uber case study presentation

Hacking the Case Interview

If you’re interviewing for a business strategy or operations role at Uber, there is a good chance that you’ll receive at least one case interview or case study interview.

To land a job offer at Uber for these roles, you’ll need to nail every single one of your case interviews. While Uber case interviews may seem challenging and daunting, they can be mastered with proper preparation.

If you have an upcoming case interview with Uber, we have you covered. In this comprehensive Uber case interview guide, we’ll cover:

• The seven steps to ace any Uber case interview
• Six Uber case interview tips
• How to ace the Uber written case interview or case study
• Recommended Uber case interview/case study resources

If you’re looking for a step-by-step shortcut to learn case interviews quickly, enroll in our case interview course . These insider strategies from a former Bain interviewer helped 30,000+ land tech and consulting offers while saving hundreds of hours of prep time.

The Seven Steps to Ace any Uber Case Interview

A case interview is a special type of interview that is typically used by consulting firms. However, business strategy and operations groups at companies are increasingly using case interviews in their assessment process since they employ so many former consultants.

Case interviews are 20- to 30-minute exercises in which you are placed in a hypothetical business situation and are asked to find a solution or make a recommendation.

First, you’ll create a framework that shows the approach you would take to solve the case. Then, you’ll collaborate with the interviewer, answering a mix of quantitative and qualitative questions that will give you the information and data needed to develop an answer. Finally, you’ll deliver your recommendation at the end of the case.

Uber case interviews are generally candidate-led. This means that you will be expected to lead the direction of the case. You’ll be responsible for asking the right questions, probing for data, and proposing each next step.

Follow these seven steps to solve any Uber case interview or case study.

1. Understand the case background information

The case interview will start with the interviewer explaining the case background information. Make sure that you are taking notes while the interviewer is speaking. You’ll want to focus specifically on understanding the context, the company, and the objective of the case.

The most important part of the case interview is to make sure you understand the business issue and objective of the case. Addressing the wrong business problem is the quickest way to fail a case interview.

2. Ask clarifying questions

Once the interviewer has finished giving you the case information, you’ll have an opportunity to ask questions. 

While you can ask any question that you want, try to prioritize asking questions that help you better understand the situation and problem. You want to avoid asking questions that are too specific or not relevant to understanding the case situation. 

Most candidates ask between one to three questions. You’ll be able to ask more questions later in the case interview if you need to.

3. Summarize the information and verify the objective

Once you have finished asking your immediate questions, summarize all of the major case information and verify that you understand the objective correctly.

In this step, many candidates make the mistake of stating every fact of the case verbatim. Instead, you should summarize the case concisely and clearly in your own words. This demonstrates that you can synthesize information effectively.

4. Develop a framework

The next step is to structure a framework to help guide you through the case.

A case interview framework is a tool that helps you structure and break down a complex problem into simpler, smaller components. Think of a framework as brainstorming different ideas and organizing them into different categories.

To develop a framework, ask yourself what are the three to four major questions that you need to answer in order to make a confident recommendation?

Many candidates make the mistake of using memorized frameworks and applying them to their case interviews. Interviewers can tell when you are using a memorized framework because not all of the elements of the framework will be relevant to the case.

Using a memorized framework reflects poorly on your capabilities because it shows that you cannot think critically for yourself. Therefore, practice creating unique and tailored frameworks for each case that you get.

For a complete guide on how to create tailored and unique frameworks for each case, check out our article on case interview frameworks .

When creating your framework, it is acceptable to ask the interviewer for a few minutes of silence to collect your thoughts. Afterwards, present your framework to the interviewer.

5. Kick off the case

Once you have finished presenting your framework, the interviewer may agree with your approach or may provide some feedback or suggestions. Afterwards, it is time to start solving the case.

How the case investigation will start depends on whether your case is a candidate-led or interviewer-led case. Most cases are candidate-led.

Candidate-led case : In this type of case, you will be expected to drive the direction of the case. You will be suggesting what areas to explore, what analyses to do, and what the next step should be. So, pick an area of your framework to start analyzing. There is no right or wrong area to pick as long as it is relevant to solving the case.

Interviewer-led case : In this type of case, the interviewer will be leading the direction of the case. They will be asking you specific questions that you will answer. After each question, they’ll direct you to the next question. For interviewer-led cases, the interviewer will typically kick off the case by asking you a question after you finish presenting your framework.

6. Answer quantitative and qualitative questions

The majority of the interview will be spent answering a mix of quantitative and qualitative questions.

Quantitative questions may have you estimate the size of a particular market, perform some calculations to determine profitability, or interpret various charts and graphs.

When solving quantitative problems, make sure that you walk the interviewer through your approach before you begin doing any math. When performing calculations, make sure to talk through your steps out loud so that it is easy for the interviewer to follow your work.

Qualitative questions may ask you to brainstorm potential ideas or ask for your judgment on an open-ended business question. When answering these questions, try to structure your answer as much as possible.

After answering each question, make sure that you take your answer and connect it back to the overall case objective. How does your answer help you solve the case? How does your answer impact your potential recommendation?

7. Deliver a recommendation

At the end of the case, the interviewer will ask you to prepare an overall recommendation. It is acceptable to ask the interviewer for a minute to look through your notes before you give your recommendation.

Based on the quantitative and qualitative questions you have answered, what recommendation do they collectively support?

Structure your recommendation in the following way:  

• State your recommendation
• Provide the two to three reasons that support your recommendation
• Propose next steps that you would take if you had more time

After you deliver your recommendation, the interviewer will conclude the case interview. If the case interview was based on a real life project, the interviewer may explain what actually happened in the case.

Don’t worry if your recommendation does not match what actually happened during the project. For case interviews, you are not assessed on your answer, but on your process.

Six Uber Case Interview Tips

Follow these six tips to make the most of your Uber case interview preparation.

Tip #1: Start preparing early

Mastering case interviews takes time. Many of the skills and techniques needed to solve case interviews can’t be learned in just a day or in a week. Ideally, start preparing for your case interviews at least a month or two in advance to give yourself enough time to learn and practice.

Tip #2: Practice with a case partner

Practicing case interviews with a partner is the best way to simulate a real case interview. There are many aspects of case interviews that you won’t be able to work on if you are doing mock cases by yourself. Casing with a partner lets you practice your communication, presentation, and collaboration skills.

