The taxi industry has varied and improved considerably. There are various ways of satisfying customers and offering appropriate services while gaining organizational and financial benefits. Although there are mistakes and challenges that the rides sharing companies make, they strive to solve the issues in the shortest time possible and ensure that customers and employees are satisfied with the conditions offered (Stemler, 2016). Uber is one of the established rides sharing companies around the world. This report discusses the company analysis of Uber and designs an information system that meets the requirements of the company.

Uber Technologies Inc. is a world-renowned transport tech giant. It has set up shops in close to 800 cities and over 70. It has been making profits over the years, recording up to $20 billion from travels booked and minting excess of $6.50 billion in 2016 as the net revenue. Nevertheless, in the same year, they documented losses of up to $2.8 billion (Calo & Rosenblat, 2017). Uber has no cars to its name and depends on drivers who come in as private contractors who use the Uber app they drive with the taxi firm using rented or personal vehicles.

The company’s management strategy and mode of operations invoked chaos amid the taxi industry globally, leaving the competition shaken. Uber achieved this by providing a wide range of services to meet the needs of customers focusing on convenience. Additionally, costs have been reduced by providing an online platform that connects the customer to the nearest cab one tap away from their smartphones, a move that has attracted many leading to their growth.

Classification of the Organization

There are five forms of the organization under Mintzberg’s classification, namely Simple, Machine, Professional, Divisional, Adhocracy. As per Mintzberg’s classification (Mintzberg, 2019), Uber’s organizational form can be categorized as merely a structure. Uber was unveiled in 2009 by Travis and Garrett Camp. This duo structured the company loosely motivated by creativity and innovation to provide somehow a solution to the preexisting problem in the taxi industry in San Francisco. Tasks are assigned to individual employees who report to the owners with a very informal hierarchy, otherwise referred to as low management levels (Peticca-Harris et al., 2020).

The Value Chain Model of Uber

A value chain model is an analytical tool for strategically identifying value sources of competitive gains. In this regard, we look at Uber’s value chain through Porter’s model for the global transport tech giant.

Primary Activities:

Inbound logistics -Logistics revolves around receipt of raw materials and their storage. However, Uber has no cars to its name but instead outsources its vehicles from drivers who come in as private contractors (Hales & Mclarney, 2017). These drivers, however, require smartphones to access the services from the Uber app, and the value chain would focus on the technological aspect of the business operations. Nevertheless, the business model is such that inbound logistics is confined to equipment and other office hardware for sustainability.
Outbound logistics – In value chain analysis, outbound logistics for Uber is mainly related to distribution and warehousing. In the taxi industry, this does not come into play as it is difficult to separate the supply and consumption of services.
Marketing and Sales – Social media is critical for the ride-hailing company to market its brand. Target customers also receive information through word of mouth, sales promotions, print and mainstream media, and events explicitly organized as a public relations frontier. Subsequently, the customers can make payments without necessarily using cash or credit cards as charges can be created if registered with the app.
Service – Effective high-level customer service comes as a plus and gives them a competitive advantage. Riders get a chance to rate the drivers after every ride with up to 5 stars, and low scores would result in account deactivation, thereby giving the drivers the urge to maintain hygiene and exercise good customer service relations. Ideally, the driver is required to use the shortest route possible, and customers may receive refunds if the driver does the contrary as every ride has a GPS track on the receipts.
Support activities – These include the administration and infrastructure with Uber’s net worth being estimated at $50 billion, the procurement of the company whereby the drivers are outsourced as contractors, and are put into their systems (Hales & Mclarney, 2017). Lastly, Uber has developed a mobile app that pins location using the GPS.

Uber’s Competitive Forces Model

Bargaining Power Of riders – Uber customers have high bargaining power because of competition from other taxis and alternative means of transport. However, Uber has a better pricing advantage in a given market share, and this contributes to further growth (Ng, 2016).
According to (Innovation Tactics, 2018), the bargaining power of cab drivers and cab owners is low. However, with the continued outcry for lower pays by cab drivers, their bargaining strength may improve if they achieve employee status and receive other perks.
The threat of new entrants poses a danger, and due to economies of scale, they would need to lower their costs such that new entrants find it hard to join the business and, in effect, cause an increased strength force.
The threat of substitutes – The future offers self-driving vehicles and other public transport systems like trams, trains, and city commuter buses, increasing the force of competition.
Rivalry among competitors – Rivalry comes out hard globally from other players occupying different geographical locations and dominating the scene, making the strength force high (Ng, 2016).

