• Uber Pestle Analysis 2019 

1.0 Introduction

Founded in 2009, Uber is a taxi and ride-share app-based platform that matches riders with drivers of own cars via an app or its website. Headquartered in San Francisco, the ride hailing company offers services such as car sharing, taxi cab hailing, bike sharing, food delivery, transit tickets, and rental cars at the lowest possible cost. Uber’s strategic focus over the last few years has been to drive efficiencies via scale and to this end; it has invested vast sums in its technology platform and demand prediction algorithms that match supply and demand in an effort to offer the lowest prices, which it touts as up to 40% cheaper than conventional taxis (Mintel 2018).

2.0 SWOT analysis of Uber 2019

2.1 Strengths

2.1.1 Dominant leadership position

• Uber has dominated the ride hailing market operating in approximately 83 countries and over 674 cities worldwide with over 77% share of the US ride hailing market. As of 2017, the company’s customer base rose to 40 million per month (Dogtieve 2018). First mover advantage has given it an opportunity to capture the biggest share of the ride sharing industry.

2.1.2 Big brand name and awareness

• Uber has become the world’s biggest ride sharing service operating in more than 83 countries and 674 cities globally. As of 2018, the company commands 73% share of the market in USA (Statista 2018). This is in line with a consumer survey in the US that showed 76% of ride hailing app users used Uber more frequently compared to 10% for main rival Lyft.  Another 70% surveyed, who hadn’t used the company’s services stated they were familiar with Ubers brand name (Kulkarni 2017).

2.1.3 Convenience, ease of use and low costs

• With its different services, uber has made its services easy to use with a press of a button in the mobile app and the closest driver to your location will be hailed. It is thus easy to use and also affordable for different classes of people, which has increased its customer base and market share. According to research, most of the customers who use Uber services have mentioned price, easy of use and convenience as their top reasons for using the service (Kulkarni 2017).

2.1.4 Highly diversified

• Uber has diversified its services through offering alternative transport modes including transit tickets, food delivery (Uber Eats), rental cars (Uber Rent), bikes (Uber Bikes) and cash payment options. This is a major strength that has enabled it to take a big share of consumer expenditure across differing public transportation modes, short term rentals, package delivery and short haul services, helping it grow market share, revenue and profits.

2.2 Weaknesses

2.2.1 Sexual harassment accusations

• According to a report by CCN, at least 103 Uber drivers have been accused of sex abuse by clients in USA in the past four years (O’Brien et al., 2018). As the most valuable privately held tech start-up in the world operating in over 630 countries, the sexual assaults have ruined its reputation in some US geographies with many women turning to other ride hailing services like Lyft. Similar incidences have been reported in India where a rape charge against an Uber driver in New Delhi led to its temporary ban (Gordon 2015).

2.2.2 Falling market shares

• As of 2017, Uber’s market share fell from 84% to 74% while Lyft’s grew from 20% to 22% mainly because of the various scandals and the delete Uber campaign (Bhuiyan 2017).

2.2.3 Culture of unethical practices

• Despite a new CEO, Uber still faces remnants of the company’s old frat house culture of sexism and unethical practices which have resulted in a fall of Uber’s customer’s base with more than 400,000 of them deleting their Uber accounts (Graham 2018; Carson 2018). Its poor reputation has hurt the company’s reputation and brand image, giving an opportunity for competitor Lyft to grab the company’s market share and customer base.
• Failure to retain drivers.

2.3 Opportunities

• Decline of car ownership especially among millennials
• Rise of autonomous vehicles
• USA aging population
• High cost of living across USA
• USA’s reducing unemployment rate
• USA’s strong economy
• Trump’s law to refund federal employees for all their trips with ride hailing companies.

2.4 Threats

• New York’s cap on Uber and other ride hailing companies
• New York City regulators plan to raise wages for Uber and other ride hailing apps.
• Privacy concerns over use of geo-location data could lead to legal penalties
• Social activism campaigns such as DeleteUber

Figure 1: Uber Swot Analysis 2019

Conclusion

The SWOT analysis presents a lot of inner weaknesses that are likely to keep the company on a downturn if not checked. The recent scandals including sexual harassment accusations, poor company culture, failure to maintain its employees and the data breach are among the factors that are affecting the company currently leading to a fall in market share, market shares and poor reputation. However, the company could use its major inner strengths like its big brand name, omnipresence and market dominance to mitigate these threats.

References

Bhuiyan Johana (2017) “Uber’s USA sales have recovered after the #delete Uber campaign but Lyft is still gaining” Recode [Online] at https://www.recode.net/2017/11/5/16599156/uber-business-market-share-lyft-scandal-delete-uber

Carson, Biz (2018) “Inside Uber's Effort To Fix Its Culture Through A Harvard-Inspired 'University' Forbes [Online] at https://www.forbes.com/sites/bizcarson/2018/02/03/inside-ubers-effort-to-fix-its-culture-through-a-harvard-inspired-university/#7a99749b1695

Dogtieve Artyom (2018) “Uber revenue and usage statistics 2017” Business Of Apps [Online] at http://www.businessofapps.com/data/uber-statistics/

Gordon, Lydia (2015) “Uber – Court Cases, Bans and Automobiles” Euromonitor [Online] at https://blog.euromonitor.com/uber-court-cases-bans-and-automobiles/

Graham Jefferson (2018) “Vows to ‘delete Uber’ weren’t just talk: Uber loses market share to Lyft after year of scandal” USA Today [Online] at https://www.usatoday.com/story/tech/talkingtech/2018/05/15/uber-lost-market-share-lyft-after-year-scandals-emarketer-says/612348002/

Kulkarni, Rohit (2017) “Uber & Ride-Sharing: The $650 Billion Question” Sharepost [Online] at https://sharespost.com/insights/research-reports/uber-the-ride-sharing-market-the-650-billion-question/

Mintel (2018) “US Car Sharing and Ride Sharing Market Report” [Online] at https://store.mintel.com/us-car-sharing-market-report

O’Brien Sara Ashley, Black Nelli, Devine Curt and Griffin Drew (2018) “CNN investigation: 103 Uber drivers accused of sexual assault or abuse” CNN [Online] at https://money.cnn.com/2018/04/30/technology/uber-driver-sexual-assault/index.html

Statista (2018c) “Ride sharing services in the U.S” Statista Inc