Uber ability to expand service or re-invest
Uberis a cab like company where anyone with a car, license and insurance can applyto be an independent contractor and work on their own time. Consumers usethe service by downloading the Uber app and then simply requesting adriver in the area to come pick them up (Uber.com,2018). Uber has one main competitor called Lyftand general taxi services across the nation as their competition. Toremain competitive, Uber must formulate a strategy thatmakes their service more appealing than their competitors and continueslobbying efforts to curtail government regulation of their industry. Uber’sstrategic process involves “operating in ‘sharing economies’ of collaborativeconsumption (Botsman& Rogers, 2010), wherepeople offer and share underutilized resources in creative, new ways” (Cohenand Kietzmann, 2014, p.279).
Uber’sstrategic strategy involves extensive analysis of the elements in the externalenvironment. Macroenvironment is elements that couldimpact Uber’s revenue and growth (Parnell,2016). These elements or categories involve “political-legal, economic, social,and technological” (Parnell, 2016, p.43). Uber’swhole existence and expansion are about recruiting more drivers’ every day atlow cost and “differentiation elements like application program interface andflexible employment” (Hales and Mclarney, 2017, p.
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10). Since Uberdrivers own their cars, the company doesn’t have to pay for the driver’sgas, insurance or car maintenance; this is a substantial saving for thecompany and a big advantage over cab companies as they have extensive overheadto keep their cabs running. Cab companies get regulated by local andstate ordinances & laws, were Uber drivers only have to follow thedriving laws of the state they work. The force of political-legal factorssuch as politicians at the local, state and federal levels who want to protectconsumers safety and rights against abuse and harm is a tightrope the companyhas to walk. They want to appease everyone, so they don’t become tightlyregulated like cab companies as these costs an extensive amount of money forlicensing, training, fines, etc.
This tightrope would consist of astrategic strategy utilizing lobbyists to convince politicians not to regulate.Economic forces can impact Uber’sability to expand service or re-invest in the company for new technology,training, and equipment. In many ways, the economy will dictate theirstrategic strategy for investing and expansion. The passing of the Trump taxplan will certainly boost the company’s bottom line as they will now pay 21%for corporate take vs. 35%. The tax cuts would give the company extra revenueto make those investments to recruit more drivers and technology expansion.
Social forces like consumers wanting fast and cheapride-sharing can drive the company’s strategic strategy as their company’ssuccess counts on ridership and reputation. Uber’s”digital strategy is about leveraging your knowledge of each customer’spreferences and using digital tools to customize his experience” (GOLDENBERG,2016, pg.6). Their digital strategy involves the Uber appthat allows customers to hail a ride just by using their app. It alsoinvolves the collection of customer information and using it to improve serviceas they can use data like age or sex of riders for marketing and common pick-upand drop-off spots to better saturate an area with their service (GOLDENBERG,2016).
Uber’s strategic strategy ismulti-layered where one force of the macroenvironment could impact all therest. If the economy tanks, fuel prices rise or government regulationspassed, just one of these elements would hurt the company financially.