Sample Strategic Business Analysis of Uber

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Uber has emerged as leading company in the provision of new transportation options within the contemporary world. Uber's advancement certainly deserves attention and makes an ideal topic for this sample business paper.

General overview of Uber

Here is what Uber has to say about its own history:

On a snowy Paris evening in 2008, Travis Kalanick and Garrett Camp had trouble hailing a cab. So they came up with a simple idea—tap a button, get a ride. What started as an app to request premium black cars in a few metropolitan areas is now changing the logistic fabric of cities around the world. (paragraphs 1-2)

From its modest beginnings, Uber has evolved into a widely used ridesharing service. Moreover, as Uber has grown, it has sought to expand its services to anything involving delivery from one place to another—not just people, but also food and packages. More will be said about this in the respective section of the following essay. 

What is perhaps an important point to understand is that Uber is first and foremost a tech company. That is, the company Uber itself is primarily concerned with developing the smartphone software that can allow the kind of networking that enables its ridesharing service. The actual drivers for Uber are independent contractors who sign on with the company and use their own cars in order to do their work. Uber itself is not involved with the driving process.

However, Uber is the one who is responsible for linking up potential drivers with potential drivers, ensuring that the relevant security checks have been conducted, and allowing riders and passengers to provide each other with ratings in order to ensure the internal integrity and safety of the service. Uber, then, is primarily in the business of networking, and all of the company's emerging operations can be conceptualized in terms of simply providing a medium through which the relevant supply can meet up with the relevant demand (see Weinstein). 

Uber vs. Lyft

One of Uber's major rivals within the ridesharing company is a company called Lyft. Uber has historically been a much larger company, but it would seem that Lyft is rapidly making gains in this regard. As Wieczner has written:

Uber may have had a three-year head start in New York, but its smaller rival Lyft is catching up fast in the city that has become the epicenter of the ride-hailing apps' war for dominance. Last month, on-demand car service Lyft gave six times as many rides in its signature pink moustache-adorned vehicles in New York as it did in May of 2015. (paragraphs 1-2)

Uber might have to watch out for this insurgent threat from its rival over the coming times. However, part of Uber's strategy seems to have consisted of not just competing with rivals within the ridesharing industry, but also expanding services into other areas where it has no competition from other ridesharing companies per se. Again, more will be said about this below.

In any event, an interesting point that can be made here is that although Lyft is one of Uber's key rivals, from a certain perspective it can also be said that Uber and Lyft are also sometimes allies, especially when it comes to taxi companies. This is because ridesharing is a relatively new and highly contested industry, and a victory for one company within the industry thus almost necessarily translates into a victory for the other companies as well.

For example, Conway-Smith has indicated that Uber's expansions within Africa have produced considerable protests. If Uber is able to negotiate these tensions in an effective way, then this would mean that a company such as Lyft would also inherently benefit. Likewise, if Lyft campaigns for legislation against increased regulations for ridesharing companies, then Uber would benefit from this as well. So, while Uber and Lyft are rivals within the context of the ridesharing industry itself, they are de facto allies when it comes to the broader struggle of making ridesharing itself an acceptable industry within the context of the general economy. 

Uber's expanding portfolio

Uber began as a ridesharing company, but it has rapidly evolved into something more than that. A great example of this is surely the company's UberEats app. This is a food delivery service that connects restaurants with customers through Uber drivers; as such, it is in direct competition with companies such as Favor and GrubHub. This is a good example of how by diversifying its portfolio, Uber is entering into competitions that have nothing to do with the ridesharing business per se. On the ridesharing side, Uber is up against companies such as Lyft; but on the food delivery side, Uber is up against companies such as Favor; and Lyft and Favor currently have nothing whatsoever to do with each other. This means that Uber is becoming a highly versatile company that is struggling for dominance within the contexts of several independent markets. 

Moreover, Uber's investment in its food delivery service is indicative of a broader long-range plan that is being pursued by the company. As Hempel has written:

UberEATS is a significant move for a company that is worth a reported $62.5-billion, based on the promise that it's the future of the logistics business. One day, the logic goes, Uber will move anything anywhere. This app offers a window into what that future could look like. (paragraph 2)

Initially, it would seem like food delivery has nothing to do with ridesharing; but the common denominator between the two services would be the transportation of "objects" from one location to another. It is also worth noting that Uber already has a package delivery service active in a couple cities. Taking in the big picture, then, it is clear that Uber's strategy in diversifying its portfolio consists of nothing other than becoming the leading logistics—and not just ridesharing—company in the world. The company's ambitions have thus clearly evolved over time. 