Uber Information System

Identification / Requirements

To create unique value offerings, Uber uses data that enables it to develop exclusive offers to both the rider and the driver. The ability of Uber to collect data has allowed it to introduce new proposals to the rider. The mechanism used in Uber’s data collection has been standardized globally, but it is updated in real-time. Uber determines the metrics that are necessary to ensure that offers like UberPool are profitable to the business (Lozinski, 2016). Such parameters include ‘trip count,’ the percentage of trip matches, the number of trips to the same destination, various driver metrics, and the number of trips made towards a specific goal over a particular time of the day. This data can enable data scientists to determine the cities that meet these criteria as defined above. The original metrics are updated as Uber introduces new towns to its information system. Venables Uber to assess if they will achieve profitability from their venture while also planning for the long-term when they roll out the service.

The requirement for a vast collection of data while at the same time creating a sophisticated algorithm that can predict the future has made the Uber system stand out. The algorithm used by Uber makes it consider data from outside sources such as local events, weather conditions, and the latest news. It has also been pursuing an active pricing rollout, which can be predicted before it happens based on block-to-block. The prediction also takes into account the number of people opening the Uber app in a given place and time. The dynamic pricing helps the Uber drivers to drive to certain areas before the surge (Lozinski, 2016). The system is data-intensive, hence allowing the drivers to get to an area where there is a guarantee for a higher fare price.

Stakeholders in the Uber system are employees who are the dominant stakeholders. They are divided into higher management levels, such as managers and the CEO, who are legitimate and compelling (Matherne & O’Toole, 2017). Employees in lower levels of management are legally protected but have less power. Drivers worldwide are also stakeholders with lesser but legitimate power. Cab companies and cab drivers are not legal but dormant stakeholders. The company manages the general mapping of stakeholders of uber so that these stakeholders do cause damage to the reputation of the company, its employees as well as the society at large.

Rich Pictures

Appendix 1, Figure 1.

Figure 1 shows the GPS improvement system of Uber. It comprises a particle filter service, a manager service, cloud storage, a management service of a 3D map tile, and the Uber HTTP API. These components integrate with other Uber services (Iland et al., 2018).

. The feed content delivery of the Uber system ensures that content is delivered to drivers and that the received information is registered in real-time. (Lozinski, 2016)

Appendix 5 Figure 5

Figure 5 shows the Big Data platform that incorporates Hudi to ensure that incremental data is ingested and served more efficiently through the open-source Hudi library. On the other hand, it provides sufficient storage while reducing the latency of data from 24 hours to less than one hour (Shiftehfar, 2018).

The Business Process Model of Uber Information System

Appendix 2 Figure 2 (Allweyer & T, 2020).

Uber Information System Success Model

Appendix 2 Figure 4

The System Quality – The Uber system can estimate the number of users in an area by use of ‘heat maps’ and algorithms. This is then matched to the available number of drivers in the city. The system ahs a base fare depending on the town, which varies the price per minute and mile. Also, it is user friendly and convenient for all smartphone users and can interact with drivers hence making it a quality file-sharing system (Lee et al., 2018).
Information Quality – Information acquired from essential statistics like the demand for drivers in a particular area and the times that the smartphone application is opened so that it can gauge the demand and supply. The riders do not have to wait long hours while drivers use their time efficiently (Lee et al., 2018).
Service Quality – Uber offers efficiency and high professionalism to the consumer. New riders are guided through artificial intelligence hence easing the usability of the app. On the other hand, the file-sharing system is compatible with various operating systems like Android and Windows.
Use – Uber provides many flexible user interfaces that facilitate easy access from any location, online base file storage, and the rider can share a calendar of their upcoming events, important deadlines, deadline like catching up with flights, or the time for pick up.
User Satisfaction – When using Uber, there is no exchange of cash. This is because relevant credit information or payment mode should be shared while signing up for an account. This is what is used for payment, and the rider is charged electronically. Immediately after payment, a receipt is emailed that provides details about a trip, including the route used on a map, the drivers’ features, and the ride’s cost and time. The user can rate the driver and verify the outline of the route taken.
Net benefits – Benefits of the Uber system are inefficiency of the file-sharing network, high productivity, high quality of output. The file-sharing system offers faster processing, high capacity for processing information, and expensive upgrades in the Appstore. Negative issues are issues of miscommunication in the file-sharing order because it uses algorithms and automated systems to decide the cost of the trip and the driver to send to the rider way. The method may see a surge in calls and raise the prices dramatically, leading to overcharging, especially in times of emergencies (Lee et al., 2018).

