Uber is a web-based transportation network which focuses on the transport, food delivery and cab services. Uber was founded in 2009 by Travis Kalanick and Garrett Camp and having it’s headquarter in San Francisco, California. The company is currently having it’s operations in 633 cities worldwide. The platforms by which the services of company can be accessed are via websites and mobile apps. The mobile app and Uber services were launched in November, 2011. The main business of Uber is cab service which links private taxi drivers to the taxi users. The rides of the company tend to be less expensive than other cab services. It was formerly known as UberCab Inc then later it changed to Uber Technologies in 2010.
The mission of the company is to provide transportation services. The Uber app allows passengers to contact drivers for a ride. The drivers accept the request and pick up the passengers from the booked location. There are two benefits of using Uber which are convenience and easiness by which one can use the app. The interface of the app is easy to navigate which makes convenient for the passengers to book a ride and to travel. (Uber, 2018). There are various options to book a ride at the through the mobile site or sending a message to the designated number provided by Uber for the particular city. The latter options can be used when there is no internet connectivity for using the app. The company makes it easy to obtain a ride and the payment method is also convenient. A person does not have a need to carry cash as payment can be made by Uber cash, PayPal, and some other emerging trends. This report includes the innovative strategies implemented by Uber. The role of innovation has been defined. Further, the critical evaluation of innovation strategies of Uber has been made. The complexity faced by Uber due to the complexity of creativity and innovation has been described in the existing business culture. Finally, the recommendations are given to explore opportunities through the application of innovative strategies.
The innovations play a huge role in the creation of products and services. The innovation strategies are plans made by Uber to encourage advancement in the technology. The investment in the research and development activities is essential part of innovation. It is helpful in gaining a competitive advantage. The innovative strategies add uniqueness to the development of products and services. Uber uses innovative strategies to increase the value of the current product and services. Uber constantly creates unique products and services with tremendous success (Hon & Lui, 2016). Uber eats and Uber transport network are innovative products of the company. The leadership has an important role in the innovation as the messages are communicated to the employees which significantly affect the success of the project.
Uber innovates on the aspects given below:
The marine shipping start-up of Uber has raised millions from investors. It has rationalized the complex overseas shipping process and shows the tracking information. The mission is to bring world free trade through technology. It is all about the innovation and creativity. Uber influences it’s various ecosystems which comprise customers, employees, associates, suppliers and global networks. The company regularly analyses the market and seek new opportunities to certify the exponential growth of the company (Yoshida, Sendjaya, Hirst & Cooper, 2014). The company is able to increase it’s revenue and net profits at a percentage that no other cab company is able to attain. Uber focuses on it’s innovative strategy through various aspects. The innovation strategies can be better understood by the innovation matrix of the company (Gilson & Litchfield, 2017).
An Innovation Matrix of Uber
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Culture HUMAN (Interdepartmental, HR) |
Research DISRUPTIVE (Policy, industry-driven) |
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Service CREATIVE (Experimental, idea creation) |
Market OPERATIONAL (Resource-driven) |
(Source: By Author)
The innovative matrix focuses on the four aspects such as human, disruptive, creative and operational to define creative strategies of the company.
Human: In the human aspect, Uber focuses on the recruitment of drivers and the technical staff. The human aspect has great role in the work culture of the company. Uber technologies have engaged 3000 employees. The company is valued at $50 billion and is present in 311 cities. Uber has a workforce of drivers more than 1, 60,000. The company does not hire drivers directly. The drivers are hired through it’s app as independent contractors. The innovative ways of managing the human resources of the company bring the positive results for the company (Zhou, 2015). The workforce of Uber is very flexible and it benefits both Uber and it’s drivers.
Disruptive: Uber is innovative but not a disruptive innovation. The company represents an only incremental improvement on the existing taxi industry. As per the report of 2015, Uber spent 94.7 million on the research and development (Statista, 2015). The company has launched a research hub in Toronto to focus on the development of self-driving cars. It is the first time that the company has settled outside the US to enhance it’s driving efforts. It has hired specialist professors to lead advance technologies in machine learning and computer vision. The computer technology helps cars to find the destination (Tan, Tan, Lu & Land, 2017).
