Operations Management at Uber

Introduction:
Uber is a privately held company that was founded back in the year 2009, that is exactly 8 years before from present time and the company is headquartered in San Francisco which is in California located in US (Uber.com, 2018). There are more than 633 cities around the world that are served by the company and the main services that it provides to the customers are transportation services as well as the food delivery services. There are more than 12000 employees that work under the company and as of 2016 last quarter; there total revenue amounted to US$ 6.5 billion. There are different prices at which the customers of the company can take a ride in Uber and there are four kind of pricing strategies that have been adopted by Uber which goes in the name of pool rides, that is the lowest pricing when an individual hires a cab and the person who hires this ride has to share his cab with another 2-3 persons. The second one is premium rides which are the highest in the category while the economy pricing is not much high and also not as low as pool rides (Ahluwalia, 2017). There is another pricing strategy that is followed by Uber and that is accessibility ride which is for the disabled people and they can communicate with the driver using sign languages.

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There are a variety of departments at Uber which helps the
organization to reach its objective and fulfill the expectations of the
customers. The customers always looks forward to get the lowest price in the
market for the rides they take and with the help of following a variety of
approaches, the operations department of the organization helps in achievement
of the objective and tries to provide the lowest price to the customers. The
operations department always strives to reduce the price of rides with the help
of reducing the cost of the organization and me being an employee of the
operations department, it is also my duty to contribute towards making the
organization operate in a price effective way. Uber is one of the fastest
growing companies in the world and it is the aim of the operations department
of Uber to contribute towards the rapid growth of the organization with the
help of the operational activities (Dudley et al., 2017). The logistics and the
operations roles of Uber are interconnected and the most significant task that
is performed by the operations department is ensuring the supply in the market
for their service is constant so that the satisfaction of the customers can be
gained and the most important function that is to be performed by the
operations department is analytics which will help them to use the data about
the drivers in order to understand the driver behaviors with the passengers and
design strategy how the communication between the driver and the passengers can
be improved. Moreover, the operations department also designs the incentive
plans for the drivers and also develop as well as optimizes the process. There
are several other functions that the operations managers of the company perform
which will unfold itself with the progress of the assignment. 
Main Body:
Transportation is one of the oldest industries in the world
and there are many changes that took place in this industry with the coming up
of the technology (Centobelli et al., 2017). Due to the globalization of the
businesses all around the world, the technology of the companies have developed
and that have increased the demand among the customers. The transportation
industry has viewed many ups and downs and Uber is nothing but just a company
born out of technological development of the globalization.
Uber’s business model:
The business model of Uber is very simple and the passengers
can simply request to hire a cab based of their choice by selecting the
location of the place they are in and additionally, they can also select the
type of cab that they are looking forward to hire (Cannon et al., 2014). There
is also sharing of cab facility that has been kept available by Uber and this
helps the customers to reduce the price of the booking as other passengers who
will be going on in the same route also travels with the same cab. The drivers
those who do not have booking are matched with the help of the system and then
the drivers are then sent request to pick up the passengers with the help of
the system but before that it is mandatory for the drivers also to accept the
request. There is also satisfaction provided on the part of the customers with
the help showing the customers the real time position of the drivers who are
coming to pick them up. Moreover, the drivers also receive direction with the
help of Google navigation the real location of the customers who are waiting
for to get picked up. When the driver reaches the place of booking of the
customers, the customers are sent notifications with the help of app and also
messages that the diver has reached the location and thus the customer hires
the cab and after the journey is completed the fare of the ride is calculated
with the help of the app based on real time travel and the user is charged to
pay money either through credit card, debit card or through cash in some
countries (Bashir et al., 2016). Moreover, the customers are also able to
review about the drivers whether their ride was great or they have suffered
inappropriate behaviors from the drivers. This helps the operations team of the
drivers to take actions against the drivers and do analytics of the driver
behavior.
