STRATEGIC PERSPECTIVES OF ONLINE BUSINESS

Strategic Perspectives of Online business

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SRATEGIC PERSPECTIVES OF ONLINE BUSINESSS

Table of Contents
1.0 Why Uber is set up?..............................................................................................................2

2.0 Background of the Company................................................................................................2

3.0 Business Model of Uber.......................................................................................................4

3.1 Supply Chain Management...............................................................................................5

3.2 Digital Marketing Strategy................................................................................................6

3.3 Maintenance and Control..................................................................................................7

4.0 Key Security Concerns of Uber............................................................................................8

5.0 Recommendations.................................................................................................................9

6.0 Conclusion..........................................................................................................................10

7.0 References...........................................................................................................................11
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1.0 Why Uber is set up?

Passengers never prefer staying in the rain, storm, sun or waiting for hours for a cab, especially
when they need to settle any urgent matters. In fact, the idea of setting up Uber initially came
into the mind of its two founders, Travis Kalanick and Garrett Camp when they were unable to
find a cab for ride in the street of San Francisco back in 2009 (Blystone, 2019). Uber was set up
mainly to provide alternative cab (initially) as well as ride-sharing (later on) services to those
passengers who prefer safer, faster and cashless mode of transport within a city (Mohamed,
2019).

2.0 Background of the Company

Uber was launched in 2009, being based in San Francisco, USA, by Travis Kalanick, Garrett
Camp, Oscar Salazar & Conrad Whelan and was named ‘UberCab’. The company changed its
name from ‘UberCab’ to ‘Uber’ in 2011 when the taxi operators in San Francisco made an
official complaint against the company (O'brien, 2012). Uber made its first international presence
in 2011 when its penetrated in Paris, France (O'connell, 2020). Uber moved into India and China
in 2013 and 2014 respectively. Uber is currently present at over 700 metropolitan cities in 63
countries worldwide (Uber, 2020a). As of 2018, the company completed 10 billion trips
worldwide, accounting for completion of 14 million trips per day. Uber also has a diverse
workforce of 22,000 employees around the world while its monthly aggregated active platform
consumers and drivers were 91 million and 3.9 million respectively (Uber, 2020b).

Figure 1: Uber history in timeline

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Source: Elluminatiinc.com (2017)

Uber offers diversified services beyond cab and ride-sharing. Uber launched its first diversified
service, ‘Uber X’ that offered cheaper ride service in July, 2012. The company then began
opening-up other services almost in every latter year such as, UberRush (in April, 2014),
UberPool (in August, 2014), UberCARGO (in January, 2015), UberEATS (April, 2015)
(O'connell, 2020). Uber currently provides other services such as, BLACK (ride on luxury
vehicle), MOTO (ride on motorcyle), UberAuto (ride on Auto Rickshaw), Lux (ride on upper-
class vehicle) and Green (ride on electric or hybrid car). A report by Chan (2019) discloses that
Uber topped the list of downloads in 2018 in both Google PlayStore and App Store.

Figure 2: Top ride-sharing apps worldwide in 2018

Source: Chan (2019)

In May, 2019, the company went public on the New York Stock Exchange (NYSE) with a
market value of US $75.5 billion (Reddy, 2019). Uber’s valuation has been rising significantly
since its establishment (Woodcock, 2016). However, the company recently saw its record fall of
valuation at US $52.3 in September, 2019 (Strauss, 2019).

3.0 Business Model of Uber

Business model canvas, invented by Alexander Osterwalder, is a popular way to briefly
showcase the components of overall business of an organization (Uenlue, 2018). The business
model of Uber includes key partners, key activities, key resources, value proposition, customer
relationships, customer segments, channels, revenues and cost structure (see Figure 3).
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Figure 3: Uber business model canvas

Source: Uenlue (2018)

Uber business model is established upon three types of key Figure 4: Reasons for
partners such as, the drivers, and the investors and the lobbyists. drivers’ choice of Uber

The drivers are the core-driving power of its services, as they

bring in their own cars and help the company avoid vehicle
purchasing costs. The investors are those who help the company to
grow using their invested capitals and funds. The funds are used to
cover operational costs and other marketing costs. Some of the
notable investors of Uber are Adam Leber, Babak Nivi (founder of
AngelList), Robin Sloan Bechtel (founder of Bechtel Ventures)
and many others including its founders (Bloomental, 2019). The
lobbyists are those who help the company face the initial obstacles Source: Bensen Strategy
conveniently when Uber penetrates a city. However, it may come Group (2015)

with costs. In 2018, the company incurred US $2.3 million on

federal lobbying (Nix, Brody & Leatherby, 2019). There are also
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other partners of Uber ranging from specialized technology and infrastructure developers as well
as financing and insurance providers.

Key activities of Uber aim at expanding operations worldwide and reducing costs and relevant
barriers. Therefore, Uber performs several core activities such as, make all transactions friction-
free, engage the current and potential customers, expand to more cities and analyse data to
improve services. The key resources of Uber are its brandname, skilled staff and mobile apps.
The company offers value for drivers and customers (riders) separately. For drivers, Uber offers
low-cost joining and convenient income process whereas for customers, it offers cashless, faster,
cheaper and convenient ride services than existing transportation modes. A 2014 survey revealed
that 91 percent of its drivers chose the app for income generation (see Figure 4).

3.1 Supply Chain Management

Uber connects people to people via a smartphone app and offers the first search engine for
people to people (P2P) communication. Uber has initiated a new way in the arena of supply
chain management, namely, Uberization, a term for leaders in sharing economy. On its supply
side, Uber depends on drivers who use their own cars and the Uber app to provide ride services.
The GPS technology helps both the customers and the drivers to locate each other’s location. The
supply side of SCM for Uber also includes technology developers. The demand side of SCM for
Uber includes the customers who are interested in fast, convenient and safe rides within their
cities (see Figure 5). There are also government, legal entities and local cab authority that Uber
needs to effectively manage as well.

