driving forward for uber south africa · eliminate cash handling without financial impact 80% of...
TRANSCRIPT
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Driving Forward for Uber South Africa
Signal ConsultingKate Boland | Nick Lane | Greg Piercey | Stephanie Daley
Memorial University
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Agenda
Main Challenge Kate Key IssuesObjectives Recommendation Analysis Nick Alternatives Greg Implementation Steph Risks and Mitigation KateQuestions
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Main Challenge
What business strategy should Uber adopt to address the South African market place?
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Key Issues
Passenger & Driver SafetyPayment
Perceptions affecting rider traffic SafetyUndercuttingNationalism
Aggressive Competition
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Objectives
Improve passenger and driver safety
Improve local perception of Uber
Increase ridership and profitability
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Recommendation
Adopt a tailor made strategy to address safety and local perception of Uber in South Africa
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Analysis
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South Africa
One of the most economically developed country in Africa
Economic conditions push people to public transitAlso provides entrepreneurial opportunities
High levels of crimeHigh levels of unemployment
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Target customer
An alternative to:Owning-transportationPublic transportation
Main target market for Uber:
1 Taxi passengers
2 Bus riders
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Uber market by income
Highest “taxi” and “bus” usage amongst lower income
However, 2/3 of “Quartile 4” are still in the target market
85.8% 83.5%77.3%
66.1%
34.1%
Quartile 1 Quartile 2 Quartile 3 Quartile 4 Quartile 5
Penetration of "taxi" and "bus" transit by income level
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Size of the market
Mode of transportation Total market size
Taxi 7.1M customers
Bus 2.5M customers
2% share
5% share
10% share
192,000 users 480,000 users 960,000 users
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What cold this be worth?
192,000 users 480,000 users 960,000 users
Revenue to Uber
Revenue to drivers
$1.1M $5.8M $11.5M
$20.7M $51.9M $103.7M
Low-end Moderate High-end
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Alternatives
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Alternative Strategies
Status Quo
Withdraw from South Africa
Modify strategy to address local challenges
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Why is “Status Quo” not an option?
Media attention is causing a negative perception and will affect ridership
Competitors are capitalizing on Uber’s challengesMarket has high potential
Status quo will limit ridership and ultimately affect revenue potential
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Why is “Withdrawing” not an option?
Large country populationHigh taxi usage in country (>50%)Johannesburg is first city in South Africa
The South African market is to big to ignore
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Recommendation
Adopt a tailor made strategy to address safety and local perception of Uber in South Africa
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Implementation
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Uber JoziIntroduces Prepaid Cards Leeker for YouLeeker for Local
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For Immediate Release: Uber to Eliminate Cash Payments
Uber is committed to providing South Africans with affordable and safe transportation, while providing new employment opportunities.
We consistently evaluate our business strategy and will no longer be accepting cash payment. We will however offer prepaid cards through corner stores to offer customers a convenient way to continue to Uber around Johannesburg.
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Implementation
Short Term (1 Month)•Announce no cash & use of cards
Medium Term (6 Months)•Launch cards & free card promotion•Local messaging
Long Term (12 Months) •Additional card promotion if required•Evaluate Uber in Cape Town
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Prepaid Cards
Similar to cards used for long distance calls $20 & $50 options Wide availability - Corner Stores Store receives 5%
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Free Card Promotion
$100,000 investment 5,000 cards Drive awareness of cards Trial of Uber
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Local Messaging
UBER JoziLeeker for You
Leeker for Local
$20
Your Driver:Trever Noah
Proudly From Cape Town
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Budget
Assumptions:5,000 cardsTeam of 5 to distribute cards
Card Promotion $100,000Card Distrbution $100,000App Update 10,000
TOTAL $210,000
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What does great look like?
Successfully launch pre-paid cards Eliminate cash handling without financial impact 80% of free cards utilized for trialRobbery attempts lowered
Improved local perceptionMarketing campaign successfully executedRidership increased to between 5% share of taxi and bus
marketRevenue to Uber of $5.8M
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Risks and Mitigations
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Risks and Mitigations
Risks
Regulation
Competition
Probability
Medium
Medium
Mitigation
Use Uber approach
Increase marketing
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Conclusion
•Prepaid cards•Eliminate cash handling
Improve passenger and driver safety
•Local messagingImprove local perception of
Uber
•Marketing campaign•Expand operations
Increase ridership and profitability
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Questions