Uber pool Competitive Advantage

Uber pool Competitive Advantage

Executive Summary

Uber is overtaking the use of a traditional taxi. Uber guarantees both the driver and rider safety. This study explains logical and persuasive argumentation for the selection of the innovative tools and techniques used to support the Uber pool. A consistent and compelling articulation of a novel value proposition is discussed. Besides, the research describes a candid and critical self-reflection about including a reflection on the development of personal innovation capabilities and practices, identification of own individual strengths and weaknesses, supported with suggestions for self-improvement. The study concludes that Uber Pool has many benefits than any other Uber segment. The interaction with another rider makes the world a small space, and people connect quickly and make new connections.

Table of Contents

Executive Summary……………………………………………………………………………….2

• Introduction……………………………………………………………………………………4
• Literature Review………………………………………………………………………………4
  • Uber Pool Competitive Advantage…………………………..…………………………5
  • Market Segmentation………………………………………………………………….5
  • Beachhead Market…………………………………………………………………….6
  • Value Proposition Canvas…………………………………………………………….6
  • Business Model Canvas………………………………………………………………..8
  • SWOT Analysis………………………………………………………………………9
  • Porters Five Analysis…………………………………………………………………11
  • Conclusion……………………………………………………………………………12
• CRITICAL SELF-REFLECTION………………………………………………………….12

REFERENCES………………………………………………………………………………13

Introduction

Uber is a very prominent travel business in the world. Entrepreneurs and innovators have always admired Uber, and it has been on the limelight for many reasons recently, especially for its growing technological innovation. Uber adopts a business model that aims at reducing the cost of infrastructure as it does not have network infrastructure. Uber disposes of its vehicles without undergoing the cost of operating or owning it.

Literature Review

In this context, Uber’s novel value proposition is the Uber pool. It is an Uber ride that is shared between one or more travelers, who, in most cases, are strangers. Schwieterman & Livingston note that the parties should be heading in the same direction and split the total cost of the ride. Unlike Uber X, the Uber pool will be cheaper, and one will not be required to walk to a nearby pickup point. Just like Uber GO, the price quoted is shown before the approval of the ride, so one knows how much to pay, and the fare is calculated based on the time of the day and destination. Henao, (2017) notes that Uber pool prices are dynamic. Every Uber POOL request has a maximum of two people per ride, but one should feel free to come along with a friend.

The selection of co-riders depends on similar destinations and pickup stations. Uber pool aims at taking the customer to their efficiency based on the selected location (Smith, 2016). Once the Uber pool is started, they cannot cancel on the other rider, even upon your request.  In case there is no co-rider, one gets a solo ride and pays for the previously quoted price.

Uber pool Competitive Advantage

Global Presence–  Uber pool operates in more than 100 countries globally, making it more competitive than its competitors. Besides, Uber is used in rural and remote areas, and its services are secure and readily available, making it a success.

Cost friendly- Unlike Uber X, Uber GO, Uber XL, Uber pool is famous because it is economical and cost-effective. It has an application that is GPS enabled with a track system, making the booking of a cab faster and convenient.

Strategic partnership: Uber pool will collaborate with the car manufacturing industry to customize its vehicles that will be exclusively for Uber Pool, giving it a competitive advantage over its competitors.   

Uber Pool Market Segmentation

A previous study by Wyman (2017) highlights that market segmentation involves the division of markets into categories of similar characteristics. Uber pool will mix geographic and demographic variables enabling the company to price its services.  The demographics will help the company know the areas of target customers who want to use the app rather than public vehicle services. Uber pool is currently replacing taxis. Pratt et al. (2019) highlight that the target customers for Uber are people between the age of twenty to sixty who attend games, nightclubs, or bars frequently. Also, people who frequent travelers for pleasure or business either by air or public transit. Besides, men and women who do not have private vehicles, have not yet acquired driving licenses, or their driving licenses have been revoked.