Tip #3: Keep a list of feedback from each case

You should keep a journal or log of all of the different pieces of feedback you get from your case interview partner during practice. This way, you’ll be able to identify trends and prioritize what improvement areas to focus on. For example, if you consistently receive feedback in each practice case that you need to structure your answers, that should be your top area to focus on.

Tip #4: Focus on improving one thing at a time

After doing some practice case interviews, you’ll likely have a long list of feedback and improvement areas. Try to focus on improving one thing at a time. Before each practice case, decide on the one thing that you really want to focus on and nail. This will be much more effective than trying to improve everything at once.

Tip #5: Use a hypothesis-driven approach

During the case interview, you should have a hypothesis of what the answer to the case is. A hypothesis is simply an educated guess based on the knowledge that you have. As you analyze data and gather more information, make sure to be constantly changing and refining your hypothesis.

There are two benefits to using a hypothesis to drive the direction of the case. One, it ensures that you are focusing on relevant areas that will help you solve or answer the case. Two, by the time the interviewer asks you for a recommendation, you will already have a refined hypothesis on what the answer or solution to the case should be.

Tip #6: Be 80/20

You have limited time during a case interview to solve the case. Therefore, you won’t be able to cover all of the different areas in your framework and get answers to every single question that you have. Therefore, focus on the most important issues and use the 80/20 principle.

The 80/20 principle states that 80% of the outcome comes from 20% of your effort. During a case interview, focus on the most important questions or areas that will have the biggest impact or effect on developing your answer or recommendation.

How to Ace the Uber Written Case Interview or Case Study

In addition to traditional case interviews, Uber may also give candidates a written case interview with a presentation component during the final round of interviews. Here’s how the Uber written case interview works:

• In advance of your final round interviews, you’ll be given a packet of information that will help you answer a business question or problem that Uber is facing
• You’ll have roughly a week to read the information, analyze the data, and create presentation slides
• During your interview, you’ll be given roughly 30 minutes to present your slides
• Following your presentation, your interviewers will ask follow-up questions based on your methodology and recommendation.

Follow the steps below to perform well on the Uber written case interview and presentation.

1. Understand the business problem and objective

The first step in completing a written case interview is to understand what the objective is. What is the primary business question you are trying to answer with the data and information provided?

2. Read the list of major questions

Your written case interview should provide you with a list of key questions that you will be expected to address or answer. Read through these questions first since these will be the questions that you will want to prioritize.

3. Skim the materials

Next, flip through the information packet that is provided to see what information is available. Identify what data you have and what data you do not have.

The goal in this step is not to read and analyze everything. That would take too much time. Instead, by seeing what information exists, you will be able to better prioritize what you spend your time reading and analyzing.

4. Create a framework

Before you begin reading and analyzing the information in the slides in more detail, you should create a basic framework to help guide your analysis. The list of key questions will help set the foundation of your framework.

5. Read and analyze the material 

Afterwards, read and analyze the information that is relevant to each area of your framework. As you begin answering questions and drawing insights, make sure to write a one or two sentence summary. This will make it easier to decide on a recommendation later.

6. Decide on a recommendation

Review the list of key takeaways that you have summarized from answering all of the major questions in your framework. Decide on what recommendation these findings collectively support.

Remember that there is typically no right or wrong recommendation. As long as your recommendation is supported by data and evidence, you will be in great shape.

7. Create your slides

Once you have a recommendation, it is time to start creating slides. Write your executive summary first and make sure that it tells a clear and logical story that leads to your ultimate recommendation.

Then, write the headlines for your slides. Make sure the headlines summarize the key point of each slide. If the interviewer were to only read the headlines of your slides, they should be able to understand your entire presentation.

8. Prepare for potential questions

If you have any time remaining, brainstorm potential questions the interviewer may ask you during your presentation. They may want to know how you performed your analysis or how you reached your conclusions.

Preparing for these potential questions will help your presentation go much more smoothly. You will also feel much more confident while presenting.

For more information, check out out our complete guide on written case interviews .

Recommended Uber Case Interview/Case Study Resources

Here are the resources we recommend to learn the most robust, effective case interview strategies in the least time-consuming way:

• Comprehensive Case Interview Course (our #1 recommendation): The only resource you need. Whether you have no business background, rusty math skills, or are short on time, this step-by-step course will transform you into a top 1% caser that lands multiple consulting offers.
• Hacking the Case Interview Book   (available on Amazon): Perfect for beginners that are short on time. Transform yourself from a stressed-out case interview newbie to a confident intermediate in under a week. Some readers finish this book in a day and can already tackle tough cases.
• The Ultimate Case Interview Workbook (available on Amazon): Perfect for intermediates struggling with frameworks, case math, or generating business insights. No need to find a case partner – these drills, practice problems, and full-length cases can all be done by yourself.
• Case Interview Coaching : Personalized, one-on-one coaching with former consulting interviewers
• Behavioral & Fit Interview Course : Be prepared for 98% of behavioral and fit questions in just a few hours. We'll teach you exactly how to draft answers that will impress your interviewer
• Resume Review & Editing : Transform your resume into one that will get you multiple interviews

Land Multiple Tech and Consulting Offers

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Table of Contents

Win the uber product manager case study.

• September 9, 2020

Richard Chen

We recently received an email from a fellow Product Manager job hunter looking for some help navigating a technical assignment from their Uber case study interview. For this blog post, Nkem Nwankwo , Senior Product Manager at Calendly, will show us the best practices of how to navigate a technical case study assignment. You can listen along to the podcast:

This is a real-life example of an Uber case study interview question. You’ll encounter case study questions during on-site interviews, but interviewers may also ask these questions in a second-round phone interview to test your competency quickly.

Technical Case Study Assignment: Uber Example

Let’s dive into our Uber case study example. We will be using a popular case study question asked by Uber in their Product Manager interviews.

Here’s the intro, prompt, and question for the technical case study assignment given by Uber:

Uber Case Study Intro

Uber provides a platform for over 3 million drivers to enjoy on-demand earnings. Some drivers choose to do so 40+ hours a week while others do to augment other income streams. But for all drivers, operating on the Uber platform incurs ongoing operational expenses: gas, food, telecom, car insurance, and more. Further, many of our drivers have limited access – if at all – to essential financial services like chequing and savings accounts.