Creative: The creative aspect is concerned with the services offered by the company. Uber is innovating new and creative features which will set a new customer. It is going to improve the app experience for the existing customers. The innovation strategies are the plan of the company to grow market share through product and service innovation (Stierand, Dörfler & MacBryde, 2014). These strategies indicate that product improvement or innovation approaches are best. The innovation strategies are not only about selecting activities different from competitors but it is all about creating winning products.
Uber has launched a light version of a company that is m.uber.com for the passengers who have basic smartphones. It supports web browsing but does not support mobile applications due to limited storage available or the persons who want to book a ride from tablet or computer (Erez, Van de Ven & Lee, 2015).
The Uber eats was launched by the company in 2014. It is an easy way to get food delivered. A person can choose 100 of restaurants from the app and can add the desired food to cart. A person can check out and add the address to get food delivered (Sun, Nanda & Jaeger, 2015). The app shows the estimated delivery time. The order can be tracked to know the estimated time of delivery.
Operational: Uber focuses on the various markets to use it’s resources. US, Australia, New Zealand and Latin America are core markets of Uber. These regions are profitable and have more than 50% market share. The company is continuously making investments in these geographies. The company is continued to retreat markets where the operations are not viable. India is the huge opportunity for Uber to utilize it’s resources and expand market share. India has the vast population and lacks public infrastructure. India is not bogged down by regulations like other countries (Zeschky, Winterhalter & Gassmann, 2014). In such a scenario, Uber can become potential in the near future.
The business competes successfully which make use of innovation to act upon opportunities and possibilities for change. Innovation has a great role in the development of an organization. It enables an organization to achieve a range of key business outcomes. The innovation also means exploiting new technology to generate new value and bring significant changes. It is tough to survive in the present scenario if the innovation strategies are not implemented by the organizations (Khalili, 2018). A company invests more in the innovative strategies to remain competitive in the market. It helps companies to survive in the long run. Here are some examples of the same industry which can be taken to understand why innovation is important. These companies could not survive due to a lack of innovation (Jarrar & Smith, 2014).
Hailo was a technology platform which used to match taxi drivers and passengers by a mobile app. It was established in London in 2011. The service was made available in 16 cities by Hailo. The company did good business in London and New York. Despite, gaining such attention, the company has failed in the U.S. market and forced to leave shortly due to innovation and other reasons. It lacked innovations in-app due to which it used to work in one location but not in another. The company considered that in some places it does not need a mobile app. It turned out as a major problem. Along with this, the company faced technical issues after taking entry into the new market. It was required to redesign the service in order to integrate with the taxi companies (Dunlap, Parente & Geleilate, 2017). The payment process of the company was also out-dated. The market and user research are important in the mobile app innovation and development. If the company have considered the above weakness and used innovative strategy then it might not face failure. All these were innovation issues which were faced by the company and lead to failure in some markets.
Ingogo is an Australian based company which is specialized in the online taxi bookings and payments. It was the first transportation company in Australia to provide passengers with fixed fares. The company had it’s own GPS enable booking system. A defiant campaign was launched by Ingogo which resulted in hassles of booking a taxi over the phone. The customers faced complexity during the call as the waiting period was too long and meanwhile, the features of using and downloading apps were used to discuss. The processing system of booking was too out-dated. The future booking on the phone was not able to function properly. The company was required to make some changes in the app and take some innovative steps to make efficient processing (Aldrich & Martinez, 2015). But the company failed to do so. An efficient processing system which adopts innovation brings success in terms of increasing number of customers.
The failure of companies explained above it can be learned that it is vital to uncover assumptions and create theories during the research process. The companies could have avoided some mistakes if these have done better research and innovations to gain understanding to remain competitive in the market (Squalli & Wilson, 2014).
