In 2015 an article in the Wall Street Journal declared: Theres an Uber for everything now. The article was referring to the profusion of on-demand services available to consumers. Since then the company continued to expand into new business areas. As of 2020, the company was engaged in ride-hailing, food delivery, freight, and micromobility, offering rides to users through dockless e-bikes and e-scooters. As CEO Dara Khosrowshahi said in an open letter published on Ubers website in April 2019, the company was still barely scratching the surface when it comes to huge industries like food and logistics, and how the future of urban mobility will reshape cities for the better.

Uber sets the world in motion through connecting individuals by way of its app-based platform, which is operational in over 63 countries and 700 cities globally. Uber, rooted in connectivity, operates through relationships with customers and drivers. Customers, or riders, utilize the Uber app to hail rides, request food delivery, freight ship items, and reserve personal mobility devices. Drivers utilize the app as independent contractors, using their own personal vehicles to taxi customers or deliver food on behalf of participating restaurants.

Uber Culture

In November 2017, just months after Dara Khosrowshahi became Ubers CEO after succeeding Uber founder and CEO Travis Kalanick, a document outlining his vision was released that explained Ubers culture. It explained: These norms preserve the best of the founding Uber culture that built one of the worlds most valuable and important companies, while recognizing that we must adapt to become a great company where every person feels respected and challenged, can contribute in his or her own way, and learn and grow as an individual and as a professional.

The New York Times described the new set of core values under Khosrowshahi as something of a repudiation of the culture created under (previous CEO) Kalanick, noting that the companys previously aggressive nature has led to business challenges serious enough to threaten the companys ability to operate in certain markets, including London.

Business and Strategies

Uber uses its technology platform for a variety of business purposes including ridesharing, food delivery, personal mobility, and freight services. Ubers largest business area is its Rides segment, which includes the revenue it earns from its ridesharing platform and through leasing of vehicles to third parties. The Rides segment accounted for over 75% of Ubers reported revenue in 2019. Ubers second largest business area is its Eats segment, which earns revenue through transactions on its UberEats platform via meal delivery services. The Eats segment accounted for roughly 18% of Ubers reported revenue in 2019. Collectively, Ubers other business areas, such as Freight, account for about 5% of the companys revenue.

Since Ubers inception in 2009, the company has drastically expanded beyond the simple concept of tap a button, get a ride. While its ridesharing services still account for the prominent portion of Ubers business, the company has aggressively invested in diverse industries where it believes it can leverage its technology to create value, including food delivery, logistics, and urban mobility. Moreover, the company expresses a strong desire to continue growing its core business, often citing that Uber accounts for less than one percent of all miles driven globally.

Drivers

In the period from January 2015 through March 2017, Uber reported 1,877,252 people who had driven through UberX or UberPOOL in 196 cities; many drivers work for more than one platform, including Ubers competitors, Lyft, DiDi and Ola. Many drivers were immigrants from developing countries who were willing to work extremely long hours for relatively low pay. An analysis in 2015 found that 51% of Uber drivers work one to 15 hours per week, 30% work 16 to 34 hours per week, while 12% work 35 to 49 hours per week, and 7% work 50 hours or more per week. This statistic does not account for hours worked through other platforms.

Uber does not directly supervise drivers, instead offering suggestions and recommendations through the app, leading with phrases like riders give the best ratings to drivers who Critics argue that the degree of indirect control that Uber exerts over drivers negates the firms assertion that drivers are independent contractors and entrepreneurs, in that they are expected to deliver a standardized experience to passengers or risk suspension, deactivation, or loss of pay.

Rider ratings serve as the primary means of drivers performance evaluation. Through the Uber app, riders rate their drivers after the completion of the ride. While this system supports efficiency through the semi-automated management of large, disaggregated workforces, researchers have questioned the implications of this approach.One concern is that the implicit biases that riders may have against some groups based on race, gender, age, or other factors may influence ratings, which could in turn influence employment decisions by management. A nine-month study identified information and power asymmetries as a result of the Uber app are fundamental to its ability to structure control over [Ubers] workers.Some drivers have speculated that Ubers algorithm rewards drivers implicitly for following behavioral promptsalthough the explicit dispatching rule is that passengers are matched with the nearest driver.

