnings by using the app. Hence, the cost drivers for the corporation itself consist of insurances, service expenses, payment processing fees, and other aspects that are not directly linked to the transportation of customers. The product differentiation and the ability to provide relatively low-cost services due to the lack of necessity to invest in automobiles makes Uber a value innovator.

Uber is a value innovator since the company was the first one to upgrade the transportation industry to a more affordable, comfortable, and available version of itself. Currently, every person is able to quickly access the app and find a cab without difficulties due to Ubers unique way of connecting service providers and customers. Instead of investing in automobiles like the competitors, the corporation allowed drivers to work independently, cutting down on costs and creating a whole new market.

References

Kim, W. C., & Mauborgne, R. (2005). Blue Ocean Strategy. Harvard Business School Press.

Uber Technologies Inc. listed on the New York Stock Exchange on 10 May 2019. Wild speculation about the value of the 9th largest IPO in history has been all over the media for a few months. Last year, investment bankers, jockeying for some action in the fee income, talked up the value of the in the media, suggesting a value as high as $120bn.

Although markets are not perfect, neither are they gullible and Uber listed at a valuation of $79bn. Its debut was unfortunately badly timed as markets fell on Friday over concerns of the impact of trade war between China and the USA. The company’s market capitalisation after day one of trade declined to below R70bn, a considerable drop from its listing value.

Our objective in this document is to research and lay out all the necessary facts about Uber and to ultimately provide the reader with a long-term valuation that is realistic, credible and competitive for Uber Technologies Inc. using available information about the company and industry.

Uber’s mission statement is ‘To bring transport – for everyone, everywhere’. Their vision statement is: ‘Smarter transportation with fewer cars and greater access. Transportation that’s safer, cheaper, and more reliable; transportation that creates more job opportunities and higher incomes for drivers’

The Business

Uber’s main product and therefore business, can be described as a ride-hailing platform, through the Uber smartphone application, that allows users to access rides on demand at inexpensive prices, with flexibility of use and safety. It, in effect, enables users to request a ride/taxi via a location based application on their phones and connects drivers and passengers directly rather than through a call centre.

The Numbers

We estimate a global market potential for Uber at $330bn per annum, with a significant global market penetration of 40% in 5 years. We place a valuation of $76.4bn on the Uber business which approximates its IPO valuation on 10 May 2019 of R79bn.

Uber is the largest hail-riding company globally, and is expected to more than triple its revenue over 10 years. This will be driven by:

1. Continued strong global growth in the ride hailing market (including related logistics, such as Uber Eats and Uber Freight) forecast at rate of 10% p.a. compounded, and
2. By international expansion and/or consolidation. Its leading market position and size in the transport market coupled with the retention of some $9bn of the IPO funds allows Uber to grow, in our view, to 40% of the expanded global industry. We estimate its current share of the global market at 25%.

The continued high sales growth, coupled with a low capital re-investment requirement, will result in a positive operating leverage culminating in a 22.5% operating margin by 2022. The recent $500bn investment by Toyota into Uber at a valuation of $76bn, further underpins our forecast and views on its prospects.

The valuation model adopted is the Discounted Cash Flow (DCF) method, which discounts the expected future free cash flow of Uber, initially, over a 10 year growth period, and then determining the future cash flows beyond the 10 year growth period, known as the Terminal Value. The present value of these cash flows has been determined by discounting the future free cash flows at a cost of capital of 8%, based on the median of US companies.

The People

Multiple scandals damaged Uber’s brand in the early years and forced co-founder Travis Kalanick to resign as CEO. Kalanick’s early “win at all costs” strategy caused significant controversy and negative publicity for the company.

Under the stewardship of Dara Khosrowshahi as CEO, and people such as former attorney general Eric Holder and Arianna Huffington the company has taken steps to revamp its troubled management and corrupt culture.

The Future

The significant competitive advantage that Uber has by being first-to-market with its ride-hailing platform has ensured a large market share of around 70% in the USA. The IPO has increased Uber’s financial muscle and the Artificial Intelligence revolution will offer enormous benefits to leading technology companies. Much like Facebook, Apple, Google, and Amazon were first-to-market and continue to dominate, Uber we believe will remain the dominant player in the ride-hailing industry. It will take a brave person to bet against them.

Business description

Uber Technologies Inc. is a multinational transportation network company that offers a peer-to-peer system that allows users to request transport and allows other users to offer said transport and has recently branched out in using their network to allow customers to order food and drivers will go fetch and deliver the food to the customer.

The term “hail-riding business” has been adopted to describe this industry that has significantly disrupted the traditional transport sectors of care hire, taxi, trains and buses.

History

• Uber Technologies Inc. was founded in 2009 by Garrett Camp and Travis Kalanick and was initially called UberCab. The idea stemmed from Camp having recently spent a lot of money on private transport and he wanted to find a way to make transport cheaper for everyone.
• In 2010 a man named Ryan Graves became the first employee of the company when he responded to a tweet sent out by Travis and was given a general management role and between 5 and 10% of the company and was soon named as the company’s CEO but after 10 months Kalanick took over the role of CEO.
• The Uber app finally launched in San Francisco in 2011 but it only allowed users to order a luxury car that were more expensive than regular taxis.
• In 2011 they shortened their name to Uber from UberCab to appease taxi companies in San Francisco.
• In July 2012 they unveiled their product – UberX – which was a service that allowed the general public to work for uber as a driver if they passed the background check, using a car that met certain requirements. This then allowed these drivers to connect to customers to offer cheap transport. Prices were initially close to those of normal taxis and was 35% cheaper than UberBLACK.
• In early 2013 they were operating in 35 different cities.
• In April 2013 Uber allowed drivers to use their personal cars. This caused prices to drop massively, upsetting UberBLACK and taxi drivers because they couldn’t compete with the cheaper competition.
• In August 2014 Uber unveiled UberPOOL which is a carpooling service. Which has steadily begun being implemented around the world since then.
• In August 2014 Uber Unveiled UberEATS which is a food delivery service.
• In September 2016 Uber unveiled its first self-driving car services to select individuals in the city of Pittsburgh.
• In December 2016 Uber stated to test a self-driving car in San Francisco but soon after they were forced to stop all tests in California due to a problem with registration for many of their cars being revoked. They then moved the tests to Arizona where customers could get picked up in these self-driving cars.
• In March 2018 the death of a pedestrian led to tests of their self-driving cars being stopped
• In December 2018 Uber restarted their testing with permission from the authorities.
• In March 2019 Uber was found to not be criminally liable for the death of the pedestrian in 2018.

Management Team

Dara Khosrowshahi, the CEO of Uber manages the fast growing company. He had previously held the same position in Expedia, an online travelling company. Dara has also held positions of Chief Financial Officer of IAC Travel and the Vice President of Allen & Company. The experience he gained and the hard work put in resulted in him being one of the highest rated CEOs on Glassdoor.

Chief Financial Officer, Nelson Chai, once worked as the President of the CIT Group for more than five years, the CFO of Merrill Lynch & Co and the CEO of the Warranty Group, an insurance and warranty provider. He also graduated with a Master of Business Administration from Harvard Business School. He serves on the boards of US Fund for UNICEF and the University of Pennsylvania School of Arts and Sciences.

Tony West is the Chief Legal Officer, Senior Vice President and Corporate Secretary at Uber. He deals with the legal, compliance, ethics and security functions. Previously, he was the Corporate Secretary and Executive Vice President of PepsiCo. He was the Senior Official in the Obama administration and the Associate Attorney General of US. He graduated from Harvard College with an Honours and obtained a law degree from Stanford Law School.

The Chief Operating Officer is Barney Harford who once held the position of CEO and board director of Orbitz Worldwide. Harford is responsible for global ridesharing strategy, operations, marketing, and customer support. He was the Strategy Consultant with Kalchas Group and the board director of United Airlines & Realself. Barney obtained an MBA from INSEAD and an undergraduate degree in Natural Sciences from Cambridge University.

Chief People Officer, Nikki Krishamurthy, is in charge of human resources, recruiting, workplace, and diversity and inclusion teams. She was most recently the Chief People Officer at Expedia Inc. and the Vice President of Expedia Local Expert. Nikki played HR roles at WaMu and PNC Financial Services Group. She obtained a BA in psychology from Rutgers University.

Products and Services Offered

Uber’s main product can be described as a ride-hailing platform, through the Uber application, that allows users to access rides on demand at inexpensive prices, with flexibility of use and safety. It, in effect, enables users to request a ride/taxi via a location based application on their phones and connects drivers and passengers directly rather than through a call centre.

