Abstract
Nowadays transportation is a significant part of our life. The taxi and online ridesharing platform had become popular to brings us to the exact location of our destination. Taxi has monopolized transport from door to door for a long time ago until a company providing the same service known as UBER entered the market recently. This paper aims to focus on Uber’s service, and describe its competitive environment compared to other types of transportation services. It will also address the UBER service market segmentation and its market strategy.
Introduction-Uber
UBER is a touchy development and it’s consistent marketing strategy and organizing made it one of the most entrancing organizations to rise over the previous decade. The Ridesharing firm named Uber Techlologies Inc started UBER in 2009, before long developed to turn into one of the largest private starts up service in the world. The service was initially launched in San Francisco and eventually expanded around the world. UBER entered in Australia in October 2012 since then they are capturing the high market share in the area of ridesharing service. UBER helps to connect the customer with local rider and driver through its uber application. (Uber Technologies Inc., 2019)
Uber brought the idea of sharing ride drops and proved itself as a successful multi-billion-dollar company. Later it comes with quick development inside a frame of time. Since it started the concept of ride share other company comes in market with same concept so, there are dozens of competitors for Uber. However, the creator of the idea is currently leading a ride share market with a larger market share.
Competitive analysis and environment scanning (UBER)
There are various competitors in the market for transportation services. UBER is a newly and widely demanded service for transportation however other services like trains, public busses, taxi, and other ride sharing platform can easily wash out dominancy of Uber in market without effective conduct of market research and strategy. There are several similar apps like Uber such as OLA, DIDI, Lime who also slowly capturing the uber existing market (The Economist, 2015).
Swot Analysis of Uber
SWOT analysis helps to access the competitive stance by identifying its internal strength and weakness and external opportunity and threats.
Strength:
- Strong and easy to use platform with minimum operational cost
- On demand service with reasonable price with various feature transport vehicles.
- Various payment methods like card and PayPal.
- Wide area coverage with on time service facilities.
- Strong brand equity with give it a huge market share benefit.
Weakness:
- Depending on technology: people can’t access this service without the internet and its application and only an electronic payment service is available. Where the IT is not available uber ll unable to perform on that area.
- Poor image on work ethics: as the uber treat its drivers treat them as a contractor not as an employee.
Opportunity:
- Increasing uses of internet and information tech help uber to grow rapidly.
- Uber potential easily shows that they will get into driverless technology and other special transportation like emergency vehicles.
- Accountability and Performance:due to the lack of connectivity, fare cost and time people are choosing uber over cabs and taxi.
Threats:
- Increasing competitors like ola, didi share, lyft, lime etc.
- Increasing lawsuit from other taxi drivers because it creates a danger for the cab business (Paayal Zaveri, 2018).
- Senior group and unskilled group who don’t know about technology still using a method of traditional method of transportation.
Despite various challenges Uber is still expanding its services around the globe.
PESTLE Analysis
Political:
Uber has created a prime political debate due to its ride sharing economy. Not only that, but Uber is also creating a disruptive and negative effect on the traditional cab and taxi services as a result several taxi unions had went on strike (Frue, 2017).
Economic:
There is no doubt that uber is creating a employment for driver through its sharing economic. It is beneficial for both drivers and customers. Its platform is mainly virtual which creates low operating costs for management. As a result, customers get low fare transport and drivers get more pay.
Social:
It is creating a positive impact on society. Uber is safer and creates a mutual benefit between customers and its drivers.
Technology:
The idea of uber is a great invention of 21 century, which is making a people life easier through technological platform.
Environmental:
Uber is also concerned about environmental issues so they are now moving in uber green feature in which they are providing a electric and hybrid vehicle.
Legal:
In several countries uber not only facing a tax issues and lawsuit but also a human resources issue. So, the increasing demand of uber has come as a challenge for legal authorities
Demand forecast for uber:
Forecasting a demand and matching a demand with supply is a key element for the successful business model. Forecasting helps to set an effective marketing strategy and market segmentation. With forecasting Uber help to reduce surge pricing event to occur, alert driver for upcoming demand possibility, increase overall customer satisfaction as well as help to take into account changes in availability of other forms of transit, new development, etc
Uber can use various sources to gather the market demand data such as from government transportation provide website, local cab provider and other ridesharing company. The internal source back plays a important role in forecasting and tools like linear programming, modeling technique can be used to forecast uber future demand (Quora, 2019).
Segmentation, targeting, positioning in the Marketing strategy of Uber
Segmentation
Is the process of finding homogeneous characteristics groups. Uber is using a demographic and geographical segmentation for provide a level of services and its respective fare pricing. Such as in Australia user is providing a UberX, uberXL, uber black, uber select and more all of these services have its different level of comfort and features (Worstall, 2016). Due to the geographical differences he operating cost of uber is different so the fare is different in those places. Both geographical and demographical segmentation is significant because Uber need to understand the need of “on demand transportation service” over public transport services of the target customers.
Targeting:
Differentiating targeting strategy is utilized by Uber in order to raise its market share and increase it revenue. It is then necessary to identify the most profitable segments and to decide which segments will be served (Anthony, 2018). If we be specific on the type of differentiation, then we can call it “Cost based differentiation”. Because of it online base on demand ride sharing service has a huge pricing advantage to the end customer when they compare Uber with the publicly available taxies and other competitors.
Positioning:
User benefit based and pricing positioning strategy is used by Uber to attract customers from different strata of society. Because day to day travel is a huge cost to customers, positioning on the basis of Economy makes a huge difference in the mindset of the customers.
Conclusion
Overall, uber is defining itself as the leading service provider among the several competitors. As they are a creator of the ride sharing service in the market, they are having a competitive advantage over another providers. Uber is gaining popularity due to its technology based on demand service features and the cost-effective option as compared to traditional taxies and cabs. With so much competition in industry uber future seems to be growing year by year due to it increasing demand.
References
Anthony, M.A.M., 2018. Market Segmentation, Targeting and Positioning. In Travel Marketing, Tourism Economics and the Airline Product. Springer, Cham, Switzerland. pp.69-83.
Frue, K., 2017. PESTLE Analysis of Uber. [Online] Available at: https://pestleanalysis.com/pestle-analysis-uber/ [Accessed 2019].
Paayal Zaveri, D.B., 2018. The new tax law creates a huge boon for Uber and Lyft drivers. [Online] Available at: https://www.cnbc.com/2018/02/05/uber-lyft-drivers-and-other-contractors-get-2018-tax-law-benefit.html [Accessed 2019].
Quora, 2019. https://www.quora.com/How-does-Uber-predict-ride-demand. [Online] Available at: https://www.quora.com/How-does-Uber-predict-ride-demand.
The Economist, 2015. Taxis v Uber Substitutes or complements? [Online] Available at: https://www.economist.com/graphic-detail/2015/08/10/substitutes-or-complements.
Uber Technologies Inc., 2019. About Uber – Our Story – Vision for Our Future. [Online] Available at: https://www.uber.com/us/en/about/ [Accessed 2019].
Worstall, T., 2016. Of Course The Uber Model Translates: Just Look At Libraries For An Example. [Online] Available at: https://www.forbes.com/sites/timworstall/2016/04/01/of-course-the-uber-model-translates-just-look-at-libraries-for-an-example/#24c99ab950da [Accessed 2019].