The Financial Products team endeavors to provide drivers access to core financial services and payment products that improve the quality of their experience on Uber, generate rewards for their activity on Uber and unlock value for their spend off Uber.

Case Study Prompt

You’re the Product Manager of a team that focuses on Financial Products for our drivers. You’re tasked with designing a financial product (or suite of products) that addresses our driver’s needs in Brazil. What questions do you have to understand this opportunity better? What objectives and metrics should we consider for this effort? How would you research and validate the early hypothesis? And finally, which product(s) should we build, and how would you sequence them?

What We’re Looking For:

A fun discussion that explores your thought process that demonstrates your grasp of the economics of a financial product, product and customer intuition, and a curiosity for understanding how to address real needs and challenges our drivers face in Brazil.

Solving the Uber Case Study Assignment

Product Gym: Here’s the task: Make a payment app for Uber drivers in Brazil.

Nkem Nwankwo: The first step is to ask clarifying questions. This is very important. For this assignment , we will ask, is this an app within Uber or a 3rd party?

For example, let’s assume this will be a 3rd party app. We will assume that since it’s a 3rd party, it connects to Uber’s actual app, but is not part of Uber itself; Uber uses their services.

Clarifying Questions to Ask

• Who are the users?
• Who are we building this for?
• Drivers, full-time drivers, part-time drivers, Uber itself, banks/payment processors?

Focus on one user – we’ll focus on one of these users, Uber drivers.

Possible Use Cases

The drivers want to be paid as fast as possible because they’re doing the work. Keep logs of their daily trips to see how much they’ve earned that day, and reimbursements for expenses, such as tolls to dispute fares as well. Drivers need to do their taxes, so Uber could generate a report for them. Also, they can use driving statistics to maximize revenue.

Features that relate to the use cases:

• Get paid fast as possible – direct credit to driver & cash transfer from a financial institution to Uber can happen later.
• Daily Trip Log – automated ledger from activity (driving people around), including details such as day, time, vicinity, an area the driver can add comments to reconcile disputes, etc.
• Taxes – generate a report for tax purposes to file them at the end of the year. We can have a monthly paystub that generates a 1040 and is directly emailed to the driver.
• Driver Statistics – view miles, view revenue they are bringing in to determine if driving is viable, as well to keep them coming back to the application and use it.

Nkem Nwankwo: Now, product management doesn’t stop there – we need to track whether our features will be successful or not. We need to see if we created the right thing or not.

What Metrics to Track

• How often are they coming back and actually using the feature

We can track these across the app to see the usage levels among those features. For example, how fast do people get their money?

That will determine how often people come back to the app or how much incentive Uber has to use this payment app. If drivers have a good experience getting paid quickly, they will use Uber as an app, and the 3rd party payment app will stay on Uber’s platform.

Possible Problems

There could be problems with transferring to/from the bank, which raises friction and could get this 3rd party payment app we are proposing kicked off the platform.

We can track how many complaints there are in general (net promoter score) and how many financial institutions have signed up. Since it’s a B2B2C situation, Uber’s connection to the financial institution is essential for this to be seamless.

The more frictionless the transaction is, the easier it will be for financial institutions to sign up for this.

If you are 3rd party app (backing Uber in this plan and backing their payment processor), you can use synergy to get other apps and contracts.

People will look and say, hey, you made this much from Uber; if you can produce a report that shows you your distribution or split in revenues among all the different apps you use, it would be helpful from a consumer perspective, as more people will use you. An end-user will want to use your payment app because it’s streamlined across apps they do their odd jobs on, giving it a good reputation. Ultimately, this makes it harder for another company to come in.

Product Gym: What is this and what are the tradeoffs?

Nkem Nwankwo: You would backtrack how you’d investigate this area of the app. Who would you get involved? How would you solve the problem and say whether or not you solved it?

You can compare it to others on the market and see what you are improving and how to continue.

Uber Case Study Assignment: The Details

Now that you’ve laid the framework for your answer, you and the interviewer may go back and forth about details and whatever else you may want to discuss with the product.

Product Gym: As this prompt is specific to Brazil, what can you say that might help you?

Nkem Nwankwo: Anything you can acknowledge how this 3rd party app will affect users, stakeholders, who you are building for, and mentioning how these things can change the design of your app is ideal.

Product Gym: If the interview prompt seems pretty vague, what should I do?

Nkem Nwankwo: Always ask clarifying questions, and never feel bad for doing so. Don’t make too many assumptions (as the devil is in the details). You should be comfortable asking clarifying questions when dealing with customers, so you should be comfortable asking them in an interview as well.

Ace Your Next Case Study Interview

Need more advice on how to tackle case study assignments for popular companies like Uber ? Product Gym members have support from coaches and instructors at every stage of the job hunt — including case studies. Schedule a free consultation with our career coaches to see if the membership program is the right fit for you. We’d be happy to answer any questions you still have.

About Nkem Nwankwo

Nkem Nwankwo is a Senior Product Manager at Calendly and the author of the book,  “After School: Is Getting an MBA Really Worth It?” .

Before his current role at Calendly, Nkem held Senior Product Manager and Product Manager roles at BetterCloud and Microsystems. During this time, he also published his book, which was also featured in America’s most prominent MBA blog,  Poets & Quants . He still publishes similar content in his  blog !

Nkem holds a Bachelor’s degree in Computer Science from Georgia Tech and an MBA from the University of Michigan, Ross School of Business. 

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Uber’s Strategy for Global Success

How can Uber adapt its business model to compete in unique global markets?

• Apple Podcasts

As Uber entered unique regional markets around the world – from New York to Shanghai, it has adapted its business model to comply with regulations and compete locally. As the transportation landscape evolves, how can Uber adapt its business model to stay competitive in the long term?

Harvard Business School assistant professor Alexander MacKay describes Uber’s global market strategy and responses by regulators and local competitors in his case, “ Uber: Competing Globally .”

HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.