Uber offers a range of service tiers, from single riders and groups to executive limo services. UberX being your most common and cheaper ride, UberBlack being the pricier 4 seat rider and UberVan occupying a maximum of 7 riders. UberPOOL, offered in some cities, allows you to share your ride with another person and split the cost. Uber has even introduced a food delivery service, UberEats. This makes it easy for consumers to order from their favourite restaurants and get food delivered to their door.

Uber is planning to extend the offers many services and intends to offer more in the future. Uber is currently working on UberElevate and advanced technologies. UberElevate will be air transport with an aim of reducing traffic congestion, improving the environment with less carbon dioxide emitting and quicker commutes. Advanced technologies taps into self-driving cars and freight trucks that are safe, reliable and cost-effective.

Uber can also simplify business operations with UberFreight which helps to match truckers and shippers in a similar way to matching taxi passengers with drivers and Uber for Business for employee travel or giving your customer rides.

Market Analysis

SWOT Analysis

Strengths

• As the originator or creator of the ride-share platform the company has become the market leader, with significant benefits of scale and a competitive advantage in its platform development. Uber is by far the largest ride–sharing platform worldwide having more than 75 million monthly users (2017) and a 69% market share in the USA;
• Dynamic pricing strategy; Ubers policy of the higher the demand, the higher the price, has proved to be profitable for both drivers and the company;
• Reduced capital investment; as Uber does not own any of its cars, this has allowed it to keep debt levels relatively low and expand freely and quickly into many different markets.
• Uber has diversified into other profitable services such as Uber Eats and Uber freight. The established platform can be used to expand into other transportation industries.
• Uber provides cheaper prices and flexibility of service when compared to traditional meter taxis.
• Ubers driver and passenger rating system has been effective in fostering good relationships with drivers and clients while working bad drivers and passengers out of the system.
• Ubers app and ecosystem are user friendly which encourages people to continuously use the platform.

Weaknesses

• Questionable values and management culture caused by multiple scandals have damaged the Uber brand and even forced co-founder Travis Kalanick to resign as CEO. Kalanick’s early “win at all costs” strategy caused significant negative publicity for the company. These included:
• Dirty tactics against competitors, such as spying and false ordering of rides;
• Skirting regulations/licenses and city laws required by the taxi industry;
• User privacy and data breaches;
• Criticism of lack of diversity, racial and gender discrimination and sexual harassment.
• Uber is not yet profitable having made significant losses over the last ten years. Its borrowings are approximately $30bn in 2019.
• Ineffective driver screening has led to a number of crime incidents with customers.
• Driver retention and/or loyalty could be a problem for Uber. Drivers are independent contractors and not employees and therefore have no vested interest to stay with company should they receive better offers from the competitors.

Opportunities

• The retention of some $9bn from the IPO will allow Uber to expand aggressively into new markets;
• Merging with established competitors in cities around the world may be result in significant synergies;
• Mergers with established taxi industries could augment services and avoid competition;
• Driverless technology would make passengers feel even safer and would remove the need for drivers and the associated dispute of whether they are employees or independent contractors.
• By continuing to invest in enhancement to its digital platform, it will continue to grow the competitive advantage gap it has in the platform and will also allow it to work out any bugs within the existing platform.
• Establish processes that will help company to diversify its workforce, improve its culture and build its management team.

Threats

• New competition – Although Uber has the traditional transport competitors in almost every geographic location, the arrival of new hail-ride businesses could make a significant dent in its expansion prospects. The necessitated merger with Didi in China is an example of this.
• Lawsuits by drivers – Uber has had approximately 300 000 lawsuits filed against it by drivers disputing the “independent contractor” classification and claiming to be employees and therefore entitled to the benefits under employments laws.
• Government regulation threatens the Uber model as, should they be classified as a transport company rather than a technology company, it could cause them to pay penalties to the taxi industry.

PESTLE Analysis

Political

• The controversy that Uber brings as it enters new markets is a headache for authorities. Government or city regulation could prevent Uber expanding in some countries. Threatened by the arrival of Uber established taxi industries are likely to lobby officials to ban Uber as an entrant to the City. They will point to Uber questionable values and past behaviour as a reason to have them banned.
• Certain country may not respect the intellectual property rights of Uber and allow copy-cats to be created.
• The classification of drivers as employees or independent contractors will affect potential growth and profitability. Uber has often been accused of not meeting the minimum wage requirements;

Economic

• The unprecedented growth of the Uber worldwide has brought into question, whether the market disruptor is actually creating a net new amount of opportunities or employment or, whether, it is simple taking away from someone else and giving less back to the new job. In other words has it had the effect of creating jobs or not? Is there a positive impact on the GDP of a country? It is a debate in all sectors of the economy as regulators struggle to assess the benefits versus costs of allowing Uber access to its cities. It could easily be argued that the consumers will always seek the cheaper transport and regulators will be hard pressed not to allow them the Uber alternative.

Social

• In developed economies the ease of availability to the Uber platform through consumer smartphones make the frequent use all the more likely. In less developed countries, such as South Africa, growth may be limited due to lack of access to the internet and smartphones.

Technological

• The Uber technological platform is critical to its functioning and revenue generation. Technological glitches in the application would have a significant impact on the revenue and profits.
• For effective technological advancements capital must be invested into research and development.

Environmental

• What is the effect of Uber on the environment? Has Uber resulted in lower or higher CO2 emissions into the environment? While studies vary in their conclusions, we it could be argued that increased urbanisation is the reason for higher car emissions and not necessarily Uber;
• Ultimately though regulation on vehicles may affect Uber if their drivers have to switch to electric cars due to climate change.
• Uber may have to pay special taxes due to its cars producing large amounts of CO2, placing financial strain on the company and drivers.

Legal

• Intellectual property laws need to be enforced or Uber will no longer be able to differentiate themselves.
• Uber has to have effective health and safety regulations so as not to be fined by the government. (eg the amount of time a driver can be behind the wheel needs to be limited)

Valuation of Uber

We estimate a global market potential for Uber at $330bn per annum, with a significant global market penetration of 40% in 5 years. We place a valuation of $76.4bn on the Uber business which approximates its IPO valuation on 10 May 2019 of R79bn.

Uber is the largest hail-riding company globally, and is expected to more than triple its revenue over 10 years. This will be achieved through, firstly, strong global growth in the ride hailing market (including related logistics, such as Uber Eats, freight) forecast at 10%pa and secondly, by international consolidation. Its leading market position and size in the transport market will mean it will enjoy strong global networking benefits and will see its revenue share grow to 40% of an expanded global industry. The continued high sales growth, coupled with a low capital re-investment requirement, will result in a positive operating leverage culminating in a 22.5% operating margin by 2022. The recent $500bn investment by Toyota into Uber at a valuation $76bn, further underpins our forecast and views on its prospects.

The valuation model adopted is the Discounted Cash Flow (DCF) method, which discounts the expected future free cash flow of Uber, initially, over a 10 year growth period, and then determining the future cash flows beyond the 10 year growth period, known as the Terminal Value. The present value of these cash flows has been determined by discounting the future free cash flows at a cost of capital of 8%, based on the median of US companies. The risk free rate of 2.1% has been used which is based on return achieved on US Treasury Bonds with a 10 year maturity.

The DCF method is considered the most appropriate valuation model for Uber. A summary of the DCF numbers is attached on Appendix 1.

Market potential

Our model forecast a global market potential of some $330bn of which we believe that some 50% of this market is in the USA. This implies a doubling of the market in some 8 years at an annual growth rate of 9.4%.

We believe that these forecasts to be a base case scenario. Our positive outlook is under-pinned and driven by the following global socio–political factors:

1. Continued global urbanisation and growth of city living;
2. Cost of living increase in major cities and space availability for vehicles;
3. Rising vehicle costs along with increased fuel costs, has reduced the demand for car ownership;
4. Environmental considerations which are being driven by the millennial generation;
5. The convenience of pick up and drop off in major cities;
6. The affordability and flexibility in comparison to taxi or public transport.

The IPO will enhance Uber’s ability to grow its global footprint in the ride-hailing business. The substantial cash injection from the IPO will arm the start–up disruptor’s directors with significant fire power (some $9bn) to take-on and/or amalgamate and/or purchase Uber copycat models around the world. Uber’s Indian rival Ola is a classic example of a potential merger in the fast growing market of Asia. While there are many obstacles for such a merger including overcoming anti-monopoly regulation and socio-political issues, the fact that a major funder of both companies is Softbank Vision Fund of Japan, makes the deal inevitable in our view.