The demand of the customers:
The main demand of the customers of the company is providing
them with the lowest price for the purpose of travelling from one place to
other. Due to the increasing of rate of inflation in many countries across the
world and the value of many currencies going down with the developing countries
being more developed, the demand of the customers is to lower the fare for the
rides they take with the company and thus in order to meet the customer demand,
Uber focuses upon lowering the price of the rides (Rogers, 2015). Additionally,
there are countries like India, Pakistan, and Nigeria, where the rate of
unemployment is more and thus in order to serve those customers, lowering the
price of the cab fare is mandatory as the customers’ demands more discount on
their rides. There are also a variety of types of customers who always look for
discount on their rides and some customers who prefers to travel alone. There
are also some customers who look forward to travel in a luxurious manner and
also use Wi-Fi facility during the journey. Thus there are four ways of
travelling that has been introduced by Uber for the purpose of travel. There is
Uber Pool service introduced for the people who like to travel in cab at the
lowest fare and people travelling in the same route are made to share their
rides with those passengers (Geradin, 2015). There is also economic pricing
that has been introduced by the company which allows the travelers to travel
alone or with their family but there are no benefits of Wi-Fi or spacious cars
offered to the customers like in case of premium bookings.
Thus in order to meet the demand of the lowest fares of the
customers, the operations team of Uber focuses upon lowering the cost of the
operations of the organization with the help of lowering the driver fares per
trip. At the time of the launch when there were very less drivers who adopted
the Uber model and for satisfying the customer demand, more of Uber drivers or
the owner of the cars were paid with higher fares, but nowadays, the scenario
has changed and Uber has become a huge company with huge number of cars working
under them and thus in order to provide more discounts to the customers and
charge them less, they have made a price cut upon the salary provided to the
drivers or the money provided per trip to the owners of the cars (Bernhardt,
2016).
Operations Objectives:
Thus the demand of the customers of Uber is met with the
help of a few objectives of operations as mentioned below:
Firstly, the quality of the design and the quality of the
services is focused upon by Uber and improved by them so that they are able to
ensure more customers attracted towards the company.
Secondly, they also focus upon improvement of the
flexibility of their operations which can help to improve the operations of the
company by being flexible with the changing demand in the market (Wirtz et al.,
2016).
Thirdly, customization of the services in some countries according
to the demands of the customers also helps them to satisfy the demands of the customers
in the market.
Fourthly, Uber also focuses upon the customers who are
dependable upon them and increases the dependability of the services with the
help of providing them with options to rate their trip and thus if the reviews
are low and comments are negative, they focuses upon increasing those areas and
improve the dependability of the customers.
Lastly, reduction of the cost or expenditure of the company can
also help Uber to satisfy the demands of the customers by providing them with
lower prices and also provide them with discounts.
Meeting the Operations Objectives:
There are a few ways that can be implemented which helps in
meeting the objectives of the operations of the company. Some ways of meeting
the operations objectives of the company are mentioned below:
Meeting quality of design:
There are some customers who demand luxurious services form
the part of the company as well and in order to meet the demand of those
customers, there are high models of cars used for the services (Caranza et al.,
2016). For instance, Uber uses BMW, Audi, and Mercedes-Benz for the luxurious
segment customers. The drivers that are also offered to the customers are
private drivers and the inputs that Uber makes upon the services is of very
high quality.
Meeting quality of services:
The quality of the service that is provided by Uber is
another objective of the operations team and the design of Uber promises to
provide reliable services to the customers. The demand of the customers is to
get reliable services from the part of the organization and in order to
increase the service reliability, Uber helps to view the customers with the
real time location of the drivers and also texts the number of the drivers to
the customer mobile numbers so that the customers can call the drivers and know
the exact location of the drivers and communicate with the drivers regarding
the trip (Wallsten, 2015).
Improving flexibility of operations:
As the number of population is continuously increasing in
the world, the numbers of customers that are demanding the services of Uber are
also increasing in many countries where the company serves. Thus, there is
requirement for Uber to become flexible in the market and cater their service
more in the countries of their operations. As Uber hires professional and
licensed drivers, they are able to meet the customers’ demands with the help of
that and also with the help of improvement made in the level of technology,
Uber is able to focus more upon the changes that are taking place in the
marketplace and technological developments are also helping them to increase
their flexibility as well as their capacity in the marketplace.
Improving service customization:
There are also customers who look forward to customize their services and Uber being a technologically developed company, focuses upon the customization of the services. In some countries there are customization of the services under the brand names like Uber Taxi, UberX and Uber black which focuses more upon meeting the demands of the customers (Miller et al., 2017).
Improvement of customer dependability as well as accountability:
The customers also want the dependability of the services
that is provided by Uber and for that reason, the customers are told to rate
the services of the drivers and thus the dependability of the services is
improved.