BRIAN KENNY: The theory of disruptive innovation was first coined by Harvard Business School professor Clayton Christensen in his 1997 book, The Innovator’s Dilemma . The theory explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, and affordability where complication and high cost are the status quo. Think Netflix disrupting the video rental space. Over the years, the term has been applied liberally and not always correctly to other examples, but every so often, an idea comes along that really fits the bill. Enter Uber, the ridesharing behemoth that turned the car service industry on its head. In a few short years after launching in 2010, Uber became the largest car service in the world, as measured in ride count. Last year, Uber drove 6.2 billion riders. Today’s case takes us to London in 2019, where Uber is facing the latest in a long list of challenges from regulators threatening their ability to continue operating in that important market. In this episode of Cold Call , we welcome Alexander MacKay to discuss the case entitled, “Uber: Competing Globally.” I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Presents network.

Alexander MacKay is in the strategy unit at Harvard Business School. His research focuses on matters of competition, including pricing, demand, and market structure. Alex, thanks for joining us on Cold Call today.

ALEX MACKAY: Thank you, Brian. Very happy to be here.

BRIAN KENNY: The idea of Uber seems so simple, but it was revolutionary in so many ways. And Uber has been in the headlines many times for both good and bad reasons in its decade of existence. So we’re going to touch on a lot of those things today. So thanks for sharing the case with us.

ALEX MACKAY: Brian, I’m very happy to. It’s a little funny, we’ve actually started to see the first few students who have never hailed a traditional taxi in our classrooms. So I think increasingly, the contrast between the two is going to be pretty difficult for people to fully understand.

BRIAN KENNY: Let me ask you to start by telling us what your cold call would be when you set up the class here.

ALEX MACKAY: The case starts off with the current legal battle going on in London. And so the first question I just ask to start the classroom is: What’s the end game for Uber in London? What do they look like 10 years from now? In the midst of this ongoing legal battle, there has been back and forth, some give and take from both sides, Transportation for London, and also on the Uber side as well. And there’s actually a recent court case that has allowed Uber to have a little more time to operate. They bought about 18 more months of time, but this has been also brought with additional, stricter scrutiny, and 18 months from now, they’re going to be at it again trying to figure out exactly what rules Uber’s allowed to operate under.

BRIAN KENNY: It seems like 18 months in the lifetime of Uber is like a decade. Everything seems to happen so quickly for this company. That’s a long period of time. What made you decide to write this case? How does it relate to the work that you’re doing in your research?

ALEX MACKAY: A big focus of my research is on competition policy, particularly the realms of antitrust and regulation. And here we have a company, Uber, whose relationship with regulation has been really essential to its strategy from day one. And I think appreciating the effects of regulation and how its impact Uber’s performance in different markets, is really critical for understanding strategy and global strategy broadly.

BRIAN KENNY:  Let’s just talk a little bit about Uber. I think people are familiar with it, but they may not be familiar with just how large they are in this space. And the space that they’ve sort of created has also blown up and expanded in many ways. So how big is Uber? Like what’s the landscape of ridesharing look like and where does Uber sit in that landscape?

ALEX MACKAY: Uber globally is the biggest ridesharing company. In 2018, they had over $10 billion in revenue for both ridesharing and their Uber Eats platform. And you mentioned in the introduction, that they had over 6 billion rides in 2019. That’s greater than 15 million rides every day that’s happening on their platform. So really, just an enormous company.

BRIAN KENNY: So they started back in 2010. It’s been kind of an amazing decade of growth for them. How do you explain that kind of rapid expansion?

ALEX MACKAY: They were financed early on with some angel investors. I think Kalanick’s background really helped there to get some early funding. But one of the critical things that allowed them to expand early into many markets that helped their growth was they’re a relatively asset light company. On the ground, they certainly need sales teams, they need translation work to move into different markets, but because the main asset they were providing in these different markets was software, and drivers were bringing their own cars and riders were bringing their own phones, the key pieces of hardware that you need to operate this market, they really didn’t have to invest a ton of capital. In fact, when they launched in Paris, they launched as sort of a prototype, just to show, “Hey, we can do this in Paris without too much difficulty,” as their first international market. So being able to really scale it across different markets really allowed them to grow. I think by 2015, their market cap was $60 billion, five years after founding, which is just an incredible rate of growth.

BRIAN KENNY: So they’re the biggest car service in the world, but they don’t own any cars. Like what business are they really in, I guess is the question?

ALEX MACKAY: They’re certainly in the business of matching riders to drivers. They’ve been able to do this in a way that doesn’t require them to own cars, just through the use of technology. And so what they’re doing, and this is I think pretty well understood, is that they’re using existing capital, people who have cars that may be going unused, personal cars, and Uber is able to use that and deploy that to give riding services to different customers. Whereas in the traditional taxi model, you could have taxis that you didn’t necessarily own, but you leased them or you rented them, but they had the express purpose of being driven for taxi services. And so it wasn’t using idle capital. You kind of had to create additional capital in order to provide the services.

BRIAN KENNY: So you mentioned Travis Kalanick a little bit earlier, but he was one of the co-founders of the company, and the case goes a little bit into his philosophy of what expansion into new markets should look like. Can you talk a little bit about that?

ALEX MACKAY: Certainly. Yeah. And I think it might even be helpful to talk a bit about his background, which I think provides a little more context before Uber. He dropped out of UCLA to work on his first company, Scour, and that was a peer-to-peer file sharing service, a lot like Napster, and actually predated Napster. And where he was operating was sort of an evolving legal gray area. Eventually, Scour got sued for $250 billion by a collection of entertainment companies and had to file for bankruptcy.

BRIAN KENNY: Wow.

ALEX MACKAY: He followed that up with his next venture, Red Swoosh, and that was software aimed at allowing users to share network bandwidth. So again, it was a little bit ahead of its time, making use of recent advances in technology. Early on though, they got in trouble with the IRS. They weren’t withholding taxes, and there were some other issues with his co-founder, and there was sort of a bad breakup between the two. Despite this, he persevered and ended up selling the company for $23 million in 2007. And after that, his next big thing was Uber. So one thing I just want to point out is that at all three of these companies, he was looking to do something that leveraged new technology to change the world. And by nature, sometimes businesses like that operate in a legal gray area and you have very difficult decisions to make. Some other decisions you have to make are clearly unethical and there’s really no reason to make some of those decisions, like with the taxes and with some other things that came out later on at Uber, but certainly one of the things that any founder who’s looking to change the world with a big new technology company has to deal with, is that often, the legal framework and the regulatory framework around what you’re trying to do isn’t well established.

BRIAN KENNY: Obviously drama seems to follow Travis where he goes. And his expansion strategy was pretty aggressive. It was almost like a warlike mentality in terms of going into a new market. And you could sort of sum it up as saying ask forgiveness. Is that fair?