The merger of Uber business with Grab in South East Asia and with Yandex in Russia is supportive of our view. This strategy ensures consolidation and profitability in those geography’s. We forecast that Uber will continue on this strategy to grow and solidify profitability by merger or acquisition to consolidate the global market of share-riding. It is for this reason that we believe the global Uber market estimate of $300bn, with a 40% market share to be realistic in 10 year period.

In addition, the add-on potential of business models such as Uber Eats and other logistic opportunities, in our view, underpin the market potential. Further underpin is the continued world move towards urbanisation, making traffic and commuter movement of paramount importance for city management and for enhanced quality of life of its citizens.

STRATEGIC OPTIONS AVAILABLE

Keep the Autonomous Vehicle investment alive: artificial intelligence is evolving and Uber has the opportunity to incorporate it in its business operations. One opportunity that had arisen for Uber was the investment in driverless Autonomous vehicles. Uber has to get the timing of its investment and strategy in this array right as it could not only bring them great financial benefits but also increase the demand for and use of their platform. The success of this invention will put Uber a step ahead of its competitors because it will expand its customer base through even cheaper prices.

Increase efforts put towards profitability: Uber has experienced massive growth in its initial form of business operation and in its extension into other industries and operations. Uber, however, has not been profitable for the past years as it has made losses of $3 billion in 2018. Uber has to come up with strategies that ensure that ultimately the company will repay investors with profits.

Expansion of geographies: Uber always faces the opportunity of availing its platform to more international regions. Uber should look into investing in markets in India and Southeast Asia; these markets are small and cash-draining in the short term but can potential generate great returns in the long run. Uber should also decide which international markets it wants to reign over in the long run and then give those markets great amounts of attention and investments while focusing less on those that do not generally possess the potential to bring high returns in the long term.

Diversifying into other profitable services: Uber has in the past made a strategic decision to extend its platform beyond just the personal mobility industry. It was ventured into the food delivery and logistics industries though the creation of Uber Eats and Uber Freight. The company also expanded its offerings under personal mobility which Uber Pool and New Mobility; e-scooters and dockless e-bikes. Uber is an innovative company and is continuously coming with ideas of how it can expand and tap into new industries.

RISK AND RISK MANAGEMENT

Reputational Risk

Uber has received great amounts of negative publicity and media coverage in the past, particularly in the early years. It continues to be at risk of receiving more negative media coverage as past occurrences that tainted the company’s image may occur again. As the company lists, its reputation now hangs in the perception of the market and cannot afford further scandals.

Financial Risk

Uber has incurred significant losses in the past 10 years. The company will now under the scrutiny of the financial markets and will need to show that it can turn the business into a profitable venture. It will need to monitor and assess the gearing levels regularly and ensure that it does not disappoint the markets by not achieving financial guidance.

Product Risk

Uber is making substantial investments in new offerings, developments and technologies including Autonomous Vehicle Technologies, and investments in these spaces are expected to be increased in the future. Uber faces the risk of these products failing in development and failing to commercialize there, and not bringing expected returns. These is no assurance that that consumer demand for these products will exist and be sustained at the anticipated level or that any of the future developments and technologies will gain market acceptance.

There is a huge risk that Uber could experience security or privacy breaches or other unauthorized access to, use of confidential data, employee data platform user data. Any failure to mitigate or prevent and privacy breaches, Uber may face loss of revenue, there could be business disruptions and this could harm their brand.

Finally, Uber’s platform is highly technical and successful operations rely on the performance and reliability of internet, mobile, and other infrastructure that is not under Uber’s control. Disruptions in the internet infrastructure or failure of telecommunication networks could interfere the speed and availability of their platform.

Uber however, has invested significant resources to develop new products to mitigate the impact of potential interruptions to mobile communications systems.

UBER was established in 2009 by Garrett Camp, it is a transportation network company (TNC). Its headquarters are situated in California, San Francisco. Initially, Uber provided only a ride/taxi service but recently it has added many more facilities to its mobile phone app such as UBEREATS which is a food delivery application, a bicycle-sharing system, and a peer-to-peer ridesharing. Uber has completely revamped the meaning of the word “taxi”. It no longer means having to shell out exorbitant amount of dollars on rides. With a 69% market share in America, Uber has a 100 million users across the world (Scott 2016).

In a recent poll, it was discovered that Uber has over 3 million drivers globally, and this number continues to rise every day (Madrigal 2018).

Summary

“Where there is good, there is also the bad, and the ugly”. Uber has been under fire for many reasons in the past. These reasons range from safety issues to legal issues.

From their company lacking senior executives, to Uber going broke, to their biggest fear of driveless cars becoming a reality soon, and their pending legal battle with Waymo, Uber has its fair-share of controversies and issues going on around. But one of the largest and most controversial issue they have worldwide are their cases of misconduct, sexual harassment and assault by their drivers (Business Week, New York 2014).

Most of us have used or sat in an Uber at least at some point in our lives, and because of its popularity and cheap prices, we assume it is safe. That is not always the case. Reports from all around the world have female customers of Uber speaking up against the harassment, misconduct and even sexual assault they have been a victim of. Many of these women use the application after work hours, or a late-night party. These were the times when the highest number of reports against the drivers were filed (The Mercury 2018).

Since the company’s launch in 2010, thousands of female passengers have experienced unlawful conduct by their Uber drivers including rape, physical violence, threats, sexual assault and gender-motivated harassment.

This issue is no longer about a “rogue” driver who did not follow the rules, but instead it has turned into a widespread issue. Thousands of incidents have occurred in many countries where Uber employees’ drivers such as India, United Kingdom, United States, Australia and Canada. All these reports and incidents have forced several high-level Uber employees to resign from the company. An example of their former CEO Travis Kalanick, who left Uber in June 2018, faced criticism and backlash for fostering a culture of sexism and bullying at the company (Kukura 2017).

When a company as big as Uber faces these many number of crises in a short amount of time, it puts a company on its heels and increases difficulties on several fronts, including raising questions about the nature of its corporate culture.

However, another way to assess the overall situation and recognize the magnitude of it all for Uber is that these controversies and incidents are negatively impacting its four major stakeholder groups which are crucial for business success and legitimacy.

Analysis

Uber has been sued multiple times when it comes to cases pertaining to its safety issues. The reports and law-suits started surfacing back in 2011, but the company always chose to use the arbitration method in order to avoid these cases going viral in the public eye. Uber and its employees always liked to play it safe and they did for quite a few years. This was the case until the reports and claims started flooding the social networking sites, and the women who were the victims in these cases refused to accept the company’s hush-hush money. The incidents of stalking, threats, assault, attacks were shared across various platforms like Facebook, Twitter and Instagram. This was Uber’s worst nightmare come true. The entire company, especially the PR team was working day and night to curb these claims and charges against them and show the company in an innocent light. As more and more women started sharing their past disastrous experiences with the company and its drivers’, the more their reputation was becoming tarnished (Berger 2018). Earlier in 2014, Uber claimed they had no knowledge as to what was going on with their drivers and customers, but it is no surprise that they knew all along which is why the company tried so hard to keep everything under wraps. Things spread pretty fast on SNS especially when they’re negative. Initially, Uber failed to address the assault allegations by implementing sterner regulations on drivers, but instead prioritized on maintaining cost levels low for the company. This isn’t the first time Uber has been criticized on its background checks being too careless and lax.

In April 2016, a female resident of Washington DC, sued Uber for negligence and consumer protection violations, after she was physically attacked by one of the ride-hail company’s drivers. The victim claims Uber portrays itself as a safe method of transport for women, especially if they have been drinking or are too intoxicated to drive on their own, when in reality they are putting those women in harm’s way.

Two years ago, CNN reported that around 103 Uber drivers in the States had been accused of sexually assaulting, abusing, threatening and stalking their passengers over a period of four years. “At least 31 drivers have been convicted for crimes ranging from forcible touching and false imprisonment to rape, and dozens of criminal and civil cases are pending, CNN found. In June 2017, a Kansas City woman sued Uber after she was raped by a driver, claiming the company ignored warnings about the driver’s criminal history” (Abedi 2017)

After a very public corporate drama, and unfolding of events and stories, Uber’s Chief Executive Travis Kalanick resigned from the company towards the end of 2017. New York Times reported that Kalanick, who helped established Uber in 2009, resigned after five of the company’s major investors pursued his removal as the CEO.

“In recent months, the $70 billion company has been bogged down by some serious allegations of sexual harassment, gender discrimination, and a toxic work environment. The growing anger toward the company had also spurred an evacuation of top executives over the past months. Kalanick, too, has come under severe pressure, particularly for the way he has handled the allegations.”