The Pros and Cons of Uber Information System

Uber has made changes in the structure of the old taxi industry because individuals do not need to wave physically at a taxi or makes calls to a local car service when they need a cab which meant that they would have to reserve a car for about thirty minutes before the arranged time of pick up. Uber, E-hail service enables one to secure a car or a taxi by use of a smartphone from any location. However, disruptive technology has been a drawback to the traditional taxi services since it has reduced its market share while reducing the profits made by drivers. The distinct advantages that will be achieved by using uber are the convenience and cashless aspect of Uber. The system ensures that the user can hail a car from wherever they are located instead of hailing taxis, calling o having to wait for a long time waiting for your customer to arrive. Since the customer has their credit card linked to the e-hail account, there are no cash transactions (Frost, 2017).

The system delivers professional service because the taxis are regulated. Also, the majority of vehicles used are the latest models, maintained well, and driven by professionals with proper commercial insurance coverage. The customer is also able to communicate with the driver from the point when he accepts an assignment, and if need be, they can deliver. It is safe since the driver only learns where the customer is heading after the fare starts. Hence the problem of denial of access to taxis by because the customer may be travelling to defective parts of the town is settled. In cases where the driver is unprofessional, it is easy to weed them out by rating their performance after the trip. Thus fosters a great experience and satisfaction by the customer. Their pricing is also lower when compared to traditional car services and taxis.

Despite the success and efficiency of the system, there are a few downsides for both the drivers and the customers. “Surge Pricing” annoys most of Uber customers; this is a pricing method in the free markets whereby the prices are either raised or lowered depending on demand and supply (Jalloh, 2019). This means that prices are determined by the number of passengers who want to ride in vehicles and the number of available cars. Trip cancellation by drivers can also be inconveniencing to customers. Low fares affect driver’s earnings negatively, especially those who rent vehicles from third parties. Also, they cater to most costs of servicing these vehicles, minor repairs, and fuel.

Privacy has been an issue of concern due to several accusations that uber has been tracking its customers through smartphone app help. The ‘God View’ is the tracking system that they have been using to keep track of their customers’ contacts and send advertisements about the services they offer. Some people have argued that police departments are monitoring people; however, their difference in the police monitoring is different since the police aim at maintaining law and order while Uber aims at expanding the range of their market and own business interests (Frost, 2017).

The success of the Uber Information System

The company relies heavily on Big Data and Data Science intelligence models. Also, it has successfully managed this data in a more effective way than traditional taxi services. The overall business model is based on crowdsourcing. Anyone with a car and wants to be a driver can do so after being scrutinized by the company. The company has an extensive database of drivers across cities in different regions, and thus any rider is matched with the nearest Uber car near the place. The company has embraced the dynamic surge pricing as ride fares are calculated as per the number of hours a ride will take compared to the miles covered (Lozinski, 2016).

Classification of the Uber Information System

The information-sharing system of the Uber engine is both a front-end and a back-end system. The market place is the frontmost end since the marketplace channels the real-time requests, the real-world, and locations into the ladders and engineering chutes of Uber. The market place also houses a majority of logic for products such as UberEATS and UberRUSH; hence most of the requirements by uber are found in the market place. Also, engineers build data solutions and infrastructure out of the Marketplace—the NGINX front end proxies to the frontline API through a load balancer and use front-end applications. The back-end is mainly used for storage (Insardi & Lorenzo, 2019).

Conclusion

Uber aims at expanding its growth as it seeks to enter and colonize new cities. Their endeavour to become the top taxi provider globally would require support from other local stakeholders to practice the outlined analysis of Porter’s competitive five forces to address the high and low pointed out in each power. Also, the newly installed file-sharing system aims at reducing technical hitches, enhance productivity, and achieve the flexibility of accessibility by a single interface or device. Uber operates both front-end and back-end systems, which increases productivity to both ends. Uber should guard the system to keep off access by hacking and access to the company reports. The efficiency of their online platform and have little if not nil hitches. However, If the cons stated in this paper are not addressed, the company risks making losses and losing clientele to its competitors. Consequently, the transport tech giant also has to address the plight of its drivers as they have in the recent past, complained about low pays and low fare charges, which makes the alternative transport operators getting better rewards.

Recommendations

It is essential to develop solutions in each of the operational and systematic problems that have been outlined in this report. This report proposes a revision of the potential issues described in the company analysis section. For instance, on the part of drivers’ complaints, the company should find a way to unionize and offer employees positions to drivers so that they can enjoy the benefits that come with it. Another problem that becomes evident is the entrance of new players in the taxi industry that give Uber a run for their money. This problem can be addressed by continually improving its service provision and ensuring customer satisfaction by focusing on the convenience of its customers.