ALEX MACKAY: Yeah. Yeah. Ask for forgiveness, not permission. I think they were really focused on winning. I think that was sort of their ultimate goal. We describe in the case there’s this policy of principle confrontation, to ignore existing regulations until you receive pushback. And then when you do receive pushback, either from local regulators or existing sort of taxicab drivers, mobilize a response to sort of confront that. During their beta launch in 2010, they received a cease-and-desist letter from the city of San Francisco. And they essentially just ignored this letter. They rebranded, they used to be UberCab, and they just took “Cab” out of their name, so now they’re Uber. And you can see their perspective in their press release in response to this. They say, “UberCab is a first to market cutting edge transportation technology, and it must be recognized that the regulations from both city and state regulatory bodies have not been written with these innovations in mind. As such, we are happy to help educate the regulatory bodies on this new generation of technology and work closely with both agencies to ensure compliance.”

BRIAN KENNY: It’s a little arrogant.

ALEX MACKAY: Yeah, so you can see right there, they’re saying, what we’re operating in is sort of this new technology-based realm and the regulators don’t really understand what’s going on. And so instead of complying with the existing regulations, we’re going to try to push regulations to fit what we’re trying to do.

BRIAN KENNY: The case is pretty epic in terms of it sort of cuts a sweeping arc across the world, looking at the challenges that they faced with each market they entered, and none more interesting I think the New York City, which is obviously an enormous market. Can you talk a little bit about some of the challenges they faced going into New York with the cab industry being as prevalent as it was and is?

ALEX MACKAY: Yeah, absolutely. I mean, I think it’s pretty well known for people who are familiar with New York that there were restrictions on the number of medallions which allowed taxis to operate. So there was a limited number of taxis that could drive around New York City. This restriction had really driven up the value of these medallions to the taxi owners. And if you had the experience of taking taxis in New York City prior to the advent of Uber, what you’d find is that there were some areas where the service was very, very good. Downtown, Midtown Manhattan, you could almost always find a taxi, but there are other parts of the city where it was very difficult at times to find a cab. And when you got in a cab, you weren’t sure that you were always going to be given a fair ride. And so Uber coming in and providing this technology that allowed you to pick up a ride from anywhere and sort of track the route as you’re going on really disrupted this market. Consumers love them. They had a thousand apps signups before they even launched. Kalanick mentioned this in terms of their launch strategy, we have to go here because the consumers really want us here. But immediately, they started getting pushback from the taxicab owners who were threatened by this new mode of transportation. They argued that they should be under the same regulations that the taxis were. And there were a lot of local government officials that were sort of mobilized against Uber as well. De Blasio, the Mayor of New York, wrote opinion articles against Uber, claiming that they were contributing to congestion. There was a lot of concern that maybe they had some safety issues, and the taxi drivers and the owners brought a lawsuit against Uber for evading these regulations. And then later on, and this was the case in many local governments, de Blasio introduced a bill to put additional restrictions on Uber that would make them look a lot more like a traditional taxi operating model, with limited number of licenses and strict requirements for reporting.

BRIAN KENNY: And this is the same scenario that’s going to play out almost with every city that they go into because there is such an established infrastructure for the taxi industry in those places. They have lobbyists. They’re tied into the political networks. In some instances, it was revealed that they’ve been connected with organized crime. So not for the faint of heart, right, trying to expand into some of the biggest cities in the United States.

ALEX MACKAY: Absolutely. Absolutely. And what’s sort of fascinating about the United States is it’s actually a place where a company can engage in this battle over regulation on the ground. And de Blasio writes his opinion article and pushes forward this bill. Uber responds by taking out an ad campaign, over $3 million, opposing these regulations and calling out de Blasio. So again, we sort of have this fascinating example of Uber mobilizing their own lobbyists, their lawyers, but also public advertising to sort of convince the residents of New York City that de Blasio and the regulators that are trying to come down on them are in the wrong.

BRIAN KENNY: Yeah. And at the end of the day, it’s consumers that they’re really making this appeal to, because I guess my question is, are these regulations stifling innovation? And if they are, who pays the ultimate price for that, Uber or the consumer?

ALEX MACKAY: Consumers definitely loved Uber. And I don’t think any of the regulators were trying to stifle innovation. I don’t think they would say that. I think their biggest concern, their primary concern was safety, and a secondary and related concern here was losing regulatory oversight over the transportation sector. So this is a public service that had been fairly tightly regulated for a long time, and there was some concern that what happens when this just becomes almost a free market sector. At the same time, these regulators have the lobbyists from the taxicab industry and other interested parties in their ear trying to convince them that Uber really is like a taxi company and should be regulated, and really emphasizing the safety concerns and other concerns to try to get stricter regulations put on Uber. And part of that may be valid. I think you certainly should be concerned about safety and there are real concerns there, but part of it is simply the strategic game that rivals are going to play between each other. And the taxicab industry sees Uber as a threat. It’s in their best interest to lobby the regulators to come down on Uber.

BRIAN KENNY: And what’s amazing to me is that while all this is playing out, they’re not turning their tails and running. They’re continuing to push forward and expand into other parts of the world. So can you talk a little bit about what it was like trying to go into countries in Latin America, countries in Asia, where the regulations and the regulatory infrastructure is quite different than it is in the US?

ALEX MACKAY: In the case, we have anecdotes, vignettes, one for each continent. And their experience in each continent was actually pretty different. Even within a continent, you’re going to have very different regulatory frameworks for each country. So we sort of pick a few and focus on a few, just to highlight how the experience is very different in different countries. And one thing that’s sort of interesting, in Latin America, we focus on Bogota in Colombia, and what’s sort of interesting there is they launched secretly and they were pretty early on considered to be illegal, but they continue to operate despite the official policy of being illegal in Colombia. And they were able to do that in a way that you may not be able to do it so easily in the United States, just because of the different layers of enforcement and policy considerations that are present in Colombia and not necessarily in the United States. Now, when I talk about the current state of Uber in different countries, this is continually evolving. So they temporarily suspended their operations early in 2020 in Columbia. Now they’re back. This is a continual back and forth game that they’re playing with the regulators in different markets.

BRIAN KENNY: And in a place like Colombia, are they not worried about violence and the potential for violence against their drivers?