The innovation strategy of Uber can be evaluated with captivating value propositions for passengers and drivers. It has driven exponential popularity. The figures evaluating a company by implementing an innovation strategy is reflected in the appendices 1. The components given below have created a value proposition for the company:
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Value proposition of Uber |
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Delivering jobs |
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Relieving pains |
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Creating gains |
These were the innovative strategies which compelled value propositions for the company. Uber has an accessible growth strategy which enabled to launch service in more than 400 cities in just seven years. The company faced the problem as a start-up but the innovative strategies helped the company to acquire drivers and customers. The company has some advantages which help it to tackle the emergent issues like the company have enough money to incentivize drivers and customers. The company also has an incredible image which gets curious attention. The company also has a rock solid roll-out strategy which constantly refines over time. Uber also makes use of creative strategies to deliver creative marketing such as delivering puppies for a cuddle, the opportunity to pitch business idea into a venture capitalist (Christensen, Raynor & McDonald, 2015). The innovative strategies centered around cautiously signing up drivers and aggressively discounted service to develop a large base of customers. The company has changed it’s approach to deal with regulators. It left behind the confrontation approach. Uber launched a pilot program that generated little publicity and as anew expansion strategy. The company partners with others instead of developing it’s own public transit infrastructure.
The SWOT analysis of Uber is described as:
Brand equity: Uber works on it’s business model- on demand service. The demand for the services is accumulated online and the accomplishment is done offline. The resources can be utilized and wastage can be avoided in this process of acquiring customers (Slåtten & Mehmetoglu, 2015).
Focus on customer satisfaction: The popularity of the company lies on the way to satisfy customers. The company provides features to attain maximum satisfactions such as scheduling ride, booking ride, fare estimates, navigation, customer rating, track earnings and more.
High dependence on manpower: The company depends mainly on the manpower. Lack of manpower can is a major weakness for Uber and the company is going to suffer. On the other hand, the company lets drivers earn more out of passengers is surely going to confuse passengers.
High dependency on the internet: Uber works on the real-time evaluation and internet. The company cannot make move in a country which is having poor internet connectivity. The app can only be managed on the smartphones, not on the basic phones (Caniëls & Rietzschel, 2015).
High investment rate: Uber is a big brand now. The company has a high valuation in the market. So, it requires a huge investment to settle in a country. Due to high valuation, customers are appealed and attracted towards company (Perry-Smith & Mannucci, 2017).
High growth rate: The company is not restricted to the geographical boundaries. It has operations in the major parts of the globe. The company has more chance to expand in the high-density regions where it is not established.
The high rate of competition: Uber operates in a large number of cities and has a high rate of competition with the local cab companies. The competitors team up against the companies like easy taxi, cabify and 99 in South and Central America.
Low margins: Uber enables drivers with a high number of rides but the company does not have to maintain a high margin for the drivers. It creates dissatisfaction among drivers (Richter, Jackson & Schildhauer, 2018).
|
Strength |
Weakness |
Opportunity |
Threat |
|
Brand equity |
Dependency on Manpower |
High investment rate |
Competition |
|
Customer satisfaction |
Dependency on Internet |
High growth rate |
Low margins |
The steeple analysis of Uber is defined below:
The passengers of Uber enjoy easy accessibility to the platform. It is easy to choose an appointment and pick up time. It is just a process of few buttons and obliges no communication. The cheap prices offered by the company have led to the growth of the company. The customers, who are satisfied with the ride, provide rating and comments on the social media sites.
People share their experience online and share stories. It also inspires new customers to do the same. Uber fulfills the need of buyers who are searching for the transportation options. The customers can take appointment through the app and the estimated fare appears on the app. The fare also depends on many factors like location, traffic, and weather (Cook, 2016).
The effect of the company on the environment is ever-shifting. There are sustainability concerns which have risen because of ridesharing and lift too. The company also has initiated a pilot project known as Uber Green in which the passengers can request a green ride by tapping a single button.
The company is affected by the economic factors. The company has created unique jobs which have resulted in generating employment for a large group of the population. Uber has reduced the cost also for searching cabs. Uber is leaving all the companies behind even in the intense competition. The cost to add drivers as employees are reflected in the appendices 2.
Uber operates in various companies so as a result, several governments have concern over the rule of sharing economy (Serrat, 2017). The company also have a disruptive effect on the traditional taxi business. The company faces licensing issues wherever it conducts activities.
