UBER: Changing the Way the World Moves Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

UBER: Changing the Way the World Moves Case Solution

Question # 04

The crux of the debate is on whether or not Uber's business model is sustainable and whether or not it will be able to retain the loyalty of its current customers while attracting the new customers in the future. A quick look into the company's financials, reveals that the company is already facing numerous financial challenges. Although the company has raised more than $3 billion from investors over the past couple of years, but it is still saddled with a staggering debt load and a rapidly declining stock price. To help the company in avoiding the financial ruin;its board has suggested a number of measures aimed at both maintaining profitability as well as building a strong customer base.

One key factor that has been neglected due to the company's focus on profitability is the company's focus on capturing as many customers as possible. One of the major concerns that the company has faced is whether or not it can capture the loyalty of new drivers and could retain the loyalty of existing drivers or not. While some analysts have argued that the company's major emphasis on capturing as many customers as possible, may push the drivers away.In an effort to compete with ride sharing services, other analysts believe that the company should be working on building a strong and loyal customer base.

After digging deeper into the financial statements for the company;we have observed that this concern about driver’s loyalty is largely misplaced. Instead, it is apparent that the company's focus is on attracting the new customers. As such, it is likely that if the company wants to retain the loyalty of its existing customers; it will have to take steps to ensure that it has adequate resources available to handle the growth in its services’ demands. One of the ways through which the company has been able to have growth, is by introducing a variety of different offerings to appeal to various types of consumers.

A competitive edge that Uber has been able to grab over its competitors in the ride-share industry is its ability to provide affordable pricing. In addition to using an aggressive marketing strategies to attract the new customers; the company also makes itself available to its existing customers via variety of discounts and promotions. With a large and stable customer base; the company can easily afford to offer discounts to its existing drivers and offer incentives to the drivers who choose to remain its customers. Drivers who use their services on a regular basis are given incentives, such as: promotions and discounts, while drivers who only use the service on occasion receive a discount on the total amount a customer pays for a single trip.

Before Uber got introduced in the market, it was very difficult for a traveler to find a cab and the waiting time of just having a cab, was much higher and frustrating. Every time when someone had to get cab, he would have to go to a busy street to find a cab, with all his luggage. There wasn’t any alternative available prior to Uber, and the payment could only be done through cash for the cab services. Uber got fame quickly because it solved all the issues that people were facing before its initiation. And the business model of Uber is also well maintained that attracted everyone towards it. Uber has an incredible light-weight infrastructure. It does not own any vehicle, and hires employees not the drivers, and it also does not pay the cost of maintenance. And there is a peer to peer discussion between passengers and drivers. It uses sophisticated software and has a strong reputation system. These factors make Uber successful in the current age.

Question # 05

There are many risks and misfits of high valuation for Uber. High valuation causes stock to increase in value, making it a very important factor to be considered.The biggest benefit of high valuation is that the price of the shares will probably keep increasing over time, causing the value of the company to keep rising, which can help Uber in generating more revenues.However, it increases Uber’s financial risk, as the firm is more exposed to the fluctuations in the future earnings’ forecasts. On the other hand, a low value can be used as a great way to generate extra income. In some cases, high value can actually make your business a successful one.

Uber is not paying high wages to its employees, and if someone is just doing the job there so it becomes very difficult for him to survive by being dependent on just Uber. Uber’s job is good if you do it in your part-time. Uber doesn’t fulfill all of your necessities, because of which you will have the requirement of having another full time job, in order to keep yourself financially independent and stable. Low salary is the main complaint of its employs, also on the other hand if you do it as a part-time job, then it is the best way to earn a little extra money in your free time. Because, if someone wants to go from pickup point (A) to drop off point (B). So this is the best way to drive a car on Uber and make some profit by it. Without it, you’re on zero profit so by driving picking the customers and dropping them off if their destination lies in the same route you were headed to, would be helpful in gaining some extra amount that could fulfills your needs. This is the best flexible part-time job, because of which most of the Uber’s employees are students & professionals, who are doing the full-time job at another organization as well. If someone wants to be employed for Uber on full time basis then he has to drive a regular taxi and limo service, which could be beneficial for him........................

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UBER: Changing the Way the World Moves Harvard Case Solution & Analysis