ALEX MACKAY: Absolutely. So this is true sort of around the world. I think in certain countries, violence becomes a little bit more of a concern. And what they found in Colombia is they did have more incidents where taxi drivers decided to take things into their own hands and threaten Uber drivers and Uber riders, sometimes with weapons. Another decision Uber had to make that was related to that was whether or not to allow riders to pay in cash. Because in the United States, they’d exclusively used credit cards, but in Latin America and some other countries like India, consumers tended to prefer to use cash to pay, and allowing that sort of opened up this additional risk that Uber didn’t really have a great system in place to protect them from. Because when you go to cash, you’re not able to track every rider quite as easily, and there’s just a bigger chance for fraud or for robbery and that sort of thing popping up.

BRIAN KENNY: Going into Asia was also quite a challenge for them. Can you talk a little bit about some of the challenges they faced, particularly in China?

ALEX MACKAY: They had very different experiences in each country in Asia. China was a unique case that is very fascinating, because when Uber launched there, there were already existing technology-based, you might call them, rideshare companies, that were fairly prominent, Didi and Kuaidi, And these companies later merged to be one company, DiDi, which is huge. It’s on par with Uber in terms of its global presence as a ridesharing company. When Uber launched there, they didn’t fully anticipate all the changes they would have to make to going into a very different environment. In China, besides having established competitors, Google Maps didn’t work, and they sort of relied on that mapping software to do their location services. So they had to completely redo their location services. They also, again, relied on credit cards for payments, and in China, consumers increasingly used apps to do their payments. And this became a little bit of a challenge because the main app that Chinese customers used, they used WeChat and Alipay primarily, they were actually owned by parent companies of the rival ridesharing company. So Uber had to essentially negotiate with its rivals in order to have consumers pay for their ridesharing services. And so here are a few sort of localization issues that you could argue Uber didn’t fully anticipate when they launched. The other thing about competing in China that’s sort of interesting is that Chinese policy regarding competition is very different from policy in the United States and much of Europe. For the most part, there’s not the traditional antitrust view of protecting the consumers first and foremost. That certainly comes into play, but the Chinese government has other objectives, including promoting domestic firms. And so if you think about launching into a company where there’s a large established domestic rival that certainly increases the difficulty of success, because when push comes to shove, the government is likely to come down on the side of your rival, which is the domestic company, and not the foreign entrant.

BRIAN KENNY: Yeah, which is understandable, I guess, to some extent. This sounds exhausting, to be sort of fighting skirmishes on all these fronts in all these different places in the world. How does that affect the morale or tear at the fabric maybe of the culture at a company like Uber, where they’re trying to manage this on a global scale and running into challenges every step of the way?

ALEX MACKAY: It certainly has an effect. I think Uber did a very good job at recruiting teams of people who really wanted to win. And so, if that’s the consistent message you’re sending to your teams, then these challenges may be actually considered somewhat exciting. And so I think by bringing in that sort of person, I think they actually fueled this desire to win in these markets and really kept the momentum going. One of the downsides of this of course is that if you exclusively focus on winning and getting around the existing regulations, there does become this challenge of what’s ethical and what’s not ethical? And in certain business areas, there actually often is a little bit of a gray line. I mean, you can see this outside of ridesharing. It’s a much broader thing to think about, but regulation of pharmaceuticals, regulation of use of new technologies such as drones, often the technology outpaces the regulation by a little bit and there’s this lag in trying to figure out what actually is the right thing to do. I think it’s a fair question whether or not you can disentangle this sort of principle of confrontation that’s so pervasive throughout the company culture when it comes to regulation from this principle confrontation of other ethical issues that are not necessarily business driven, and whether or not it’s easy to maintain that separation. And I think that’s a fair question, certainly worthy for debate. But what I think is important is you can set up a company where you are abiding by ethical issues that are very clear, but you’re still going to face challenges on the legal side when you’re developing a new business in an area with new technology.

BRIAN KENNY: That’s a great insight. I mean, I found myself asking myself as I got through the case, I can’t tell if Uber is the victim or the aggressor in all of this. And I guess the answer is they’re a little bit of both.

ALEX MACKAY: Yeah. I think it’s fair to characterize them as an aggressor, and I think you sort of need to be if you want to succeed and if you want to change the world in a new technology area. In some sense, they’re a victim in that we’re all the victim as consumers and as firms of regulations that are sometimes difficult to adapt in real time to changing market conditions. And there’s a good reason why they are sticky over time, but sometimes that can be very costly. Going back to something we talked about earlier, I think there are hardly any consumers that wanted Uber kicked out of New York City. I think everyone realized this was just so much superior to any other option they had, that they were really willing to fight to keep Uber around in the limited ways they could.

BRIAN KENNY: So let’s go back to the central issue in the case then, which is, how important is it to them, in terms of their global strategy, to have a presence in a place like London? They’re still not profitable by the way, we should point that out, that despite the fact that they are the largest in the space, they haven’t turned the corner to profitability yet. I would imagine London’s kind of important.

ALEX MACKAY: Absolutely. London is a key international city, and a presence there is important for Uber’s overall brand. So many people travel through London, and it’s a real benefit for anyone who travels to be able to use the same service at any city you stop in. At the same time, they’re facing these increasing regulatory pressures from London, and so it’s a real question whether or not, 10 years from now, they look substantially different from the established taxi industry that’s there. And you can kind of see this battle playing out across different markets. As another example, in Ghana. When they entered there, they actually entered with a framework for understanding. They helped build the regulations for ridesharing services in Ghana when they entered. But over time, that evolved to additional restrictions as the existing taxi companies pushed back on them. So I think a key lesson here in all of this is that the regulations that you see at any given point in time aren’t absolutely fixed, for anyone starting a technology-based company, there will be regulations that do get created that affect your business. Stepping outside of transportation, we can see that going on now with the big tech firms and sort of the antitrust investigations they’re are under. And the policymakers in the US and Europe are really trying to evolve the set of regulations to reflect the different businesses that Apple, Facebook, Microsoft, Google are involved in.

BRIAN KENNY: One thing we haven’t touched on, and it’s not touched on in the case obviously because it just sort of started fairly recently, is the pandemic and the implications of the pandemic for the rideshare industry as fewer people find themselves in need of going anywhere. Have you given any thought to that and whether that’s going to have any effect on the regulations?