We believe if Kalanick and his PR team handled the issues better and in a more professional manner, he would have stayed on as the CEO and the company wouldn’t have to endure criticism and losses on such a large scale.

But we also contemplate that Uber’s true unravelling began when Susan Fowler, a former engineer at Uber, published a blog post about her year at the company. In it, she wrote thorough allegations about sexual harassment by her boss and the HR department’s unwillingness to take any action.

The story was published on February 19, 2017 emphasizing on the widespread misogyny at Uber and a corporate culture which is hostile towards women (The Financial Times 2017)

How Uber Identified and Tackled the Issue

MEGAPHONE ACTIVITY

The safety issue we have been talking about had already turned into a crisis as it costed the company its reputation and millions of dollars. It is no doubt that Uber certainly took a long time to take the right action, but when it did, it tried to do as much right as it was possible to save the company’s status and start over to gain its customers’ trust back.

First, Uber’s former CEO issued a very public apology in London after the transport authority decided not to renew the company’s license to operate in the city.

Second, Uber launched a campaign in December 2017 called the ‘180 Days of Change: Building a True Partnership, Together’. The campaign promised to make meaningful changes to improve and mend the relationships between the company and its employees; the employees and the customers; and the customers and the company. Throughout this time period, 38 new features and improvements – from paid wait time to in-app tipping to 24/7 phone support were added. This campaign also enabled drivers to give the company feedback about its new products or policies. A few days after the launch of the campaign, there were slight positive changes in Uber’s biggest markets such as the Middle East and Europe (Schildkrout, Holt 2017)

Third, the company started taking small steps towards a more positive and progressive corporate culture following lawsuits, accusations that appeared to reveal aggressive business practices and a harmful workplace environment. Uber fired more than 20 employees after a deep company investigation for sexual harassment, bullying and other causes (Solon 2017)

Finally, in March 2018, a group of women sent an open letter to Uber’s board asking to be released from the compulsory arbitration policy in the app’s terms and conditions. The company decided to listen to its customers for the greater good, hence making a chief policy change for its US operations. Uber announced in the media that “it is ending its policy of mandatory arbitration for individual claims of sexual assault or sexual harassment by Uber drivers, riders or employees” (Snider 2018)

“It is also ending the requirement that victims sign a confidentiality provision preventing them from speaking about the sexual assault or sexual harassment they suffered — saying survivors will now have the option to settle their claims with Uber without having to agree to being publicly silenced in order to do so.”

MAGNET ACTIVITY

After issuing a public apology in London, Uber personally emailed apologies to all its current and former riders and employees. “Riders were told by email that Uber had recently ‘faced some hard truths,’ and, in the course of its rapid and enormous expansion, had ‘failed to prioritize the people that helped get them here.’

The company also said it had ‘fallen short’ in making sure riders, drivers, and staff were satisfied with their experiences, and gave users a run-down of Uber’s remedying actions since their internal controversies first gained steam last summer” (Kirka, Krisher 2017)

Uber invested in a 24-hour operating customer care service for its riders, drivers as well as employees. People here can lodge their complaints, feedbacks, suggestions and enquiries.

The company then took to its social media platforms and decided to expand it. Now in addition to its original page on Instagram and Twitter, Uber made different accounts for its major markets. For instance, UberIndia, UberUK, UberUAE, UberAustralia etc. This helps Uber be alert of everything that is going on its markets across the globe. This is a smart way of touching bases with one’s audience.

MONOTORING ACTIVITY

Uber monitors its customers and riders via its social media accounts which are sprawled over Twitter, Instagram and Facebook, and their interaction with each other. That is why the idea of creating a separate page for all its major markets was a good one. It enables the company to stay ahead of the customer’s demands and needs creating a sustainable relationship between the two.

After each ride a customer takes, Uber asks them for a rating for the driver out of five, a review of the trip and the app. And the same way the driver gets a short survey in which they rate the customer. These kinds of surveys make the company aware about their customer and what can be done in the future to cater to their needs better.

Evaluation and Recommendation

After facing backlash, criticism and losing millions of dollars in lawsuits, Uber transformed itself and the company’s entire corporate structure for the better. It started by issuing public apologies, sending apologies via emails to its customers, firing senior level executives, and launching a 180-day campaign. All of this was done to gain their riders respect and trust all over again. Uber made a number of policy changes including the removal of mandatory arbitration, introduced a more stricter background check for its employees including the drivers whether they were short-term or long-term. For Uber, it was deemed necessary to change its previously toxic work environment. The company was successful in getting its estranged customers back, but it still has a long way to go. Uber can take more such measures to make the customer’s experience enhanced and most importantly, safe.

For instance, they can start by hiring more female drivers because first, it would mean more employed women and second, it might make the female riders feel safer.

Another thing Uber can do to increase its safety measure is to make it mandatory to install a dash cam in each car employed under the company. This camera would record the events of the entire trip, both the parties (rider and driver) would be aware of its presence. This may be helpful in reducing crimes pertaining to physical assault, misconduct, sexual harassment as people are scared of being identified and caught.

Another alternative the company may apply is to make it compulsory for the drivers to go through an intensive training program. This type of program would cover the basics, like how to deal with different types of customers, what to do in an event of an accident, how to handle various situations and so on.

The forceful loads of neoliberal economies have obliged organizations to return obligations to legally binding laborers and subcontractors. The climb information development stages have in a general sense enlivened this example over past decade. ‘Sharing economy’ associations have such no matter how you look at it allocation of neoliberalism’s mechanical relations that another moniker—’the Gig Economy’— has prospered. Disregarding the way that financial specialists and purchasers have benefitted, common laborers occupations have been squeezed at the same time. This paper uses Uber as a relevant investigation to discuss how Sharing Economy components are only the latest accentuation of associations to found the neoliberal playbook, including (a) (mis)classifying experts, (b) taking an interest in routine shopping, and (c) using the most monetarily frail, rather than offering rise to another universe of work totally. The result is a swarming out of desk class work by unsteady ‘gigs’ that need authentic protections and preferences.

The climb of the web is, in any occasion somewhat, able. Propelled kinds of work have been depicted by piece-work, work irregularity, nearby under-portion for items and adventures. Regardless, this example did not begin with the web. Work has been downsized through neoliberal budgetary remaking, yet the speed, expansion, and scale has changed. Officially temporary delegates were the specialty of ‘work associations’ where occupations would a weeksprior or months, anyway now with another period of ‘sharing economy’ associations—for instance associations borne out of information advancement organizes—the occupations may last as pitiful as two or three minutes. This new industry has exacerbated neoliberalism’s advanced relations to the point where another term, the ‘Gig Economy’, has developed to portray that experts as of now have ‘gigs’ as opposed to occupations. ‘Work laws have not kept up’. The Bureau of Labor Statistics observes the nearness and the creating example of the gig workforce yet finds that, under its present strategies, it is incomprehensibly difficult to count what number of people are used as gig masters. These workers may fall under different classes, for instance, low upkeep, autonomously utilized, various occupations, or on occasion not be viewed as bit of the workforce using any and all means. Sharing economy associations, for instance, Uber, fight that they are urging individual to-singular trades and thusly they are not a business but instead just an enabling operator for dependent transitory laborers. Harris and Krueger fight that another order of worker, a ‘self-governing expert’, ought to be made to get these workers. Eisenbrey and Mishel discredit this, fighting these workers are delegates and should be legitimately set apart in that limit. The courts are beginning to agree with the last conflict, yet the methodology is still especially in advancement (ABC, 2019).

Uber has been on the cutting edge of this dialog. The association has changed the individual transportation industry in only a few brief years, making the association a subject of energy for different academic articles with request being raised about its business system, security record, client affirmation among others. This paper uses the association as a relevant examination to indicate how (a) how neoliberalism has lead to the devolution of business which has shaken out onto present day relations, (b) the techniques that associations use to frustrate pros from their rights and points of interest, and (c) how Uber has executed this neoliberal playbook to their—and their clients—advantage. The essential reason for this article isn’t to cutting edge the dispute that the sharing economy does not offer generous focal points to the basic workers—it does, particularly for their activity as buyers—yet rather that it is fundamental to understand the sources and impacts of the Gig Economy since it is quickly transforming into the new standard.

Bibliography

1. ABC. (2019, March 13). Four Corners THE UBER STORY Monday 18 March at 8.30pm. Retrieved from ABC: https://about.abc.net.au/media-room/four-corners-the-uber-story-monday-18-march-at-8-30pm/
2. Cohen, T. (2018, Jan). Being ready for the next Uber: can local government reinvent itself? European Transport Research Review, 1-11.
3. Essays, UK. (2018, Nov 18). International Challenges for Uber’s Expansion. Retrieved from UK Essays: www.ukessays.com/essays/international-business/uber-internationalisation-strategy.php?vr aef=1
4. Rowe, P. C. (2017, June). Beyond Uber and Airbnb: The Social Economy of Collaborative Consumption. Social Media + Soceity, 10-15.