Despite the rating system for evaluation of the drivers performance, evidence of poor driving experiences has been reported. Some problems with drivers are more serious, including reports of physical assault, kidnapping, sexual assault and rape in at least seven countries including the United States, some of which involved drivers who were known felons who managed to pass Uber background checks. Generally, Uber has argued that it has no liability because drivers are independent contractors.

Operations

Ubers primary business are design, engineering, operations, and product. Its operations have been challenged by conflict with partners and regulators. For example, under former CEO, Kalanick, Uber actively attempted to deceive Apple about a component of its apps coding that would circumvent user privacy. Apple detected this deception and a series of tense conversations among the two companies leadership ensued before the issue was resolved.

Part of Ubers conflict with regulators and government agencies is that its business model does not fit with regulations that govern traditional taxi businesses. This has led to attempts on Ubers part to directly or indirectly influence such regulations. Reflecting on Ubers domestic lobbying efforts, Mike Isaac in his book titled Super Pumped: The Battle for Uber (2019), noted that these efforts involve nearly 400 paid lobbyists across forty-four states and observed that the number of ride-hailing lobbyists outnumbered the paid lobbying staffs of Amazon,

Microsoft and Walmart combined. Mike Isaac further revealed that in Philadelphia for instance, the firm faced a $12 million fine for 120,000 violations of transit code for operating illegally, a matter eventually settled for $3.5 million.

Internationally, Uber failed to legalize its uberPOP service in the Netherlands, which some researchers ascribe to the firms continued operations while concurrently lobbying for revised regulation.

Data Management

In order to provide its services, Uber collects a variety of data on drivers and riders, including user movement, drivers license and insurance information and riders contact and payment information. Internally, a mechanism for employees to track the movement of riders was called god view, but was later renamed heaven view. This data was necessary to the delivery of service, though one journalist expressed surprise over how loosely Uber restricted internal access to the tool. Uber also leveraged its data to track those who might threaten the firms operations in a particular locale through the use of Greyball. This feature was a snippet of code affixed to a users Uber accountthat identified that person as a threat to the company. It could be a police officer, a legislative aide, ora transportation official. If a user had their account flagged in this manner, they could only view a falsified version of the app populated with ghost cars.

Reward Platform

To drive customer loyaty as a result of millions of customers using Uber every day and in lots of ways whether theyre sharing an UberPool to the office, ordering in dinner from Uber Eats, biking home from the train, or taking an UberXL to the airport, Uber collaborated with a 3rd party company on the development of Uber Rewards, a loyalty program allowing customers to earn points and redeem benefits when using Uber. By understanding the most valued elements of the Uber proposition, the 3rd party company was able to work with Uber to devise a rewards program known as Uber Rewards that allowed Uber to invest in its customers, thereby driving increased customer loyalty. Points earned via Uber Rewards allow customers to gain status to one of four membership tiers, unlocking benefits along the way including price consistency, priority pick-ups at airports, higher rated drivers, and complimentary upgrades.

Competition

The ridesharing market is growing globally (expected to reach $300B worldwide by 2030) thanks to the spread of app-based transportation network services or ridesharing as alternatives to taxis, car ownership, and other traditional means of transportation. Ridesharing is growing especially fast in developing markets where mobile connectivity is widespread but individual car ownership is low. In general, users prefer the ease of use and low fares offered by transportation network companies over traditional cabs and public transit. These companies differentiate their service by maximizing car liquidity, or the quantity of drivers and their proximity to riders, to keep users engaged with their platforms.

Conclusion

Even as Uber grows, it struggles to reach profitability. Legal and regulatory challenges are as numerous and diverse as the locations in which the company operates and bear significant implications for Ubers financial outlook, especially regarding the employment status of drivers. Internal stakeholders face uncertainty as the company works to rehabilitate a troubled culture and address issues of diversity and inclusion. The broad environment is rife with direct competition and the threat of potential competition through technological advances.

1. What strategic business objectives do Ubers information systems address?

2. Describe the complementary social and managerial assets required by Uber to optimize returns from the huge investments made in information technology.
3. What are the key management and technology challenges relevant for Uber in the building and usage of its transportation-based app.?

4. How much of a competitive advantage is software providing for a transportation network services like Uber? Explain your answer.

5. How do operational customer relationship management systems help firms like Uber achieve customer intimacy? Explain your answer.