Accountability is another aspect of the service that is
provided by Uber and in order to improve the experience of the drivers and
passengers, the real time feedback has been implemented and this helps the
company to respond quickly if there are any problems or issues that are being
faced by the passengers as well as the customers (Moon, 2015).
Cost or expenditure reduction by Uber:
The organization also focuses upon reduction of the cost
with the help of implementation of minimum regulation to become a driver with
Uber. As the regulations that is implemented by the company is of minimum
amount, any person who is above the age of 21 years can become a driver and
also any person having the driving license can driver for the company. Also
having a car with four doors is enough to drive with Uber and the person should
have a minimum amount of personal insurance to become a driver. But it is
mandatory that the person should not have any criminal background and the
record of accidents should be clear. Thus, the minimizations of the cost of
Uber are supported by the company with the help of employing the drivers with
minimum requirements (Gabel, 2016).
Hindrances in achievement of operations objectives:
There can be hindrances that can be faced by Uber in meeting
the above mentioned objectives due to some of the external and internal factors
of the organization (Schneider, 2015). The external and the internal
environment of Uber are full of threats and these threats can hinder Uber to
meet the objectives of the company. Some threats that can cause hindrances are
mentioned below:
Firstly, the prices in some of the economies where Uber
operates are rising and this can cause the petrol prices to rise and thus the
drivers and the car owners who are provided with low return per trip with Uber
will not be able to work with the company which can cause Uber falling short to
meet the demands of the customers.
Secondly, there are complaints faced by Uber that drivers force
up the surge pricing of the rides and this causes the customers to pay more which
is a negative side of the business and if this continues, Uber will soon lose
their markets.
Thirdly, there are rivals of Uber in some countries and
those organizations sometimes in order to increase competition with Uber offer
much lower prices to the customers in the form of promotion, which shifts the demand
of the customers form Uber towards other companies which provides similar
service in much lower price (Ng, 2016).
Fourthly, there are sometimes very rude behavior complaints
that are faced by Uber against the drivers of a few trips. The customer
launches complaints and posts those in social networking sites which are viewed
by other followers of their page and thus they lose the market as the customers
do not get enough confidence to ride again with them.
Lastly, model of Uber is easy for other rivals to copy and
thus in the countries where Uber is not present and is thinking of entering the
market, the model of the company can be copied by other organization which can
make the company suffer in their expansion plans.
Conclusion and Recommendations:
Thus, from the discussion above, it can be stated that
though the operations department of Uber tries to provide better services to
the customers with the help of improvement of the company operations, there are
still some threats that the company is required to fight against so that they
are able to satisfy the customers of the organization (Colangelo et al., 2017).
The customer satisfaction is the main motive of any kind of business that
exists in the real world and Uber is also not an exception. Thus in order to
satisfy the customers of the organization, they are required to overcome the
organization threats with the help of improving their efficiency of the
services that they provide to the customers. Sometimes when the customers
provide negative reviews about the drivers, Uber is reluctant about it and this
causes the drivers to do the same mistake over again. So, Uber should take
strict actions against the drivers who have been provided with negative reviews
and should leave them with warning for the first and time and if the driver
again receives same kind of review for same mistake, Uber should not be
hesitant to fire that driver. Additionally, Uber should also work against the
drivers who are forcing up surge pricing and should work accordingly to reduce
this. The Uber drivers keep their apps off for a long period of time; making
the customer and the company believe that they are not available for duty and
thus they force up the surge pricing (The Telegraph, 2018). So, company should
implement tracking devices in the cars and make sure where the drivers are
located so that they can reduce surge pricing that is forced up by the Uber
drivers. Moreover, there are various competitors of Uber in some of the
countries and those competitors eats up the market share of the company by
following the model that have been implemented by Uber as it is very easy to
copy. So, in order to reduce this, Uber should follow a more complex model so
that they are able to reduce their model being copied by other rivals and eat
up their market share in return. Also, as there are some economies where the
fuel prices are rising high and it is causing the company to increase the pay
of the drivers and per trip, Uber can make it mandatory for their clients to
drive electric operated cars and this will help them to reduce the cost of the
business as well as at the same time meet the demands of customer by providing
them with low fares (Nistal et al., 2016). Thus, implementation of the above
mentioned strategies can help Uber to be successful in the marketplace and also
help them to meet the demand of the customers.
References:
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