ALEX MACKAY: It certainly could. Uber is in a somewhat fortunate position, at least if you judge by their market capitalization, with respect to the pandemic. Initially their stocks took a pretty big hit, but rebounded pretty quickly, and part of this is because the primary part of their business is the transportation through Uber X, but they do also offer the delivery services through Uber Eats, and that business has really picked up during this pandemic. There’s certainly a mix of views about the future, but I think most people do believe that at some point we’ll get back to business as usual, at least for Uber services, when we come up with a vaccine. I think most people anticipate that they’ll be resuming use of Uber once it becomes safe to do so. And I think, to be frank, a lot of people already have resumed using Uber, especially people who don’t have cars or who see it as a valuable alternative or a safer alternative to public transit.

BRIAN KENNY: Yeah, that’s a really good point. And the Uber Eats thing is interesting as another example of how it’s important for businesses to re-imagine the business that they’re in because that, in many ways, may be helping them through a really tough patch here. This has been a really interesting conversation, Alex, I want to ask you one final question, which is, as the students are packing up to leave class, what’s the one thing you want them to take away from the case?

ALEX MACKAY: So I would hope the students take away the importance of regulation in business strategy. And I think the case of Uber really highlights that. And if you look at the conversation around Uber I’d say for the first 10 years of their existence, it was essentially around the superiority of their technology and not so much how they handled regulation. If you think back to the cease-and-desist letter that San Francisco issued in 2010, if Uber had simply stopped operations then, we wouldn’t have the ridesharing world that we have today. So their strategy of principle confrontation with respect to regulation was really essential for their future growth. Again, this does raise important ethical considerations as you’re operating in a legal gray area, but it’s certainly an essential part of strategy.

BRIAN KENNY: Alex, thanks so much for joining us on Cold Call today. It’s been great talking to you.

ALEX MACKAY: Thank you so much, Brian.

BRIAN KENNY: If you enjoy Cold Call, you might like other podcasts on the HBR Presents Network. Whether you’re looking for advice on navigating your career, you want the latest thinking in business and management, or you just want to hear what’s on the minds of Harvard Business School professors, the HBR Presents Network has a podcast for you. Find them on Apple podcasts or wherever you listen. I’m your host, Brian Kenny, and you’ve been listening to Cold Call , an official podcast of Harvard Business School on the HBR Presents Network.

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The magic behind Uber’s data-driven success

Uber, the ride-hailing giant, is a household name worldwide. We all recognize it as the platform that connects riders with drivers for hassle-free transportation. But what most people don’t realize is that behind the scenes, Uber is not just a transportation service; it’s a data and analytics powerhouse. Every day, millions of riders use the Uber app, unwittingly contributing to a complex web of data-driven decisions. This blog takes you on a journey into the world of Uber’s analytics and the critical role that Presto, the open source SQL query engine, plays in driving their success.

Uber’s DNA as an analytics company

At its core, Uber’s business model is deceptively simple: connect a customer at point A to their destination at point B. With a few taps on a mobile device, riders request a ride; then, Uber’s algorithms work to match them with the nearest available driver and calculate the optimal price. But the simplicity ends there. Every transaction, every cent matters. A ten-cent difference in each transaction translates to a staggering $657 million annually. Uber’s prowess as a transportation, logistics and analytics company hinges on their ability to leverage data effectively.

The pursuit of hyperscale analytics

The scale of Uber’s analytical endeavor requires careful selection of data platforms with high regard for limitless analytical processing. Consider the magnitude of Uber’s footprint. 1 The company operates in more than 10,000 cities with more than 18 million trips per day. To maintain analytical superiority, Uber keeps 256 petabytes of data in store and processes 35 petabytes of data every day. They support 12,000 monthly active users of analytics running more than 500,000 queries every single day.

To power this mammoth analytical undertaking, Uber chose the open source Presto distributed query engine. Teams at Facebook developed Presto to handle high numbers of concurrent queries on petabytes of data and designed it to scale up to exabytes of data. Presto was able to achieve this level of scalability by completely separating analytical compute from data storage. This allowed them to focus on SQL-based query optimization to the nth degree.

What is Presto?

Presto is an open source distributed SQL query engine for data analytics and the data lakehouse, designed for running interactive analytic queries against datasets of all sizes, from gigabytes to petabytes. It excels in scalability and supports a wide range of analytical use cases. Presto’s cost-based query optimizer, dynamic filtering and extensibility through user-defined functions make it a versatile tool in Uber’s analytics arsenal. To achieve maximum scalability and support a broad range of analytical use cases, Presto separates analytical processing from data storage. When a query is constructed, it passes through a cost-based optimizer, then data is accessed through connectors, cached for performance and analyzed across a series of servers in a cluster. Because of its distributed nature, Presto scales for petabytes and exabytes of data.

The evolution of Presto at Uber

Beginning of a data analytics journey.

Uber began their analytical journey with a traditional analytical database platform at the core of their analytics. However, as their business grew, so did the amount of data they needed to process and the number of insight-driven decisions they needed to make. The cost and constraints of traditional analytics soon reached their limit, forcing Uber to look elsewhere for a solution.

Uber understood that digital superiority required the capture of all their transactional data, not just a sampling. They stood up a file-based data lake alongside their analytical database. While this side-by-side strategy enabled data capture, they quickly discovered that the data lake worked well for long-running queries, but it was not fast enough to support the near-real time engagement necessary to maintain a competitive advantage.

To address their performance needs, Uber chose Presto because of its ability, as a distributed platform, to scale in linear fashion and because of its commitment to ANSI-SQL, the lingua franca of analytical processing. They set up a couple of clusters and began processing queries at a much faster speed than anything they had experienced with Apache Hive, a distributed data warehouse system, on their data lake.

Continued high growth

As the use of Presto continued to grow, Uber joined the Presto Foundation, the neutral governing body behind the Presto open source project, as a founding member alongside Facebook. Their initial contributions were based on their need for growth and scalability. Uber focused on contributing to several key areas within Presto:

Automation: To support growing usage, the Uber team went to work on automating cluster management to make it simple to keep up and running. Automation enabled Uber to grow to their current state with more than 256 petabytes of data, 3,000 nodes and 12 clusters. They also put process automation in place to quickly set up and take down clusters.

