10-1
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
I. CASE ABSTRACT
Uber, originally known as “UberCab,” was started by Travis Kalanick and Garrett
Camp in San Francisco, California, in 2009. Its target audience was young,
educated, tech–savvy urbanites, more likely to rent than own their own homes, who
generally got around via public transportation, biking, or walking. The company
grew rapidly and by 2015 it was providing carpooling services in 300 major cities
in fifty–eight countries around the world.1
Decision Date: 2014 FY Sales: $104 million
FY Net Loss: $30 million
II. CASE SUBJECTS AND ISSUES
Data Privacy First Mover Advantage Strategy
Formulation Competitive Advantage
III. STEPS COVERED IN STRATEGIC DECISION–MAKING PROCESS
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
IV. CASE OBJECTIVES
1. To discuss Uber’s regulatory environment.
2. To discuss Uber’s challenges in Global Expansion.
V. SUGGESTED CLASSROOM APPROACHES TO THE CASE
1. This is an excellent case for instructor–led discussion.
VI. DISCUSSION QUESTIONS
1. How is ride–hailing different from taxis?
2. What was Uber’s pricing strategy?
VII. CASE AUTHOR’S TEACHING NOTE—Not Available
VIII. STUDENT STRATEGIC AUDIT
I. Current Situation
A. Current Performance
Background: Founded in San Francisco, California in 2009.
Aug 2013, raised $258 million from Google Ventures.
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
2. Mission: Making transportation “as reliable as running
water” everywhere, for everyone.
3. Objectives:
● Offer service to everyone, including luxury and
affordable options.
(1) Create the world’s biggest taxi networks,
connecting riders with safe, reliable, and
convenient transportation providers at a variety
of price-points in cities around the world.
4. Strategies:
● Rapidly expand product offerings to utilize
technology.
5. Policies:
● Protecting community.
● Safety for all.
6. International: the core of Uber is to expand globally;
II. Corporate Governance
A. Board of Directors
1. Eight members:
● Four internal and four external.
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
B. Top Management
1. CEO: Travis Kalanick
2. Nine executives; one international leadership positions,
sixty country-based CEOs.
6. N/A
7. Some strategic decisions are inconsiderate of privacy laws,
III. External Environment: Opportunities and Threats
A. Societal Environment
1.
a) Political-Legal environment
● Favorable changes in drunk driving laws which Uber
can position itself as a “safe” alternative. (O)
● Differentiated political and governmental landscape
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10-5
● Rise of shared economy in the US, increasing the
potential for people opting for ride-hailing services
and carpooling instead of owning a car. (O)
cutting supply of crude oil, the subsequent rise in
oil prices will hinder drivers to offer more rides
unless there is an increase in the price of a Uber
ride. (T)
c) Social
● Rise of the millennial population, whose personality
is generally defined by being fast and effective,
d) Technological
● Rise of satellite technology making GPS technology
faster and accurate. (O)
2. Yes, these forces are differentiated across the globe.
However, some forces are similar as well. For example, laws
regarding taxi services, data privacy, and automobile related
laws are varied across the globe. On the other hand, the general
characteristics of the millennial population are similar.
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10-6
B. Task Environment
1. Industry
a) Threat of new entrants: High
● No, proprietary resource that cannot be copied by the
competitors. Lyft has the exact same core business
model and application technology as Uber. (W)
global scale. (S)
b) Bargaining power of Buyers: High
● Low-to-nil switching cost for customers for using
different ride-hailing services. If Uber’s surge
c) Threat of substitute products and services: High
● Availability of numerous ride services ranging from
public transportation to cycling and walking.
d) Bargaining power of suppliers: High
● Suppliers are people with cars. Uber does not own
vehicles.
e) Rivalry among competing firms:
● Intense price war between Uber and Lyft in highly
populated cities in the US.
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10-7
f) Relative power of unions, government, special
interest groups etc.: High
● Despite significant investment to establish a
2. The key factors in the immediate environment, and current and
future threat, and opportunities are given below:
a) Customers: Price sensitive (current threat).
b) Competitors: No core differentiation and price war
(current threat).
IV. Internal Environment: Strengths and Weaknesses
A. Corporate Structure
1. Decentralized Management or Management by Objective (S)
a. The decision-making authority is decentralized to
2. The structure is clearly understood by everyone in the
corporation. (S)
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10-8
3. The present structure consistent with current objectives,
strategies, policies, and programs. Their objective of
rapidly expanding product offerings to utilize technology
is supported by the decentralized management.
4. N/A
B. Corporate Culture
1. Well-defined corporate culture, where Uber strongly values
and encourages a culture of customer service and respect
for both the driver and passenger.
C. Corporate Resources
1. Marketing
a. Uber uses a variety of marketing strategies and
programs to promote its services. Strategies included
“First Rider Bonus Coupon,” referrals, word of mouth,
and special promotions in new cities.
environments.
b. Uber is performing well in terms of analysis of
market position and market mix in both domestic and
international markets. Product offerings differ from
city to city both domestically and internationally.
E.g.: UberRush, UberSelect, and short-term services
such as Uber ice cream, Uberboat, and Uberhealth
i. Customization, globalization. Meeting the demand
with a supply.
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
and loyalty. Promotional efforts are common
(e.g.: $30 off the first ride for new users).
c. Yes. Uber uses a decentralized marketing strategy
where they provide the local community managers the
d. Uber’s marketing adjusts in each city and country
they operate in where product portfolios and market
segmentation would adapt according to the city in
service.
2. Finance
a) Financial objectives:
● Maintain growth in revenue in its +300 markets.
● Increase profitable markets from eighty to all 300
ii. Consistent with its mission of reliable
transportation everywhere.
● Growth and customer loyalty are building
blocks to goals(expansion at the expense of
b) Privately held company. No public financial statements
available. Revenues tied inability to leverage product
offerings (rapid revenue growth). Currently expensing for
growth allowing for the market to properly mature and
sustain itself (major growth but no earnings).
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10–10
i. Uber is looking to grow exponentially to a point
where the market can sustain itself. Uber is
operating at a loss to gain traction and establish
c) Lyft is also private. Uber’s revenues outshine
traditional taxi industry.
d) N/A
e) 80/300 cities profitable. Funding to each city dependent
upon regional needs and goals.
f) Optimize funding to ensure global growth goals. Direct
the company into a successful IPO.
3. Research and Development (R&D)
a) Optimize supply/demand pricing algorithms,
continually innovate tech platform (user experience
b) Growth and increased valuation. No profits as of
yet.
c) Competent in tech transfer (global platform used in
all 300 operative cities, work-teams dispersed in
multiple locations). Concurrent engineering, as R&D
and launched improvement are constant.
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10–11
4. Operations and Logistics
a) Rapidly grow product offerings globally. Included
UberX, UberXL, UberBlack, UberSUV, UberPOOL,
UberTaxi, UberSelect, Uber for Business, and UberRUSH
(UberEATS) to offer service for virtually every
b)Uber global infrastructure was the main advantage
over local the competition. Lessons learned from
difficult countries will be applied to future gains.
i. Factors to be considered in global operations
include laws, affordable access to vehicles, mobile
phones, and scarce gasoline.
ii. Depends on local CEOs to tailor hiring policy and
operations to maintain customer satisfaction.
c) Uber service affects from
● Natural disasters: safety of drivers and guests,
but can also present opportunities to operate
d) Operations much leaner than traditional taxi industry.
160,000 active drivers with no salaries and that do not own
any cars. Adequate support staff to maintain a high level
of customer service on the app.
e) Low ETA in more populous regions (e.g.: cities). Fast
service depends on the number of drivers in proximity to