UBER: Radically Reshaping Urban Transportation Channels

In just seven years, Uber has revolutionized the urban transportation industry. Once the domain solely of taxicabs, car services, and public transportation, such as trains and buses, Uber allows passengers to call for a ride, choose the driver and type of car, know the fare in advance, and track the vehicle as it approaches. Uber now books more than $10 billion in rides, and operates in hundreds of cities in 67 countries. In addition to traditional competitors, Uber's success has attracted numerous other ride-hailing services, but Uber is taking full advantage of its first-to-market leadership position. Traditional transportation services are known for the close relationship between cab companies and local governments, high fares, poor service, and little accountability. Uber's model is changing the industry, and it will never be the same.

(a) Describe the key elements behind Uber's innovative channel distribution strategy (10 marks)

(b) Despite its recent successes, what threats does Uber face in the future? (10 marks)