Uber Case Study

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Leadership shortcoming. Uber CEO & Founder Travis Kalanick was forced to resign on Tuesday this week after a series of scandals of the company. According to The Wall Street Journal, Kalanick’s exit followed the removal or resignation in recent months of more than a half-dozen of his direct reports and a number of other managers, including heads of finance, operations, business, marketing and communications. A committee of 14 executives now runs Uber—an unwieldy structure for a company that centralized power and encouraged a confrontational management approach called “toe-stepping”.

Uber’s Opportunities

Uber can keep exploring global market. In some countries like India, taxi services are inconvenient and expensive. Uber can develop business in there to make profits in international market.

Uber can provide additional services. Uber can explore new opportunities in medical practice, education and other domains. For example, Uber can cooperate with hospital or insurance company to transport patients to hospital or clinics. Uber can cooperate with schools to offer transportation for students. Currently, Uber has UberEATS app to provide food delivery and Uber Freight to provide shipping service.

Uber’s Threats

Lack of leadership. After the resignation of Kalanick, the company is urgent to search new CEO. But media are questioning if Uber can find a leader who can lead a company whose defiantly competitive startup culture and leadership style reflected the pugnacious chief executive.

After the stepping down of Kalanick, Uber’s employees start to lose faith in the company. Some employees feel uncertain about the company and this make them feel hard to work, especially when they see their co-workers pack up their desks. Some employees are considering to leave the company because they are worried if the company will struggle to raise new funds.

Uber might have difficulties to find new employees. After resignation of lots of employees, Uber has started to find new team members. When Uber was in its heyday, it was the dreaming company for engineers in Silicon Valley. And Uber’s employees were considered almost unpoachable because of hefty equity stakes and Uber’s fast growth. However, when more workers prefer to work for a more ethical company, it might not be easy to find new talent to join Uber.

Uber is also in the threat of losing its drivers. First, Uber’s drivers are unhappy about the low-profit margins. Second, a series of scandals also make drivers lose faith in the company, they might quit Uber to join its competitor—Lyft, which has better reputation. And it can also discourage new drivers to join Uber.

Risks in global market. Some foreign countries have different legal regulations and requirements on transportation and drivers, which Uber might not meet that requirements. And there can be an existing competitor in the foreign market that Uber needs to fight to get the market share. For example, Uber entered the Chinese market in 2014. However, Uber’s positioning was not fitted with majority of passengers in China, it only attracted small amounts of passengers with higher social status and salaries. Different from the U.S., taxi in China is cheap and at that time, Didi Chuxing, Uber’s competitor in China, had already entered the market for 2 years with large amounts of customers. In additional, Uber’s self-driving business didn’t meet the government’s requirement, it made Uber get into a grey area of Chinese law. In 2015， a scandal about Uber’s interns were not treated well in the company exploded in Chinese social media. According to a Chinese report, the bad treatment of interns led to lose them, who Uber mostly relied on to run its business in China. And most of them joined Uber’s competitor, Didi Chuxing. Unfamiliar of foreign legal regulation and market as well as the lack of business localization led to Uber’s billions of losses in revenue. Last year, Uber quit the Chinese market. There is still potential risk that Uber might not have long-term development in other foreign markets.

More competitors in the market. When Uber is under attacked by lots of scandals, Lyft takes the chances to develop its business and increase its market share. According to Figure A, though Lyft has a smaller market share than Uber, its market share is increasing. Since Uber is still under influence of scandals and might be negatively effected for a long time as well as it’s still a question that if Uber can find a good leader to rebuild the company culture and bring further development to the company, it is possible that Lyft might get more market share than Uber. On the other hand, Google’s self-driving car Waymo has started its early driver project in Phoenix, which can also become competitor and might decrease the need for Uber in the future.

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Investor’s blame and accusations of technology theft. According to Business Insider, in an open letter to Uber’s investors and board, Uber investors, Freada and Mitch Kapor, blamed Uber has ignored the behind-the-scenes work that some of its investors have tried to do for years to change the company culture. And in February, Waymo, Google’s self-driving car company, filed a lawsuit to accuse Uber of stealing its technology to improve its own autonomous car development. Google is also one of Uber investors. The attack from investors might lead to more difficulties for Uber to raise new fund in the future.

Uber’s marketing strategies

Uber uses TV commercials to target at mass consumers.

To attract more passengers, Uber emails promotions to its passengers such as a free ride after a passenger refer Uber to a friend, or a discount on a ride. This not only attracts current customers to take rides, it also become a word-of-mouth marketing strategy which can build good impression for new Uber customers.

Uber has partnerships to attract customers to take a ride. According to a report, certain Capital One credit card holders can get discounted rides, Starwood Hotels Preferred Guest members can earn hotel points for every Uber trip they take, and Spotify users can link their profile to their Uber account to play their music while they ride.

Uber also provides other services to expand its business. For example, UberEATS provides food delivery and Uber Freight provides shipping service.

Suggestions for Uber

The most emergent thing for Uber now is to find the right person for the