Uber Pool’s Beachhead Market

A beachhead market is a small target market for a new product or service with specific features that make it suitable (Mohamed et al., 2019). The selection of the market depends on compatibility between the market, the product, and the availability of the resources. The beachhead market for the Uber pool in China. The reason for selecting China is because its customers have the same sales cycle and expect services to have similar ways of providing value. Besides, apart from using technology, customers use word of mouth in making transactions. The total addressable market (TAM) is the full revenue opportunities that are available for a product or service. It helps in the creation of priority business opportunities through being a fast metric of the potential available on a given occasion. Uber pool is in its early stages of determining its exact total addressable market that includes food delivery, personal mobility, and freight shipping. Its estimates are $2 trillion (Angrist et al, 2017).

End-User Profile for the Beachhead Market

Value Proposition Canvas

According to McGregor et al, (2015) Uber is a double-sided platform with value propositions of both drivers and passengers. The sides include drivers (supply-side) and passengers (demand side). For the riders, they can call a ride in the comfort of their homes, and track how far the driver is from their pick-up points. For drivers, they can quickly get started, choose their working hours, and a source of income too (Angrist et al, 2017). All propositions aim at reducing transaction and search costs. The driver’s schemes include generation of income, the flexibility of working hours, working under one’s supervision, and a reliable driver application with navigation and hearing devices.

The Value Proposition Canvas is a technique that ensures the positioning of a service or a product is within the needs and values of a customer. Initially, the framework was developed by Dr. Alexander for making sure the product or service fits the market (Mohamed et al., 2019). It is essential when refining the existing service or product is a requirement or a new service or product is being launched. The Uber pool value proposition canvas revolves around two building blocks; the value proposition of the company and consumer profile.

Customer Profile

Benefits – these are the expected gains and needs of the customer, and what the service receiver would enjoy and increase their likelihood of what the customer expects and needs, what would delight customers and what may increase their chances of value proposition adoption.

Disadvantages– the negative and painful emotions, risks, and experiences of the customer during service delivery.

Jobs of the customer– the emotional, functional, and social roles that customers perform, such as offering solutions to problems and satisfaction of their travel needs.

According to Hemel (2017), for the Uber pool to be successful, it should create a customer profile for every market segment as each has separate benefits, disadvantages, and jobs.

Company’s Value Proposition

Creators of gains- how the Uber pool service encourages customer gains and provides customers with added value (McGregor et al, 2015).

Relievers of pain- An explanation of means of alleviating customer pains

Services- The service provision that relieves pain by creating gain an underpinning value creation of a customer.

How Uber pool will match customer profile and value proposition

After noting the creators of gains, reliever of pain, and the services offered, each point is ranked depending on how it adds value to the customer (Cramer & Krueger, 2016). To meet the match, the services should address the essential benefits and disadvantages from the customer’s profile. Identification of value proposition is the first step to attaining a fit-in. Secondly, validating the critical aspects to customers and receive their feedback is essential. Besides, the company should evaluate the level of Uber pool’s competitive advantage in such elements to ensure the uniqueness of the value proposition and to what extent it is differentiated.

Uber Pool Business Model Canvas

The Uber company creates and runs the Uber mobile application, which allows customers who own a smartphone to order for a ride from Uber drivers who own the cabs (Farronato et al., 2018). The customers rate the driver’s performance, as the drivers also rate them to build an individual’s reputation and offer the experience of the best quality.

Key partners- The three primary Uber partners are drivers, shareholders, and technological partners (Möhlmann & Zalmanson, 2017). The Uber drivers are the supply side and deliver the value proposition to customers, as they interact one on one with them. The shareholders and investors help in the establishment of a company and the navigation of hardships in the process establishing itself in the competitive economy. Just like the drivers, technology partners facilitate the creation of a value proposition and eliminate any friction between drivers and riders.