Organizations such as Uber and AfterPay are currently being featured in the media as a result of difficulties they are experiencing as an organization. The ethics, organizational culture, and management involved in Uber and AfterPay can be portrayed through the experience of the workforce and the customers

Executive Summary

Uber is a transport company that allows people to book their transport using an app on thr other hand Afterpay is company which finances a product for the customers and they can pay for it later in instalments and both of these are being featured in news because of some issues related to management customers and ethics. The issues the organizations are facing can additionally be analyzed through the impact of macroeconomic forces such as political, economic, sociocultural, technological, legal, and environmental factors. The organizations also have several strengths which will further enhance their opportunity in their national market, and weaknesses which can be detrimental to their future.

UBER

Uber is a transportation network company that allows customers to access transportation via smartphones. The company is being criticized for low wages towards its workforce.

The positions in the labor force tend to be temporary as is dependent on the contractor who hires workers independently. To note, as example “Driver Andrew, who also declined to give his surname, said he worked 60 to 70 hours a week but, after four years with the company, was finding himself earning about $700 a week, less than the minimum wage of $719.20 a week (1). The neglect of the workers is evident as with a rally that “struck May 8, the day Uber went public. Joined by unions in London and in Melbourne, Australia, drivers from at least 12 U.S. cities participated in the first globally coordinated protest against rideshare companies Uber and Lyft(2).”

Uber Australia: SWOT

opportunities are prevalent in the company as they have a system in which drivers are rated which aids to account for issues faced in the drivers task performance so the customer has the option of cancelling a ride .They also have strengths that appeal to the consumer such as a low fixed investment, and with that also comes a strong brand recognition. Weaknesses Uber faces is the multiple accounts of sexual misconduct, posing legal threats as with lawsuits and protests against the organization.

Uber Australia: PESTLE

From a political standpoint, the Labor Party and Greens have been having a growing concern towards the effects of the gig economy on its workers as with fair work conditions and a decent wage. Laws that are being put into effect which may alter the success of Uber are the Sydney Lockout laws which have been introduced in 2014, as well as the change to a 24 hour public transportation system. The Lockout laws were created with the intention of decreasing alcohol fueled violence through the prohibition of going to night time entertainment centers such as clubs past 1:30 am. As told in The Guardian, Premier Berejiklian and the NSW committee informed that “We have always sought to strike a balance between limiting alcohol-related violence and maintaining a vibrant night-time economy,’ and so the effects of the laws are to be examined in 2019 (3). Uber is also affected economically if there is an increase in fuel, forcing the company to raise workers wages. Additionally, there are issues the company might face at the sociocultural level as with being susceptible to going out of business if a better form of a driving-technology relationship comes to form, especially if it is an improved environmentally friendly public transport system.

AFTERPAY TOUCH LTD.

Afterpay makes online shopping more efficient if money is not readily available through installments. The company is criticized for leaving individuals in debt.

Afterpay is a company that offers pay in four equal installments every two weeks for eight weeks. Afterpay is facing criticism in the news and suspicion of anti-money laundering laws. Afterpay is being investigated and to be assisted with AUSTRAC in result of such complaints. The company is being accused of “pushing one-in-six young people into debts they cannot afford(4).” It has been reported that the company gets 24% of its money from late fees as reported in 2017-2018.

Afterpay: SWOT

Despite of the various factors that impact the management of Afterpay, it has several strengths such as a strong free cash flow. Despite the strong free cash flow being a sign of a prospering organization, Afterpay also demonstrates itself to being inefficient in terms of financial planning as evidenced by their current asset and liquid asset ratios. Opportunities are probable in the organization such as lowering the inflation rate enabling credit at a lower interest rate to the customers of Afterpay Touch Group Limited. Threats to the organization as an example would be a limit to what products or innovations Afterpay can put on the market as they must uphold the standards of the Paris Climate Agreement.

Afterpay: PESTLE

Afterpay is another organization whose management can be examined through various macroeconomic factors., Afterpay has risen the concern of political figures as in the senate. They have been criticized with anti-money laundering laws and are facing legal issues for putting its customers in a financial crisis. The company would have issues setting dates to court as they would have to consider averaging times for specific cases, as they work with pay in installments. Additionally to legal considerations that factor into its management, Afterpay is also being influenced by technological and sociocultural factors. Afterpay mostly caters to a younger audience as it works primarily online. This makes the company susceptible to inexperienced customers who are also facing the issues of economic factors in Australia, such as a growing inflation. Working mostly with the fashion industry, there are also environmental concerns regarding product innovation and what products are being put on the market. Being restricted to the Paris Climate Agreement, Afterpay is influenced by the need of ethical considerations which uphold environmental standards, as opposed to traditional methods in the fashion industry.

Uber is a multinational company that offer private transportation. Almost ten years ago This company has made a splash in San Francisco by letting you order a car easily with your smartphone. Uber was founded a decade ago by Travis Kalanick and Garrett Camp in San Francisco, California, United States of America. The beginning of Uber has started in in the summer of 2008 when Travis Kalanick the successful mannered Canadian software designer, he was waiting for a cab in san Francisco. He has been waiting nearly half an hour for a cab that has promised him to be there in 15 minutes. So he just got in another empty cab that doesn’t belong to the company he ordered a cab from. So it has started as very simple idea, what if you could request a trip from your smart phone?, so he thought about doing an app that you just press pick me up whenever u want and wherever u are, and here where Uber comes out from. What has started that way to press a button to get a ride has made billions of moments and human connections as people around the planet go all kinds of places in all types of ways in help with the Uber application. After the making of Uber, the service was first tried in new York in mid 2010 by using just three autos and the official lunch occurred in San Francisco in May. Uber is now is currently operating in 58 countries and is valued at over 60 billion dollars and it was estimated that it would cross $100 million gross revenue within a year. It had crossed that goal in only six months.i It will be interesting while watching the company’s plan forgoing public by the end of 2019. Uber is now being calculated to be having a 100 million worldwide users and 69% of the market share in the united states, and although it’s not just expanding worldwide as a transportation service company but also as a food delivery service for restaurants and coffeeshops. Regardless when the Uber company has started they were veichles only and they had nine thousand customers and 1.8 million in their net salary, but now as we can see they are going further more, beyond how it was estimated. While it’s valuation to tech over and over, Uber has attracted more and more investors, Uber has also fought with a lot of rivals and directors as it has switched from a black car service into an professional logistics company with a more forwarded vision of looking for a future of self- driving cars. As it has opposed dangers from the taxi business and even it’s very own drivers.This report will discuss the methods by which the Uber company has grown in size and the reasons for choosing these methods it will also consider the political-legal, economic, socio-cultural, environmental and technological (PESTLE) factors which are shaping the external environment in which Uber is operating. Environmental factors of Uber , Uber’s impact on the earth is regularly moving.

Political

it has became many object that in 2014, in Paris , London, Berlin and Madrid the taxi drivers had staged a large scale protest against Uber , because the taxi companies have guaranteed that since Uber stays away from their costly permit charges and bypasses local laws it makes an unfair challenge between them. Uber has faced discussions. In it’s basic advancement , but Uber didn’t have clear regulations. So It was difficult to pinpoint the laws , if there’s an accident who should they blame the Uber driver or the company itself?. They have faced other investigations world wide , like France field charges based on advertising, the Netherlands ruled against Uber for their drivers not having taxi licenses.

Economic factors of Uber

The business that Uber works in is a sharing economy, so that means that the company’s economy is based on sharing physical or creative resources. In this case, the company let drivers to respond to customers and drive them to a location they wanted. It’s usually feels cheaper than taxis and much easier to schedule an appointment so why not. While all these achievements the company has made since it’s launch, but some countries have restricted its services for Uber having an unfair competition against regular taxis.

Uber has literally turned the traditional taxi industry on it’s head by using a way more friendly and an extremely easy way that moves you from point A to point B. As they started floating from city to city, the Uber team began clarifying their type of playbook, by refining the system in a more economical way.