Figure 5: Uber’s supply chain

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Source: O'Marah (2017)

3.2 Digital Marketing Strategy

Uber’s digital marketing strategy includes its rebranding with new logo and promotions on
Facebook, Instagram and using social influencers. In 2018, the company rebranded itself with
simpler logo design that is visible on its app on mobile screen (see Figure 6), to take a place of
belonging in the customers’ mind. Uber heavily depends on Facebook for digital marketing as its
Facebook page contains over 21 million likes. Uber also uses Instagram for various visual
updates and promotions. Moreover, the company has made contracts with more than 15 social
influencers who post digital content promoting Uber (see Figure 7) (Ong, 2018).

Figure 6: Uber new logo design since 2018

Source: O’Kane (2018)

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Figure 7: Twit of a social influencer

for Uber (on right)

Source: Ong (2018)

3.3 Maintenance and Control

Uber encourages the drivers to keep respective vehicles clean and well-maintained to avoid any
inconvenience. The control mechanism of Uber services includes rating system from both drivers
and customers’ end. The customers can view the existing rating of a driver and choose the driver
based on high rating whereas, the driver also has freedom to rate the rider after completion of a
trop. Uber emphasizes on the rating system and the app automatically displays rating options and
prompts both the driver and rider to rate each other. In May, 2019, Uber announced that it may
ban the riders (customers) with low ratings (Shaban, 2019).

Figure 8: Customers can rate a driver on a scale between 1 to 5 where the customer can choose
any of the options of his/her choice (on the left), the driver can view his/her current rating and 5-
star (very good) trips (in the middle and on the right)
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4.0 Key Security Concerns of Uber

Security is an ongoing issue facing Uber. Users perceive that their personal information may be
transmitted to wrong hands and used for crimes or to harming them (Saairen, 2017). Even
though the increased data requirement in the app provides a broader way of showing what can be
done through the Uber app, this also increases the risk of sharing private data with unknown and
unintended parties. For instance, if the information of corporate customers like real-time
locations and their names are shared with third-parties, these details can be part of social
engineering attacks, watering hole, or spear phishing (Business Insider, 2017). Also, Appthority
realized that Uber had granted access to the information it gathers through the mobile app to 633
apps.

However, a large number of these apps access more information than they are supposed to
access. Therefore, this kind of access granting increases the chances of sensitive information to
be shared with a dangerous group of third-parties. For instance, if sensitive business information,
SRATEGIC PERSPECTIVES OF ONLINE BUSINESSS

especially a piece of competitive information like acquisition activity and a potential merger, is
leaked, a company's share price can be affected. A good example is when travel information to
cancer treatment of a senior executive is leaked, the share price of that company can be affected
(Saarinen, 2017). Therefore, Ubers’ company key security measures to be adopted is designing a
risk-free app for both App iOS and Google Android and ensuring that the information collected
by this mobile app is transferred securely. So far Uber has taken several security measures such
as, allowing the riders and drivers to record the trips data, ringing automatic alerts when a trip
goes far from the designated route or destination and texting to 911 for emergencies (Siddiqui,
2019; O’Brien, 2019).

5.0 Recommendations
While the Uber app wants to expand its ability to do things, the Uber community must consider
the application of all the required measures of ensuring that the data gathered through the mobile
app is securely shared to authorized recipients and well preserved (Business Insider, 2017). This
is because if this extremely sensitive information lands on unauthorized individuals, harm can
come to the respective companies. Also, some of the data gathered by the Uber app is not
protected by the Ubers’ privacy policy. This uncovered accessible information like Camera and
Calender is an incomplete privacy policy that may result in legal disputes and, therefore, not best
for security purposes. Hence, the Uber company should ensure that there is a complete privacy
policy covering all the accessible information by the Uber app (Saarinen, 2017).

Moreover, the decision made by Uber company to work closely together with other apps,
contributes to the higher risks rates of exposure and data leakage of key corporate information.
For this reason, companies should be informed of the risks related to the usage of the Uber app
and limit their usage in their corporate environments. Also, Uber itself should prioritize making
the Uber app more secure by removing or improving the most-risky features in the Uber app. For
instance, Uber company should remove some questions in the Uber app that collect more
information from its users. Reducing information collected by the Uber app is one of the great
ways to reduce risks associated with data leakage and the sharing of sensitive information to
unauthorized persons (Saarinen, 2017).
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Therefore, the only way to improve the use of Uber app and to reduce the risks associated with
its use is by taking close attention to the analyzed recommendations on how to take measures
that will mitigate these risks and ensure safe usage of Uber app even to the corporate customers.
However, the Uber app advantages remain to be more than its disadvantages. However, this does
not give Uber the comfort not to rectify the risk related features in the Uber app.

6.0 Conclusion
Uber is the world’s one of the fastest growing e-business company, being the top among the ride-
sharing and e-hailing service providers. The company’s pioneering presence in hundreds of cities
worldwide has given itself the competitive advantage of offering fast, secured and comfortable
transport medium, over other modes and competitors of the sharing economy, to the riders.
Uber’s business models incorporate a number of parties that are managed through efficient use of
its resources, drivers, customers and other relevant partners. Uber particularly focuses on each
segment of its drivers and customers to provide customized discounts and facilities. Though the
company has already taken some security measures to overcome the ongoing security issues, it
has been recommended to develop risk-free apps that will restrict transfer of personal data of the
users.

7.0 References
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