Key activities- The primary ingredient of the Uber pool to have a competitive advantage is having a positive network effect (Farronato et al., 2018). The main activities involve the enhancement of positive indirect effects of the network and the elimination of the adverse effects. The negative externalities include poor behaviors between the driver and rider, friction from driver-rider interactions, and driver’s idle time as they wait for customers. The positive effects include the growth of the platforms to increase participants, engagement of riders, and continue cheaper riders for passengers who regularly commute through the Uber pool.

Essential resources- The primary supply of the Uber pool is the direct network effects. The network effect should be natured and created. The algorithms, statistics, and the ability to evaluate them are essential.

Uber Pool SWOT analysis

Strengths

• The Uber system is convenient for both the driver and the rider because of the flexibility of working hours. Also, drivers have the freedom to reject customers.
• The system of cashless payment enables the Uber pool track and selects the highest rated vehicles. Besides, the customer is quickly served and can track spending history.
• Uber loop does not employ drivers, meaning it has no responsibilities such as driver remuneration.
• The cost of operation is minimum as the driver interacts directly with the rider.

Weaknesses

• The Uber pool idea is prone to imitation, meaning there is high competition in the industry.
• The driver-rider relationship is low and lacks connection.
• There is no close relationship between the Uber company and its customers, and that may push some clients away.

Opportunities

• Customers prefer the Uber pool because of its relatively low prices and short waiting period.
• In countries like China, Uber pool services are convenient because of their market size.
• There is a significant market niche in rural and remote areas, and the Uber pool can invest in such (McGregor et al, 2015).

Threats

• The low turn -over and profit margins result in a bad reputation, discouraging drivers from joining the industry.
• Issues with the government lead to imposing fine, and thus a bad personal relation.
• Increased competition reduces profits, and thus few drivers will be willing to join the industry.

Uber pool Porters Five Analysis

The threat of New Market Entrants- Uber attracts many competitors as it makes enormous profits, and others wish to succeed like them. With the transport industry, it is easy to come up with similar or better services (Cramer & Krueger, 2016).

The Threat of Substitutions- Many companies can provide similar services, such as Bolt. Another alternative is the public transport service, which is even cheaper.

Negotiating Power of Suppliers- Uber’s business model depends on drivers as it does not own vehicles. Unfortunately, for one to be hired by Uber, there are many requirements and negotiations.

Threats of Buyers- Because of many competitors such as Taxify, the buyers have high bargaining power because of many alternatives.

The threat of Industry Rivalry- Similar companies in the industry result in competition with customers harvesting the majority of the innovations and thus monopoly.

Conclusion

Conclusively, Uber Pool has many benefits than any other Uber segment. The interaction with another rider makes the world a small space, and people connect quickly and make new connections. Also, it is a hassle-free ride, and one is a guarantee to get to their destinations on time.   However, people are unreliable and unpredictable. To some extent, the Uber pool wastes time as the driver has to pick two riders at a go. Besides, the drivers argue that picking two passengers is a hustle. Although Uber GO is cheaper, the amount saved on using the alternative is insignificant. Other uncertainties include financial viability and restricted visibility. Therefore, it is the choice of the rider to select the best ride option.

CRITICAL SELF-REFLECTION

My main focus of Uber pool innovation was the inability of Uber company to come up with a suitable strategy for improving customer satisfaction. Defining the primary cause of failure in the traditional transport industry is the primary motive as many companies concentrate on profits and not customer satisfaction. The reason is that many managers do not utilize the available resources and tools fully. The fun part about this research is that I had the freedom to identify market opportunities, employees, and customers. I needed to understand why, what, where, and how the transport industry acknowledges its past and what its future holds.

In this innovation, my strength is the power to offer solutions, have an impact on people around me, ability to contextualize situations, and create a friendly environment where I can enjoy what I do and thrive in my passion for invention and creation. I hope this invention is the beginning of many experiences, adventures, and innovations. My weaknesses exceed the strengths. I was overcome by the uncontrolled fear of the unknown, lack of personal trust, commitment, and common purpose. To overcome the weaknesses in the future, I will work past my fears, be ready to take risks, and look at every circumstance from several points of view.

References

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