Technological factors of Uber

Uber isn’t only changing transportation through their technology. Uber’s irritating innovation, super speed growth and steady contrast , makes it a highlight amongst the most engaging organisations to lead over the previous decade. Uber floating like water through social media, people explaining their trip experiences online spread and share stories. It has supported new clients to do the same.Clients are searching for another cheaper transportation solution and the it has successfully fulfilled this need. With just a little press on your smartphone saying pick me up. Clients make appointments through their app, and the estimate for the ride cost also appears in the app, it depends on many factors like drop off location, traffic and weather. The clients can also pay for the trip up front through the app too. And drivers who are on trip can respond to another trip if it’s on the same way. Although the app is super important to the company , the company can’t function any trips if the app just goes down or suffers any errors , so the company must ensure every thing is working, reliable and ready to go.

Legal factors

Uber faces much criticism, bans and attempted bans In areas around the world, the company must follow technical usage laws , copyright laws, and most importantly labor and employee safety laws.

Environmental factors

Many trust it expands traffic clog and fuel usage because of it’s many cars but studies has shown that Uber hasn’t increased congestion. Because most of people who uses Uber they have cars so it doesn’t make any differences. Although people they us Uber instead of public transportation so researches may need to compare the company’s fuel usage versus public transportations and own transportation to calculate analysis of Uber’s environmental impact.

The almost ten year old young organization not before too long it has became the one of the most esteemed companies on the planet. In any case, just with it’s development it has became many object And here were Uber has lost it’s license to operate in London where the company had 40,000 registered drivers in October 2017.that has thumped down it’s valuation from taking of $70 billion to $48 billion in it’s last funding round in January 2018. As Uber’s battle biggest battle yet comes too close, we just look back at how the company has became what it is today. On may, 2018 the Uber company has announced a sensitive offer that would push them to $62 billion. Earlier in 2018 a Japanese arranged SoftBank group, alongside with Dragoneer, a group of Japanese investors, they have successfully made a bid for 20% of Uber’s stock, while their valuation at this time was low. The deal has given Uber a very powerful partner in Asia that could help Uber to comeback and turn the wave , after they had been suffering after a few public errors. Despite the low valuation that the company has been dealing with , Uber today is valued more than the market surpass of general motors company and ford motor company. The journey of Uber an d it’s founder, Travis Kalanick, as it has moved from a plan to an overall wonder. Despite of working for not exactly 10 years , but the ride hailing monster has just buildup on a broad run down of debate that have guaranteed a section of it’s most senior administrators. The company is expanding the way the world moves. By flawlessly connecting riders to drivers through their application, they make cities increasingly available, opening up more probable outcomes for riders and more business for drivers. From their establishing in 2009 to their launches in hundreds of cities today. Uber’s quick growing worldwide existence keeps on bringing people and their cities closer.

As an outline of exactly how gigantic the company’s development has been, Uber has supposedly made more than 160,000 employments in the United States of America , alone and plans to make over a million more in the coming five years. But while the company is regularly held up as a wonderful case study on the capability of growth hacking, but the company has also faced some genuine difficulties originating from the short routes they have taken. The service is more helpful then any other customary taxi organisations, Uber offers a larger amount of client service then the traditional taxi organizations by employing drivers with charming identities. The administration enables clients to rate their drivers, which makes it simpler for the company to consider drivers responsible and improve their quality control.But One of the reason that the company has grown so rapidly is that it hasn’t been subjected to the same regulations and rules as most taxi companies.But many local governments has started announcing new laws could limit Uber from the growth hope. It’s regularly difficult for clients to co contrast the expense of the company service with taxicabs, in case that the estimating structure is altogether different. As Uber charges it’s clients at a lower rate for each mile, but also charges for the time the customer trip has taken. The company may need to clear up the occurrences ,because when the service are more financially, it pick up purchasers that are inspired more by the cost than the service quality. While the company has gained a remarkable reputation through the past years, but it has also faced criticism over a couple of outrages and a few clients guarantee that some employees had tricked them out of cash or explicitly assaulted them.

In conclusion

As we can see the company is a big shot in the mutual economy. It has been known for it’s efficiency , usability and controversies. Nations around the globe have been thinking about whether do they support Uber or don’t, but the company has been prohibited and restricted in many parts of the world. But the company never fails growing it’s popularity, even when the prices rise , it doesn’t affect them but they still stays competitive against taxis. Teenagers clients enjoy using the app to book rides and may also choose it over public transit because of the experience. But how much the company hurts the environment it needs more investigation.

Uber Technologies is a tech firm that has been in the industry for over 10 years. Uber is financially stable. Uber has had a substantial increase in its annual revenue over the 10 years. In 2016 their annual revenue was 3.85 billion dollars and in 2018 their annual revenue shits up to 11.27 billion dollars. The same impact can be viewed on their revenue growth. In 2016 the firm had a growth of 92%, in 2017 the growth increased to 106.29%. This year’s growth in the first quarter has increased by 42.08%. Even though the revenue growth is lower percentage-wise compared to previous years, the revenue has continued to rise. Uber’s market capital has also not had any big fluctuations in price. The company’s stock price has also been on a rise, the stock price is 45.13 dollars up and the company’s annual total trips have also increased from 1.8 billion in 2016 to 5.2 billion this year.

Uber is doing its best at helping the environment. They introduced uber pool allowing customers to drive to destinations together or even in the same car reducing air pollution. In London, most uber x vehicles are hybrids or electric cars which are eco-friendly. The company plans to help all uber drivers upgrade all their cars to electric by 2025 in London providing London with a cleaner environment. The same goes for other cities around the world such as Paris and Lisbon where uber is trying to work on a go green initiative. The uber pool project is successful where it is available, and more people are sharing more rides thus reducing the carbon footprint.

From the “uber vs car ownership” report we learn that car owners are using Uber as a means to travel reducing their carbon footprint by using their cars less due to increased fuel prices and also putting less wear on their car reducing their maintenance expenses, this helps the environment by putting one less car on the road. Uber drivers as stated in the guardian paper have newer cars as they are trying to provide the best service possible and at the end of the day they have to pay for the fuel themselves, this release fewer fumes compared to an older car which has older parts that are broken releasing more fumes into the atmosphere. Thus, having a newer vehicle is more beneficial than having an older one. This clearly states uber is respecting its Physical environment.

Some uber services are good but some services are poor. Uber carpool is a great service as it provides customers a chance to enjoy and experience well-maintained cars that are driven by professional drivers. The uber driver rating service is also a great add-in as it provides the customer the chance to rate their experience with the Uber driver. If the driver is unprofessional then the consistently low ratings by the customers are enough for uber to fire that driver out of the company. In cities like Los Angeles and New York, a bad rating can get a driver fired immediately. Uber tries their best to provide customers with the best services possible. This can also backfire sometimes as a lot of customers fall under a guilt trip to give an unprofessional driver a 5-star rating just so that uber drivers don’t get fired. Once fired from the platform they will not be able to make money. It is easy for customers to give false ratings making other customers suffer the same fate. Due to this Uber decided to release “unambiguously private feedback”. 15% of customers gave a negative review in private their fore allowing customers to express how they feel by not getting guilty about it; this increased their service standards.

Uber eats has been one of the uber technologies’ poor services. In London uber eats has been providing its customers with a list of restaurants with low health scores. In 2018 the food delivery platform provided its customers with 9 restaurants to order from with a rating of 0. This rating was awarded by the U.K food standards agency as they fell short in hygiene handling of food, cleanliness of the restaurants including their sinks, and pest control. All these ratings have been gathered by the FSA website as uber eats did not provide these ratings on their app. This was a very poor service provided to customers, who have trusted uber services in the past to be the best. Uber eats has since not recovered fully as there are too many customer complaints of their food being cold and late all the time. This is one of the uber technologies’ poor services. In countries like India and the united states recently uber eats is rated 1 star out of 5 with thousands of poor reviews. The service is getting worse as drivers have ratings lower than 3 stars and are still allowed to deliver food.

Over the past years, there are several cases that demonstrate how Uber technologies mistreat human stakeholders. Information on the EEOC website shows that in April 2018, 103 uber drivers were arrested on charges of sexual assault on passengers during this period uber required victims to have confidentiality agreements in order to settle these claims, this did not permit them to speak publicly about their abuse. The new CEO of the company Dara Khosrowshahi came up with new safety measures that allowed the victims to settle their claims through mediation in public or in private through arbitration depending on what they preferred. This gave the victims a chance to choose their outcomes. Secondly, the victims could settle their cases with the company without being in a confidentiality agreement, giving them the freedom to speak freely about what happened to them. Lastly, Uber technologies decided they will release a transparency document that will include data on sexual assaults and other problems that have occurred on the Uber platform. Releasing this document will hurt their brand image in the long run.