The company has to pay fines whenever it is not able to comply with rules of countries. The growing business of Uber is also challenging for the legal authorities. The company faces a legal problem not only due to taxis but human resources as well.
The ethics are the principles that govern the conduct of the company. The factors involve the process and actions which influences the behavior of employees and drivers of Uber. In order to avoid ethical issues, the company is bound to follow the ethical factors.
The implementation of innovative strategies is not just about choosing from the menu. The successful implementation of innovations depends on the structure of an organization. The company creates a portfolio of products and services to remain competitive in the market. The company takes initiative which pushes it to the new horizons. The complexity faced in innovations is technology which is a day to day issue for the company. The innovations cost more to the Uber, as a result, it charges more from it’s customers. However, the passengers go for the cab service which charges reliable and affordable prices from them. The innovations demand drivers to be advanced in order to cope up with technology (Amabile & Pratt, 2016). So, the company enables training for the drivers to understand the enhanced technology. In such a scenario, Uber faces complexity to arrange training for drivers. It also demands extra time from both the company and drivers. There are no regulations to monitor surging pricing and the sharing service offered by the company. The ride-sharing app calls for the extra online plea. The innovations of Uber seemed to be reproduced to reinforce the manipulative structures of prevailing taxi services. Innovation is not a problem or complexity but it is required to be moderated with research (Sarooghi, Libaers & Burkemper, 2015).
The innovations strategy costs more to the company as it requires conducting and passing an English language exam to the drivers. The company is forced to set up locations in the UK for the customer support. Providing innovative service is at the expense of the company for the sake of customer safety and security. If the wrong license is given then it could pose a threat to the safety and security of the public. The innovation of a company, UberBlack is a flagship high-end tier which costs more than one and a half times more than a cab (Anderson, 2017). The company has to proactively isolate itself from other cab companies in order to justify it’s higher prices. Due to the innovations made by other companies, Uber has to proactively drop prices in order to attain a maximum number of customers.
The threat such as government regulations government regulations, low margins and revolution from the organized market can create more opportunities for Uber. The company operates in various countries and is required to follow the regulations of the particular company. The agreement between the company and the government generates more opportunities for the company to trade in that country. The regulations of government are all about the legal status and the way cab companies should be treated. The competition prevailing in the market gives confidence to the company to implement more creative and innovation strategies. Such strategies can help the company to retain customers and drivers for Uber. The competition also provides a monetary advantage to the company. The low margin charged by Uber assists to attain a number of passengers. It is because passengers like to take a ride at fewer prices (Ronningen & Lien, 2014). The low margin maintained by the company can be balanced by the heavy number of rides. More rides can automatically result in more margins for the company.
The unorganized market of cab drivers can be managed by the Uber by employing them for the particular regions. The company can freely choose drivers according to the suitability of the unorganized market. Such weaknesses provide a chance for the company to turn it into strength. The controversies faced by the company gives itself more chance to prove in the economy. The company can generate more innovations to lessen or overcome those challenges. The growth rate can be helpful to the company to operate in the major parts of various countries. It is recommended to the company to cover a large area. The company is constantly increasing it’s a number of operations in various countries. It can open new doors for the Uber to generate revenue (Saba, Saba & Azouri, 2016).
Conclusion
Uber is a leading cab company and the innovation has a great role in the development of comapny. Uber competes successfully by using innovation to act upon opportunities and possibilities for change. There are some issues which are identified by the company while implementing innovation strategies. The company faces the issue of creating a portfolio of products and services to remain competitive in the market. It has to update it’s portfolio on time to attain market share. The issues faced in innovations are due to technology which is a day to day complexity for the company. The innovations cost more to the company, as a result, it has to charge more from it’s passengers. The company has to provide training to the drivers whenever any innovation takes place. So, the drivers who are rigid to changes faces problem in adopting such techniques. The company has to provide discount coupons and promotional offers to establish it or remain competitive in the countries. Such issues impact the profits of the company. The thing that brings in the notice is such as the company not only have to offer such discounts one time but has to provide discounts to remain competitive in the market.
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