Uber Technologies, Inc., originally known as UberCabs, was founded in 2009 by tech start-up veterans Travis Kalanick and Garrett Camp and headquartered in San Francisco. Both the partners had different roles within the company. Camp, a serial entrepreneur was a silent partner and Kalanick was the voice and face of Uber in public. Initially Uber was providing luxury car services to top executives of Silicon Valley. Kalanick had recognized the potential in idling taxis and empty limousine seats and marketing strategy.
At that time anyone in need of a taxi had to first email Kalanick for a code using which the person could access the app. Within 1 year, by 2010, Kalanick was convinced that this aggregator model of bringing drivers and riders close to each other using technology could be scaled globally and thus Kalanick executed an aggressive growth strategy.
Today, Uber is present in more than 10,000 cities globally with a valuation of $120 billion, and more than a million people using its ride-sharing app every day.
Expansion Strategy of Uber
The ride to expansion for Uber was a tortuous one. Uber faced a backlash from the existing taxi unions and even government regulatory authorities in almost every region, it tried to enter. Paris was the first city outside the United States that Uber expanded to. The company operated on an asset-light model approach where the cars were owned and maintained by drivers and they paid a commission to Uber for every ride.
Uber executed a consistent strategy whenever it was the time to penetrate a market. Approximately 45 days before the launch date, Uber would send an advanced team of senior executives to recruit drivers. Another team handled the task of community management, which facilitated creating a local strategy to spread the information and also hosted local influencers to create buzz.
With the vision to Uberise the world, Uber was not just focusing on transporting humans but also delivering food (UberEats), flowers, freight (Uber Freight), and even Christmas Trees. In a nutshell, Uber aspire to grow as a logistics management organization that can serve any logistical need.
Uber is one of the few companies that claim that people supported its expansion. Every time there used to be a deadlock between authorities and Uber, Kalanick used to tweet about the same and people would support them because the value proposition they proposed was exceptional.
Value Proposition for customers
The value perceived by customers was the biggest factor that helped the company sail through difficult times. Few value propositions can be listed as-
- Hassle-free and convenient booking
- Lesser wait time
- Live tracking available
- Drivers cannot take undue advantage of customers new to the city due to which Uber was the most preferred option of travelling by tourists
- Drivers cannot cheat by taking longer routes
Also Read: MG Motors – A Brand Creating Unparalleled Motoring Experience Since 1924
Promotion and Branding
Uber has relied majorly on social media (Facebook, Twitter, YouTube, and its own website) for much of its promotional activity. Uber also partnered with Facebook Messenger to let people book rides in the messaging app itself. To better connect with its customers, Uber utilized one-day creative promotional events like on Valentine’s Day, Uber allowed users to order flowers via its app and labeled this service as “Romance on Demand”.
The company leveraged campaigns to connect with customers and promote the brand. Uber’s motto, “Everybody’s Private Driver” was widely promoted through its video campaigns. As the company began to diversify its service portfolio and provide services other than ride-sharing it also adjusted its motto to accommodate the same. By 2016, the motto of Uber was “Evolving the Way the World moves”.
The logo of the company has continuously evolved over time to reflect the change in not only the company motto but also the company’s offerings. Uber never outsourced the job of logo designing and Kalanick along with a team of 12 designed the logo.
Competitor Analysis
Uber has a wide range of competitors depending on the region/geographical location. But the omnipresent competitors of Uber are Local Taxis and public transport. Local Taxis offer stiff competition to Uber as they often negotiate prices with customers. Uber has developed algorithms that calculate and offer fares even lower than these Taxis offer. These algorithms are developed by a data science team of nuclear physicists, astrophysics PhDs, and computational biologists.
Public transport remains a cheaper option as compared to Uber but safety, convenience, and ready-to-go are the differentiating factors.
In the United States, the main competitor of Uber is Lyft. Lyft used a differential positioning strategy as the “anti-Uber” and offered peer-to-peer ride-sharing service. Initially, Lyft was not using the concept of dynamic pricing, the practice which brought a truckload of troubles for Uber. Though later Lyft also embraced the same concept and labelled it as “prime time”. In US Uber has a market share of more than 70%.
In India, the major competitor is the homegrown brand Ola. In India, Ola has a market share of 56% while Uber has a market share of 40%. Rest of the market is controlled by small players like Meru, Jugnoo, droom etc.
In China, Uber competes against Didi Chuxing. Here Uber is a marginal player with more than 90% of the market being controlled by Didi Chuxing. In 2017, Didi Chuxing had annual revenue of $11 billion.
Thus Uber is the only brand with a considerable presence across a multitude of regions. With its efforts in Asia not paying many dividends, there are a few markets that Uber can choose to penetrate. As part of its global expansion strategy, Uber plans to tap in the lucrative Brazilian market.
[wpforms id=”320″ title=”true”]