In 2016, Uber has also been claimed to have paid some of its employees below minimum wage payments. These drivers had claimed to have worked more than 70 hours a week to make basic money. This claim led to 83 drivers reporting they took less than national living wage home after paying costs off. Uber was asked to change this “sweating labor wages” before renewing their licenses in 2017. Since 2011 Uber has made pay-outs that total around $7.5 million to FCRA employment settlements. Uber also had an issue dealing with a racist tweet posted replying to their customer’s complaint, this involved the official uber Twitter handle replying inappropriately and being racist towards a driver. Uber recently paid off another settlement claim that cost them $20 million. Uber has had to invest a lot of money in the past years to settle all their claims as they try their best to keep their public image up to par. Uber has attempted to help its stakeholders recover from sexual abuse and harassment cases by paying their claims but not being able to stop it from happening makes it seem that the customers are not being treated with dignity and compassion.

The company has also been conscious of the communities around it. The company has always tried to help the communities grow. Uber has a program called “The uber community impact initiative”. They have partnered with Mary’s place (homeless shelter) and donated free rides to the shelter. These rides make their lives easier for example a mother of 3 at Mary’s place does not have to worry anymore about how her kids will get to school every day. Uber supports this family by dropping the kids off at school reducing the number of obstacles they face. As stated on the uber-blog platform “Uber NW Community Impact Initiative will contribute over $450,000 in financial assistance and rides to 30+ non-profits across the Northwest region” (uber-blog, 2017, para.2)

Uber allows local community centers to train drivers using their technology program and it promotes a scholarship program allowing drivers who want to further their education by providing that opportunity. Uber has been trying to increase the number of female drivers in their workforce and therefore it has been working with female advocacy groups to increase female uber driver percentage ratings higher, which stand at around 20% right now. Uber also works with public transit authorities to improve their service to allow people to use more public transit and fewer cars. In the long run uber explains a good public transit system is good for them. Most of their clients also use public transit to move around. For example, as phrased on the Washington technology site “often, they’ll combine a bus and Uber ride in the same trip and will take a bus, for example, to a dinner but then rely on Uber for the late ride home.” That makes traveling more efficient plus reducing the carbon footprint created by cars. This also reduces the pollution effects providing communities with a cheaper and more efficient way to travel around.

Uber has also released a video on sexual assault increasing awareness between riders and drivers that explains the steps and measures the company has taken by working with No More, they are an organization that increases awareness and are dedicated to ending domestic violence and sexual assault. Since this initiative started uber sexual assault cases have been plummeting. This awareness that has been created has provided a safe space for communities to thrive and grow.

In conclusion Uber has been having issues with paying their workers minimum wage in some areas such as Washington and sexual assault has been a major issue that the companies image continues to face. Uber has tried to support and increase awareness where it is necessary. Uber has improved its services by adding other features such as tipping the driver which allows drivers to make some extra money on the side with what they get paid for the trip. Uber has been able to pay claims and pay for repercussions that were caused by their services. Uber has tried establishing new money routes through uber eats which has been less successful compared to the uber taxi platform. Uber has become more socially responsible. Even though they have lost a lot of money to claims. They have been able to uphold their image this far. Uber has made mistakes in the past, but they have been able to stay socially responsible towards their customers and the community by supporting them and providing help when needed giving them the chance to thrive in today’s world.

Nowadays more and more startups and original ideas appear every month. Not all companies become successful, and not all startups can earn millions. But sometimes an original and socially useful idea becomes extremely popular. One of such enterprises is Uber – the most expensive startup in the world.

The Uber brand is known worldwide as a convenient online brand for renting cars or providing service, which can be used through a special application or website. In addition, the company provides other services, such as the delivery of products or other goods. The company is presented in 65 countries and more than 600 cities worldwide. Each day 15 million trips are completed. There are over 16,000 employees at Uber as of 2017.

In 2008, two friends in Paris were discussing business plans and ideas when they were forced to go on a journey. They spent more than an hour searching for a free taxi, being almost in the center of the city. At that moment the idea of an original startup, that would help tourists and citizens to get a taxi, was born. Another entrepreneur, Oscar Salazar, joined the team. Just a year later, UberCab was officially registered in San Francisco, and in 2010 the name was modified to Uber, and the prototype of the project was ready. The management of the company first decided to test the program themselves, so they registered themselves as the first taxi drivers.

Even though Uber is one of the most profitable and successful companies known worldwide, there have been quite a lot of scandals and issues lately with this enterprise. Uber is an example of the so-called participatory economy, when resources, in this case, road transport, are shared. The new model of services caused and continues to cause controversy and dissatisfaction.

Unlike most of the companies, the founders of Uber did not seek to develop the project entirely on their own funds. Almost from the beginning of the creation of the company, they actively took investments from outside companies and entrepreneurs. Jeff Bezos, Menlo Ventures, Goldman Sachs, and many other business projects were invested there. After this, the investment stops because Travis Kalanick and Garrett Camp take the lead. They decided to receive funding in several rounds, each of them was determined by themselves. But as soon as Uber was again allowed to make investments, amounts were worth billions of dollars. Founders actively expanded through foreign investments in order to open a company in other countries. So, Uber for several years captured almost the entire taxi market in the world. Despite this, on June 20, 2017, there was news that the founder and CEO of Uber company Travis Kalanick resigned from his post. According to experts, his departure eloquently indicates that even the most successful business will have problems in the absence of a coherent corporate culture. Over the past months, the company, one after another, has been plagued by scandals that cost both top managers and ordinary employees.

In recent times, Uber has been involved in several scandals. One of the most notorious was caused by the publication of an ex-employee of the company Susan Fowler. In February 2017 she posted about corporate culture in Uber. Ex-employee spoke about the discrimination, harassment, and sexism that flourished in Uber. The company commissioned former US Attorney General Eric Holder to conduct an independent review of these complaints. According to Fowler, she received an obscene offer from a senior employee on the very first day of work, after which she turned to the personnel department with a complaint. However, she was refused in the personnel department, explaining that, although the proposals of the superior person are obvious sexual harassment, the employee is a good worker, and this is his first violation, so the move will not be given. She was offered a choice – to remain at the current position and face the inevitability of ‘retribution’ or leave the team. According to Fowler, she went to work in another team and soon learned that other women employees of the company faced sexual harassment and sexism at work as well. As a result of the investigation, wrote WSJ (Bensinger,2018), Uber fired more than 20 people. More than 12 thousand people work in Uber worldwide. About 36% of employees are women, according to their own company data.

In June of 2018, billionaire David Bonderman left the company’s board of directors after a sexist remark. At a meeting on the fight against sexism in the company, to the proposal of another member of the board of directors Arianna Huffington to increase the number of women in the council, he replied that such an increase would provoke ‘more talk’. Later he apologized for his comment, calling it ‘reckless, inappropriate and unforgivable,’ and hurriedly left Uber.

Another issue that Uber was claimed for was a deception of authorities. In March 2017, The New Times reported about Uber’s development and usage of special Greyball programs, where the company could track orders in countries where service activities are prohibited. In case the order came from a police officer or official, Greyball changed up real cars on the map for non-existent, canceled the order, or hid the available cars. According to the publication, the program has been used since 2014 in Paris, Las Vegas, Australia, and South Korea, as well as in Oregon and Portland.

In February 2017, the New York Times published an investigation into Uber’s internal culture based on interviews with 30 former and current employees of the company. It spoke not only about the harassment of some employees to others but also attempts to harm each other. In March of that year, President Jeff Jones, who had not worked there for half a year, quit Uber. A source in the company then told the BBC that Jones’s resignation was a complete surprise. According to BBC (Lee, 2017) correspondent in San Francisco, Dave Lee, Jeff Jones resigned after he was not offered the post of chief operating officer. This is a new post that Uber decided to create in an attempt to stabilize the situation in the company after a series of scandals.

Also, in 2018, in the San Francisco Federal Court, Uber filed a lawsuit by unmanned vehicles, part of the Alphabet holding company. The plaintiff claimed that the former Waymo employee Anthony Levandowski copied more than 14,000 confidential files in December 2015 and transferred them to Uber. Uber denied this, claiming that they did not use any commercial secrets when working on the drones. However, the court ordered the company to return all documents to the plaintiff and remove the lead engineer from work. Levandowski was fired later. He himself was silent during the trial, using the Fifth Amendment of the US Constitution (FindLaw, 2019), which allows him not to testify against himself.

In this era of data and technology, competition for customers is fierce across various industries and evolving every day. Thanks to that, some truly great business innovations have surface and take the world by storm. It is hard to ignore names like Uber, Airbnb, or FedEx… whose innovations the way we think and the world we live in forever. Innovations come in various forms, but most of them make it easier for not only the customers to achieve certain goals, but also for the businesses to have a better understanding of their customers and control the quality of their goods or services. In the scope of this paper, the case for Uber and its innovation that disrupted the taxi industry will be discussed, with the focus revolving around the customer ordering process and the value of the information that Uber gathers.