Another constraint facing Uber is the increasing bargaining power of its customers due to other alternative means of travel. This factor makes it hard for Uber to dictate higher prices in fares. To counter this, Uber would need to develop attractive customer care and service provision that would give its customers value for money. Necessarily the transport tech company should emphasize its marketing and sales strategies by closely working with its support systems, which at times ensure driver ratings are at the top and promote the brand by identifying its main selling areas. The public is known to respond well to advertisements as well as other marketing tools, which, in effect, translates to an increased customer base.

References

Books and Journals

Allweyer, T., 2020. BPMN 2.0-Business Process Model and Notation: Einführung in den Standard für die Geschäftsprozessmodellierung. BoD–Books on Demand.
Calo, R., and Rosenblat, A., 2017. The taking economy: Uber, information, and power. L., Rev., 117, p.1623.
Frost, J., 2017. Uber and The Gig Economy: Can The Legal World Keep Up?. SciTech Lawyer, 13(2), p.4.
Hales, G., and McCarney, C., 2017. Uber’s Competitive Advantage vis-à-vis Porter’s Generic Strategies. IUP Journal of Management Research, 16(4).
Insardi, A. and Lorenzo, R.O., 2019. Measuring accessibility: A big data perspective on Uber service waiting times. Revista de Administração de Empresas, 59(6), pp.402-414.
Lee, Z.W., Chan, T.K., Balaji, M.S., and Chong, A.Y.L., 2018. people participate in the sharing economy, an empirical investigation of Uber. Internet Research.
Matherne, B.P., and O’Toole, J., 2017. Uber: aggressive management for growth. The CASE Journal.
Mintzberg, H., 2019. Structured observation as a method to study managerial work. Journal.
Ng, S., 2016. Uber Technologies Inc. as a Disruptive Innovation.
Patricia-Harris, A., de Gama, N. and Ravishankar, M.N., 2020. Postcapitalist precarious work and those in the ‘drivers’ seat: Exploring the motivations and lived experiences of Uber drivers in Canada. The organization, 27(1), pp.36-59.
Stemler, A., 2016. Betwixt and between Regulating the sharing economy. Fordham Urb. L.J., 43, p.31.
Teece, D.J., 2018. Business models and dynamic capabilities. Long Range Planning, 51(1), pp.40-49.
Winkelhake, U., 2018. Vision Digitised Automotive Industry 2030. The Digital Transformation of the Automotive Industry(pp. 77-126). Springer, Cham.

Websites

Delone, W.H. and McLean, E.R., 2003. The DeLone and McLean model of information systems success: a ten-year update. Journal of management information systems, 19(4), pp.9-30. https://www.tandfonline.com/doi/abs/10.1080/07421222.2003.11045748
Iland, D., Irish, A., Madhow U. and Sandler B., 2018. Rethinking GPS: Engineering Next-Gen Location at Uber. Uber Engineering. https://eng.uber.com/rethinking-gps/
Innovation Tactics. Strategy: Porter’s Five Forces explained (plus example Uber). March 18, 2018. https://innovationtactics.com/porter-five-forces/
Jalloh, M., 2019. Uber: Advantages and Disadvantages. Budgeting and Savings: Investopedia. https://www.investopedia.com/articles/investing/110614/taxi-industry-pros-cons-uber-and-other-ehail-apps.asp
Lozinski, L., 2016. The Uber Engineering Tech Stack, Part II: The Edge and Beyond. com, 21. https://eng.uber.com/uber-tech-stack-part-two/
Shifter, R., 2018. Uber’s Big Data Platform: 100 + Petabytes with Minute Latency. Uber Engineering. https://eng.uber.com/uber-big-data-platform/

Appendix

Appendix 1

Figure 1. Rich Picture was showing the GPS Improvement System of Uber (Iland et al., 2018).

Appendix 2

Figure 2: Business Process Model of Uber Information System

Appendix 3

Figure 3. Uber’s Value Chain Model

Appendix 4

Figure 4. Uber Information System Success Model (Delone & McLean, 2003)

Appendix 5

Figure 4. Rich Picture showing the Big Data platform that incorporates Hudi to reduce Latency of Data

Appendix 6

Figure 6. Uber’s Competitive Forces Model

UBER

Company Analysis

Introduction and Competitive Strategies