Over the past seven years, a number of mobile apps and websites dedicated to various aspects of the “sharing economy” have emerged. Uber, a car-sharing platform that was developed in 2009 is one of these technologies. It is a high-tech technology in the transport industry that connects travelers to drivers through the ride-sharing app. Since its launching in 2012, Uber has turned out to be the most widely used alternative to conventional taxicabs. Worth noting is that Uber is not similar to taxis because they are not required to have special licenses as other taxi drivers. Uber drivers operate using their cars to provide discounted fee rides (Schneider, 2017). As such, Uber is a kind of car-for-hire service that relies exclusively on smartphone technologies.
Uber services are available in more than 450 cities within more than 60 countries globally, including Indonesia, India, China, and African countries among others. In the seven years that this technology has existed, the company is valued at 51 billion US dollars, which makes it bigger than the US taxi industry and limousine business (Schneider, 2017). Moreover, it serves nearly 8 million passengers universally on a daily basis and has contracted more than 160,000 drivers globally. The number of trips made per day is around a million trips.
There are various characteristics of operations that make Uber to be different from the traditional taxi services. They include the use of a mobile application to link passengers to drivers for hire, reliability of the services, time-relied services, quotation of the most probable fare, and web-based pay as well as GPS tracking systems. The Uber Company prides itself in its ability to keep time, which is evidenced by their motto that says, “Where way of life meets logistics.”
The Uber Company has evoked a wide range of contrasting emotions. While its users love it due to the convenience it provides, the ease in using the application, and its affordable rates, it has also gained a lot of hatred from the conservative taxi drivers and state governments. There are even some Uber contracted drivers who strongly oppose the operations and practices of the company. Indeed, the Uber car-sharing platform has been the most controversial in the transport industry. Owing to the reason that it competes with traditional taxi and limousine drivers, they are currently experiencing minimal growth per annum. For instance, in the year 2014-2015, the traditional taxi and limousine industry only grew at an average of 0.4% (Ibisworld, 2017).
Most of the issues surrounding the Uber Company are associated with regulation. For one to become a taxi driver, they have to pay for an expensive license plate, which is not the case with Uber. For the Uber Black service, drivers are accredited as car hire drivers, to which anyone can become so long as they meet the Uber criteria (Ibisworld, 2017). Drivers enjoy income generated from this platform without having to pay for the expensive licenses. This is one of the issues that have raised controversy among licensed taxi operators. Moreover, UberX, a platform that allows riders to hire the car services at a low cost and is considered illegal in all countries where Uber operates continues to gain popularity and use. Although states have issued fines for this engagement, the Uber Company has been paying these fines, thus allowing their contracted drivers to participate without fright of the hefty fines. Bearing these reasons in mind, it is imperative to create a SWOT analysis that will help in examining how the threats and opportunities that the company is facing and is going to face are linked to the weaknesses and strengths.
|· Simple user-friendly phone App
· Has good marketing and advertisement strategies
· Well recognized
· Low operational procedures and prices
· Low pricing as compared to traditional taxis
· High standard of service
|· No privacy; Uber records where customer boards and gets off the cab
· Contracted drivers are the face of the company-causes bad PR at times
· Low earnings by drivers as compared to increased cost of operating the cab
· Easy business model to emulate
· Lack of loyalty amid Uber and its clients
|· Dissatisfaction of clients with conventional taxicabs
· New untouched markets globally
· Shorter waiting time for clients due to increase in Uber cabs
· Cheaper vehicles can be used
· There are increased services shift of consumers due to convenience
· Increase of the use of smartphones
|· Increased complaints in several states
· Fraud and scandals
· Dissatisfied drivers due to low profit
· Easy model to imitate
· Regulatory issues with local administrations that can cause bad PR and huge fines
The SWOT analysis above clearly shows that the Uber Company has strengths that are strongly interwoven with the opportunities that lie in its external milieu (B, H. A., 2013). In this regard, Uber should maximize its utilization of the most significant strengths. For instance, the SWOT analysis shows that Uber uses a client-centric approach, which could lay the margin between its thriving and failure in the transport industry. Therefore, it should strive to ensure that its customers are satisfied with the services they are given. Most customers will choose the convenience of the transport model as opposed to lower operational costs. As such, increasing the number of drivers and ensuring their job satisfaction could have bigger impacts for the Uber Company. The increased dissatisfaction of services offered by regular taxis is also another opportunity that could cause significantly bigger impacts to the company. If Uber has the intentions of exploring the heights of performance and success, then it should take advantage of its strengths while at the same time trying to solve the threats that appears to jeopardize the future of the company.
Uber has been determined to offer the best services at a price that is less than that of the regular taxi services. From the time it was initiated, Uber has urged its potential clients to make use of the new app in case the need of taxi services arises. Although individuals have shown emotions of dissatisfaction with the traditional cabs, the relationship between the company and its contracted drivers, along with that of the drivers and clients has at times gone sour. With the ever-increasing competition, Uber has to look for ways to ensure that both the customers and drivers are satisfied (Friend & Zehle, 2004).
Given a chance, I can bet that Uber may fail to succeed in the next two years unless something is done. My argument is based on the fact that the company is facing huge challenges and has actually gotten into some controversies regarding the manner in which it operates. In fact, I would take a bet of the $1000 in support of my argument that Uber will not succeed in the near future. The reasons that have made me take this firm stance regarding the company that have seen a fast growth since its establishment is due to its toxic internal culture that exploits the contracted drivers and to an extent, clients.
I argue that Uber is doomed to miss the mark if it fails to address its threats. Although it has done well in the past few years, I see a disturbing fact when I critically examine the correlation amid strengths and threats. Of note is the fact that Uber’s internal flaws significantly impacts the relationship between the company and its external milieu (Bensinger, 2017). This is due to the reason that the existing internal weaknesses intensify the existing threats almost to the point that the strengths present for the utilization of the opportunities. In other words, despite the fact that Uber’s strengths have a big effect to the opportunities; it does not necessarily mean that the company will overcome the imminent threats.
The first thing that I believe will cause the downfall of Uber in the ensuing two years is because of the bad PR that they have. While drivers are the face of the company, they are not trained on how to handle diverse clients. Secondly, the company has been involved in a wide range of scandals in the recent past. For instance, there was a complaint by a client who indicated that she was raped after boarding a cab before she reached her destination. Such are some of the instances happening to Uber clients in the global arena such as India. Finally, some allegations that have been filed in the courts of law such as the conspiring to steal and imitate Google’s self-driving vehicle technology will have a major impact on the downfall of Uber in the near future.
When I examine all these threats in relation to the opportunities, I find that the investing competences and high appraisals surpass technological advancements by more than 10%. While technology such as the phone application attracts customers, it does not have the capacity to alter the rules and regulations that govern distinct states; in contrast, money has the capacity. Rather than investing a lot of money to invest in more markets, Uber should try to resolve the existing threats in the markets they have penetrated (Controlling organizational performance, 2014).
Since the year 2009 when Uber was initiated, it has been a fast-growing business in various parts of the globe. The company has had a number of conflicting strengths, opportunities, and weaknesses as well as threats. While the strengths have given Uber incredible power to exploit the abundant opportunities, there are a number of weaknesses that threaten to jeopardize the flourishing of the company. The regulation threat, as well as the dissatisfaction that exists amid the drivers and the company as well as between clients and drivers, can create issues that would otherwise bring the company down if not addressed. Any person with the intentions of reaping a magnanimous harvest out of a business venture ought to ensure that both the employees and clients are satisfied with the profit margins and services offered, and Uber is no exception.