Assignment 6.

2: Choosing the Path

Danna Krayem
Organizational Metrics
Mark Smith
University of Advancing Computer Technology
2/19/2024

Current Climate of Uber

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Uber is a disruptive force in the transportation industry that has

revolutionized transportation services in the mobility, delivery, and freight segments

worldwide (Craft, 2024). The mobility segment focuses on connecting consumers

with transportation modalities that include ridesharing, carsharing, micromobility,

rentals, public transit, taxis, etc. (Craft, 2024). The delivery segment enables

consumers to look for and discover local restaurants, order a meal, and pick up at

the restaurant or have the meal delivered (Craft, 2024). The freight segment

focuses on connecting carriers with shippers and informing carriers about pricing

while helping them to book a shipment (Craft, 2024). It is necessary for Uber to

adapt to changing market dynamics and capitalize on emerging trends in order to

maintain its competitive advantage in the market, especially with all the copycat

ride sharing services available now such as Lyft which are working to gain a

significant portion of its market share. The diagnosis of the potential changes

needed to help Uber maintain its market position suggests that there is a need to

integrate new technology, expand into other markets, and diversify service

offerings.

Integration of New Technology

With respect to integrating new technology, there are several new

technologies that Uber might consider including autonomous vehicles and electric

vehicles. At the moment, Uber is concerned about how much it pays its drivers as

evidenced by its CEO’s public admission that the company incorporates behavior

patterns of its drivers in its pricing algorithm that determines how much to pay

them (Skelton, 2024). It makes sense that it would be concerned about keeping

driver pay low so that it could make sure it remains profitable. Its concern for

keeping its driver pay low makes it likely that it will heavily consider investing in
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autonomous vehicle technology to leverage the ability of the technology to reduce

its operational costs, improve safety, and improve customer experience. Taking

advantage of autonomous vehicles accomplishes these objectives by eliminating

the need for human drivers which substantially lowers it labor expenses and its

likelihood of risks associated with human error. The technology built into

autonomous vehicles also supports the personalization of transportation experience

to earn higher customer satisfaction and loyalty (IEEE, 2018). It is also likely that

the company will leverage the use of electric vehicles to help Uber reduce its carbon

footprint while contributing to environmental sustainability to align with the

interests of its environmentally conscious stakeholders. Leveraging this technology

will also mitigate risks associated with fluctuating fuel costs to align with

stakeholder and investor interests in maintaining the profitability of the

organization. It is likely that adopting eco-friendly solutions and business practices

will become a trend enforced by regulatory bodies in the future if it isn’t already.

However, the ability to fully leverage these technologies at this point in time is not

necessary feasible as there are still concerns regarding the reliability and safety of

autonomous and electric vehicles, especially in terms of their battery life and

functionality in situations where there are electrical outages.

Expansion into Adjacent Markets

In terms of looking into expanding into adjacent markets, Uber might

consider expanding further into the delivery services market. Its existing

infrastructure and technology can help it to gain a strong market share in the

growing e-commerce industry, allowing it to cater to the increasing demand for

quick and convenient delivery options. Capitalizing on this trend can help the

company to maintain its sustainability by diversifying its revenue streams and

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reaching new customer segments. Another attractive option for an adjacent market

that Uber can expand into is the healthcare sector. Uber can potentially create

strategic partnerships with different healthcare providers and insurers to provide

specialized patient transportation services to and from appointments. A lot of

disabled patients or older patients have a difficult time finding a way to make it to

their medical appointments, and Uber can fill the market gap by addressing its

unmet needs to leverage the additional revenue channel. Leveraging this option is

likely to expose Uber to risks associated with healthcare regulations such as HIPPA,

so it would likely not be an overnight transition.

Diversification of Service Offerings

Some paths Uber might consider in terms of diversifying its service offerings

include employing a subscription-based model and employing a Mobility as a

Service (MaaS) model. The subscription-based model can allow people looking for

ride-hailing services as a tool for increasing customer retention and increasing the

life of a customer. A subscription-based model for Uber will likely take the form of a

tiered subscription plans that lets users enjoy discounted fares with priority booking

and priority access to premium vehicles (Shelley, 2016). In terms of the Mobility-as-

a-Service (MaaS), leveraging this type of service can help Uber to increase its

market share in the transportation industry by becoming the one stop shop for

mobile solutions. Mobility as a service (MaaS) combines multiple transportation

operators into one single ecosystem of mobility (Urwin. 2023). The way that the

Mobility as a Service would work for Uber is that is would potentially integrate

multiple transportation services, such as ride-hailing, public transit, bike-sharing,

and car rental, into one single, centralized, streamlined platform, to provide users

with easy access to transportation choices. Mobility-as-a-Service might also go the

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route of partnering with other transportation providers and combining their services

into the Uber app to increase the company’s customer base while enhancing its

ability to cater to diverse customer preferences and travel needs.

Conclusion

There are many routes that might potentially shape the future direction of

Uber to allow it to maintain its position as a market leader in the transportation

industry. Taking everything into consideration, leveraging new technologies,

expanding into adjacent markets, and diversifying service offerings are the likely

routes Uber might take to increase its ability to growth and its competitive

advantage. While these options seem promising, they introduce new risks to Uber’s

business operations which should not be ignored. Investing in strategic planning in

collaboration with key stakeholders can provide insight on how to leverage these

innovative options to help Uber navigate the uncertain and evolving future of the

transportation industry.
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References

Craft (2024) Uber. Craft. https://craft.co/uber

IEEE (2018) Personalization in advanced driver assistance systems and autonomous

vehicles: A review. IEEE. https://ieeexplore.ieee.org/document/8317803

Shelley, Ed (2016) What if Uber was a subscription business? Chart Mogul.

https://chartmogul.com/blog/uber-subscription-business/#:~:text=There

%20are%20many%20ways%20that%20Uber%20could

%20introduce,unlimited%20usage%20of%20the%20Uber%20service.

%20More%20items

Urwin, Matthew (2023) What Is Mobility as a Service? Built in.

https://builtin.com/transportation-tech/mobility-as-a-service

Skelton, Sebastion (2024) Uber CEO admits pricing algorithm uses ‘behavioural

patterns’. Tech Target.

https://www.computerweekly.com/news/366570421/Uber-CEO-admits-pricing-

algorithm-uses-behavioural-patterns