UBER

1. What is UBER?

UBER is for someone who need to move from point A to point B

UBER is for someone who wants to have a side business, or a full-time business,

or a revenue generating hobby out of driving strangers around for cash

UBER connects those two needsin simple, fast, and predictable

way

2. Industry before UBER

[Personal Transportation Industry - TAXI]

License Fare

Taxi supply Regulations

Protective Costly No invest

Gov. Taxi Firm

Low customer satisfaction

3. How UBER works?

GPS

RIDE

80% of Fare

20% of Fare

• Easy to start(no license)

• Individual business(have full control)

• Earn more than taxi(simple cost structure)

[Incentive to join the network]

Dynamic Pricing Model

(stably balancing quantity of demand & supply)

• Easy to use(thru smartphone app)

• Reliable(arrival time & Fare)

• Cheaper than taxi(simple cost structure)

• Better quality(ratings & feedback)

Generalist Niche

ValueNetwork Effects

UBER X UBER Black

[UBER focuses on Generalist strategy in network effects industry]

4. UBER’s International Strategy

Global Multi Domestic

UBER services are available in 50+ countries and 300+ cities around the world

• Govt. regulations• Communication infrastructure• Cultural adaptation• Organizational structure

• The transferability and sustainability of the technology & information systems(Navigation system, apps, telematics)

• A very well positioned and easy-to-recognize brand

UBER

5. Challenges & Group Suggestions

Threat of new entrants

Threat of substitutes

Suppliers’ power Buyers’ power

Intensity of rivalry

BARRIERS TO ENTRY: MEDIUM-HIGHGovernment policyUBER’s strong brand identityUBER first mover advantage

RIVALRY DETERMINANTS:HIGHLarge number of firmsFast market growth(industry in apps segment)Similar cost structureLow switching costLow diversity within rivals

DETERMINANTS OF BUYER POWER: HIGHMany substitute availableSwitching cost is cheap

DETERMINANTS OF SUBSTITUTES THREAT : HIGHHigh buyer inclination to substitute(Strong public transportation system/taxi/car-sharing…)Price elasticity is high

[DRIVER] DETERMINANTS of SUPPLIER POWER: LOWMany competitive suppliersLow bargaining powerLow impact of input on cost[Others] DETERMINANTS of SUPPLIER POWER: MEDNavigation or Background check companies

[Porter’s five forces analysis]

[Three big challenges & Group suggestions]

Regulations1 Imitators2 New Technology3

Challenges

• Current law systems saysUBER is illegal in most cities(No licensed drivers)

• Total or partial prohibition of the services and advertising, fines, confiscations of cars and other penalties

• Basically anyone with a car and a driver’s license could be a competitor

• There are many companies operating in very similar ways as UBER(e.g. LYFT and Sidecar)

• New disruptive technology

• New business model

• Driverless cars

Suggestions

• Establishing better and earlier relationships with government

• Pushing drivers to obtain such permits by themselves

• “Too big to fail” strategy

• Reinforce safety system& Improve PR

• Lock-in strategy through Google synergy (e.g. maps)& UBER brand synergy

• Retain critical mass andachieve economy of scale

• Leverage big data

• Partnership with technologycompanies(Leverage Google)

• Invest R&D

UBER Chopper