Uber was founded from the idea of lowering the black-car service using your phone. In June 2010, Uber’s service and mobile app were officially launched in San Francisco. Originally, the service only included black luxury cars pricing at 1.5 times that of a normal taxi. In 2012, Uber introduced UberX, an option that allowed people to drive for Uber with non-luxury cars given that they had passed the requirements regarding car standards and background checks (Hartmans, 2016). Starting in April 2013, UberX started allowing drivers to use their own personal vehicles, lowering the price quickly.

As of 2017, Uber has reached 75 million customers, 3 million drivers, completed 10 billion trips worldwide, an average of 15 million trips each day, and expanded to 65 different countries. From a brilliant idea, Uber has turned into a global phenomenon that almost everyone has heard of.

Uber’s core service is matching customers with drivers using the Uber platform. The GPS on the customers’ smartphones allows their locations to be transferred and utilized to match them with the closest drivers with the vehicles that suit their needs. The customer would request an Uber ride on their phone and wait approximately 5-10 minutes for their drivers to come and pick them up. The vehicle’s whereabouts is continuously updated within the Uber app, and when the driver arrives, a text message will be sent to the customer’s phone. Throughout the whole process, it is possible to contact the driver via text message. Furthermore, the customers do not have to go through the payment process after each trip since their payment method has been saved within the Uber app.

To sum it up, the classic taxi process does not give the customers much information about what they are getting into, does not give the taxi drivers anything more than where the customers are very hard on the operators to organize a pickup. On the other hand, the Uber process gives customers clarity of what the experience they are about to have (who the driver is, what is the driver’s rating, how long it will take him/her to come, what kind of car is going to show up, how much the trip will cost prior to finalizing ordering, and how long the trip will take…), gives drivers some insight into the next trip (who the customer is, what is the customer’s rating, where the customer is, and an approximate amount of money they will make from completing the trip); and gives Uber a lot of information on the customers’ behaviors that can be fully utilized to make everything more efficient and to charge the customers effectively.

Let’s dive into why this process innovation have made Uber into one of the most recognized and successful businesses in the world. In the scope of this paper, only the benefits of customers and Uber are discussed.

Firstly, this process innovation makes the traveling experience much more convenient for the customers. Instead of having to call a taxi company, going to a taxi station, or waiting aimlessly for an empty taxi to pass by, with Uber, the customers can select a vehicle that they prefer (luxury or normal, big or small, shared with others or private) at the tap of their fingers, which helped Uber match them appropriately give the correct pricing. Instead of having to describe where they are, where they want to get to, as well as how to get there efficiently, with the GPS on their phones, the Uber app tells the customers the estimated shortest time it would take to get there, the exact price they will have to pay and how long it will take their vehicle arrives, as well as where the vehicle that has been assigned to them currently is. Furthermore, the customers do not have to take out their wallets and worry about payment at the end of their trips since their payment methods have already been saved in the Uber app. Last but not least, Uber does not feel like a taxi, since these cars do not come with the classic taxi look, making it feel like some close friends or relatives have dropped the customer off at their destination. At the end of the day, most of the frustrations and inconveniences associated with a taxi ride have been addressed.

Secondly, this process innovation makes it easier to control the quality of their service. First, let’s look at the rating system that exists for both customers and customers. At the end of each ride, both customers and customers have the opportunity to rate their experience from 1 to 5 stars, with the option of leaving a comment if they want to. The ratings are of course anonymous, making this act a lot more reliable. Drivers that do not meet a certain rating standard are not allowed to drive for Uber anymore and customers with a good rating over a long period of times are granted with extra benefits like a free upgrade to a premium vehicle or prioritized booking. This simple system gives incentives for both customers and customers to behave since as for the customers, there are rewards and for drivers, there are consequences. This method seems much more effective in keeping both parties in check. Particularly for the driver case, since with the classic taxi system, the only way to complain was to memorize the driver’s name and his/her vehicle number, then to file a complaint or to call a hotline, which is usually a lot of work and an unsatisfied customer might just forget about it all. With this innovation, Uber gets free insight into what they might improve in general, and which drivers or customers need additional attention. Second, with every available vehicle in the system and a map of current customers immediately displayed with every order, Uber can effectively determine which driver is best for picking up a certain customer to ensure the shortest possible length of the trip. This is not feasible for the classical taxi service since not all taxi drivers report back to the operators after having picked up a customer and it is impossible for the operators to determine which taxi driver would be best to pick up certain customers.

Last but not least, this process innovation makes it possible for Uber to earn additional income with various tactics. First, the price surging feature. Uber can effectively charge the customers a lot more money if the demand is high at a particular time of the day around certain areas. This brings back valuable added income that the traditional taxi service does not have. The additional income generated can make up for a slow flow of completed trips during rush hours, for example. The customers are also more willing to pay the additional fee, knowing that the service they are requesting is in high demand. Uber does not force the customers to pay the higher fee, since the customers are always informed of the current price surging period and are presented with the fees that they will have to pay before completing an order, thus giving the customers a sense of control, making them less frustrated with the extra fees they have to pay. Second, the car type features. Before completing an order, the customer have an option to select various types of vehicles: bigger 7-seat cars, normal 4-seat cars, or premium 4-seat cars. Each car types comes with a different price chart. However, what is interesting is that the customer can get any of the car types when they just order the normal 4-seat cars, but they will have to pay more money if they want any other types. This brings back valuable added income when the customers’ demands are met. Last but not least, this process innovation makes it possible for various customer-focused campaigns to boost popularity and usage. Since everything is run through the app, promotions and perks can be easily sent to any group of customers. This allows Uber to encourage more usage from casual customers and bring back customers who have stopped using the service for an extended period of time. These type of promotion tactics is very rare with traditional taxi companies.

With its business process innovation, Uber has disrupted the whole taxi industry, and changed the way customers think about services that get you from point A to B. The business innovation not only helps Uber operates smoothly, efficiently, and profitably but also helps Uber customers have a convenient experience getting to different destinations, especially in a foreign country since you do not need to know the language to be able to order an Uber. Uber is a prime example of innovation gone right. It all started with the desire to meet a need that has not existed before that blends in well with the modern technology and data era. When you have found a way to do things more efficient (finding the fastest route), to tap into valuable information that is barely utilized before (being able to keep and analyze customers data on all rides), with better quality (ratings help control behaviors, meeting customer’s demand with up-front pricing, vehicles options, whereabout of vehicles), it is not hard to see Uber becoming such a huge success.

Uber Business Model connects and manages a network of drivers who offers the services and passengers (demand) through a technology platform that offers cheaper transportation through a phone application. The business model is also referred to as multi sided platform business that uses a platform has revolutionized urban transportation.

In order to access Uber services, you need a uber app installed in your mobile phone and once the app is opened, you can enter the destination which enables to locate a driver through the platform. The driver drives you to the destination using the same app which has the navigation system.

The uber application runs an algorithm to determine the fare based on a number of parameters like travelled distance, time elapsed , fuel used etc . In addition, the Uber used a rating system for the driver which is rated by the rider and at the same time the driver rates the passenger.

Few features of the uber business model include:

1. It has a simpler structure and has no inventory which enables uber to realize lower costs. It also does not pay for the fees as it is not a taxi service provider but a technology platform which implies it only provides a platform for the passengers and drivers to transact
2. Uber driver are considered as partners and not as employees and they work part time basis which has much more ease in becoming a uber driver.
3. Due to presence of the algorithm who works on the demand and supply situation, increase uber rates to ensure reliability when the demand is not met and thereby more supply of driver who are interested in working with uber. The algorithm works in such a way that the demand and supply is accurately measured depending on the shortage/excess and pricing adjusts accordingly.

Revenue Model

For each ride, the total fare received from the passenger reflects the payment of the payment, fees, taxes and the commission for uber. In addition, the company also makes income from the promotional marketing campaigns that it runs for the partners.

Customers

The customer segments considered of two types of people – passengers who ride in the uber and the drivers. The customer relationship side on the other hand looks at the passengers, drivers and regulators

Employees

The drivers who constitute the major part of the workforce is not considered as employee but as independent contractors and does not enjoy the benefits which are offered for the regular employees. The company has other regular employees who are part of running the technology platform.

Products

The product offered by uber is a technology platform that offers ride hailing services for customers looking for rides to different destinations, delivery of food or even shipping along with people selling those services.