SWOT analysis of Uber

A SWOT analysis consists of analyzing the internal strengths and weaknesses and the external opportunities and threats that face a given company as it moves into the future. One of Uber's key strengths clearly consists of the what could be called the versatility of the company. This has been indicated above in the analysis of Uber's expanding portfolio of services. By being active in a range of markets, Uber essentially insulates itself from crises that could affect one market or another, because then the company could either focus its efforts on another market or use resources from one of its other services in order to supplement the struggling service. A company such as Lyft or Favor, on the other hand, is relatively more vulnerable to fluctuations in the economy as a result of the fact that such a company offers services in only one specialized market. 

A weakness of Uber, though, may consist of the disjunction that exists between the company's corporate culture on the one hand, and the key demographics that are served by the company on the other. For example, Uber is primarily a tech company, and it would seem that the employees of Uber itself are thus enmeshed within tech culture, and all the biases or prejudices implied by that culture. Drivers contracted with Uber, on the other hand—as well as the clients of Uber—are highly diverse and likely have little to do with tech culture. Over time, this could potentially produce a clash of values and/or misunderstandings that could diminish the value proposition that Uber has to offer to its customers. This is a manageable threat, but only if the company becomes fully aware of it and takes the right actions within an appropriate and adequate timeframe. 

Turning to opportunity now, Uber's greatest one clearly consists of the fact that there is an enormous and loyal demand for the services provided by the company. Within the city of Austin, Texas, for example, there is a substantial campaign underway in support of a referendum that would enable Uber (and companies like it) to operate more freely within the city.

Uber doesn't always get a welcome reception

As McCann has indicated, the struggle over this referendum is heating up, with the battle lines being drawn more along generational lines than partisan lines: the younger generations seem to understand and trust services such as Uber, whereas the older generations tend to maintain a certain skepticism. In any event, many, many people have come to rely significantly on the transportation option provided by Uber. It would be a truism, for example, to state that Uber has contributed significantly to decreased drunk driving rates, since people now know that a safe ride back home is literally just the push of a button away. In essence, once Uber becomes a part of one's life, it gets difficult to imagine how one used to make transportation decisions before it became a part of one's life. 

Finally, one of the main threats confronting Uber consists of the entrenched order of transportation services, along with cultural biases that may prevent people from appreciating what Uber has to offer. Traditional taxi companies, for example, have been staunch and vehement opponents of the expansion of Uber—for obvious reasons. As Nikolewski has put it, for example:

"For cab companies and limo services, ridesharing startups such as Uber, Lyft, Sidecar are about as welcome as a blown tire on a crowded freeway" (paragraph 2).

To an extent, though, it could be suggested that these traditional companies are just being sore losers. If Uber has become more popular than those companies, then to a substantial extent, this is probably because those companies retained a monopoly on transportation and were providing an inadequate quality of service in the first place. In this context, the rise of Uber could be understood as a great example of why monopolies are bad and the free market is good. The threat of the entrenched order would thus seem to not be substantial, as Uber has shown a remarkable capacity to challenge and erode that order in a meaningful way.  

Conclusion

On the basis of the above strategic business analysis of Uber, the conclusion can clearly be reached that Uber is in a very strong position at the present time. Not only has it emerged as the leading ridesharing company at the present time, it is also diversifying its portfolio and is thereby well on its way to becoming the leading logistics company within the contemporary world. The company has a great deal of internal strength and external opportunity; and the company seems more than able to handle the external threats that face it. The one major area of improvement may consist of the internal weakness regarding corporate culture. Uber should ensure that its own tech culture does not eventually come into conflict with the values and expectations of the clients and customers of the company. 

Works Cited

Conway-Smith, Erin. "As Uber Expands in Africa, Protests Mount." USA Today. 28 Mar. 2016. Web. 29 Apr. 2016. 

Hempel, Jessi. "The UberEats Standalone App Has Nothing to Do with Rides." Wired. 29 Apr. 2016. Web. 29 Apr. 2016. 

McCann, Mac. "Prop. 1 Campaign Switches into Higher Gear." Austin Chronicle. 8 Apr. 2016. Web. 29 Apr. 2016. 

Nikolewski, Rob. "The Uber Effect: Why Cab Companies Hate Ridesharing." CaliforniaWatchdog.org. 29 Sep. 2014. Web. 29 Apr. 2016. 

Uber. "Our Trip History." 2016. Web, 29 Apr. 2016. 

Weinstein, Jack Russell. "Adam Smith (1723-1790)." Internet Encyclopedia of Philosophy. n.d. Web. 29 Apr. 2016. 

Wieczner, Jen. "Lyft Is Growing at a Crazy Pace in New York and San Francisco." Fortune. 8 Mar. 2016. Web. 29 Apr. 2016.