Workload Management: Because different kinds of queries have different requirements, Uber made sure that traffic is well-isolated. This enables them to batch queries based on speed or accuracy. They have even created subcategories for a more granular approach to workload management.

Because much of the work done on their data lake is exploratory in nature, many users want to execute untested queries on petabytes of data. Large, untested workloads run the risk of hogging all the resources. In some cases, the queries run out of memory and do not complete.

To address this challenge, Uber created and maintains sample versions of datasets. If they know a certain user is doing exploratory work, they simply route them to the sampled datasets. This way, the queries run much faster. There may be inaccuracy because of sampling, but it allows users to discover new viewpoints within the data. If the exploratory work needs to move on to testing and production, they can plan appropriately.

Security: Uber adapted Presto to take users’ credentials and pass them down to the storage layer, specifying the precise data to which each user has access permissions. As Uber has done with many of its additions to Presto, they contributed their security upgrades back to the open source Presto project.

The technical value of Presto at Uber

Analyzing complex data types with presto.

As a digital native company, Uber continues to expand its use cases for Presto. For traditional analytics, they are bringing data discipline to their use of Presto. They ingest data in snapshots from operational systems. It lands as raw data in HDFS. Next, they build model data sets out of the snapshots, cleanse and deduplicate the data, and prepare it for analysis as Parquet files.

For more complex data types, Uber uses Presto’s complex SQL features and functions, especially when dealing with nested or repeated data, time-series data or data types like maps, arrays, structs and JSON. Presto also applies dynamic filtering that can significantly improve the performance of queries with selective joins by avoiding reading data that would be filtered by join conditions. For example, a parquet file can store data as BLOBS within a column. Uber users can run a Presto query that extracts a JSON file and filters out the data specified by the query. The caveat is that doing this defeats the purpose of the columnar state of a JSON file. It is a quick way to do the analysis, but it does sacrifice some performance.

Extending the analytical capabilities and use cases of Presto

To extend the analytical capabilities of Presto, Uber uses many out-of-the-box functions provided with the open source software. Presto provides a long list of functions, operators, and expressions as part of its open source offering, including standard functions, maps, arrays, mathematical, and statistical functions. In addition, Presto also makes it easy for Uber to define their own functions. For example, tied closely to their digital business, Uber has created their own geospatial functions.

Uber chose Presto for the flexibility it provides with compute separated from data storage. As a result, they continue to expand their use cases to include ETL, data science , data exploration, online analytical processing (OLAP), data lake analytics and federated queries.

Pushing the real-time boundaries of Presto

Uber also upgraded Presto to support real-time queries and to run a single query across data in motion and data at rest. To support very low latency use cases, Uber runs Presto as a microservice on their infrastructure platform and moves transaction data from Kafka into Apache Pinot, a real-time distributed OLAP data store, used to deliver scalable, real-time analytics.

According to the Apache Pinot website, “Pinot is a distributed and scalable OLAP (Online Analytical Processing) datastore, which is designed to answer OLAP queries with low latency. It can ingest data from offline batch data sources (such as Hadoop and flat files) as well as online data sources (such as Kafka). Pinot is designed to scale horizontally, so that it can handle large amounts of data. It also provides features like indexing and caching.”

This combination supports a high volume of low-latency queries. For example, Uber has created a dashboard called Restaurant Manager in which restaurant owners can look at orders in real time as they are coming into their restaurants. Uber has made the Presto query engine connect to real-time databases.

To summarize, here are some of the key differentiators of Presto that have helped Uber:

Speed and Scalability: Presto’s ability to handle massive amounts of data and process queries at lightning speed has accelerated Uber’s analytics capabilities. This speed is essential in a fast-paced industry where real-time decision-making is paramount.

Self-Service Analytics: Presto has democratized data access at Uber, allowing data scientists, analysts and business users to run their queries without relying heavily on engineering teams. This self-service analytics approach has improved agility and decision-making across the organization.

Data Exploration and Innovation: The flexibility of Presto has encouraged data exploration and experimentation at Uber. Data professionals can easily test hypotheses and gain insights from large and diverse datasets, leading to continuous innovation and service improvement.

Operational Efficiency: Presto has played a crucial role in optimizing Uber’s operations. From route optimization to driver allocation, the ability to analyze data quickly and accurately has led to cost savings and improved user experiences.

Federated Data Access: Presto’s support for federated queries has simplified data access across Uber’s various data sources, making it easier to harness insights from multiple data stores, whether on-premises or in the cloud.

Real-Time Analytics: Uber’s integration of Presto with real-time data stores like Apache Pinot has enabled the company to provide real-time analytics to users, enhancing their ability to monitor and respond to changing conditions rapidly.

Community Contribution: Uber’s active participation in the Presto open source community has not only benefited their own use cases but has also contributed to the broader development of Presto as a powerful analytical tool for organizations worldwide.

The power of Presto in Uber’s data-driven journey

Today, Uber relies on Presto to power some impressive metrics. From their latest Presto presentation in August 2023, here’s what they shared:

Uber’s success as a data-driven company is no accident. It’s the result of a deliberate strategy to leverage cutting-edge technologies like Presto to unlock the insights hidden in vast volumes of data. Presto has become an integral part of Uber’s data ecosystem, enabling the company to process petabytes of data, support diverse analytical use cases, and make informed decisions at an unprecedented scale.

Getting started with Presto

If you’re new to Presto and want to check it out, we recommend this Getting Started page where you can try it out.

Alternatively, if you’re ready to get started with Presto in production you can check out IBM watsonx.data , a Presto-based open data lakehouse. Watsonx.data is a fit-for-purpose data store, built on an open lakehouse architecture, supported by querying, governance and open data formats to access and share data.

1 Uber. EMA Technical Case Study, sponsored by Ahana. Enterprise Management Associates (EMA). 2023.

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As a product manager, Rahul uses Lucidchart to translate his product ideas into a tangible and understandable format so he can receive the buy-in he needs to move them forward.

Key benefits

SIZE :  Large (2501+ employees)

Uber is a convenient and inexpensive taxi service. The company developed a ride-sharing mobile application that allows customers to submit a trip request and then routes requests to crowd-sourced taxi drivers.

When traveling via Uber, you likely aren’t contemplating what exactly goes on behind the scenes to successfully get you from point A to point B. Rahul Amin, on the other hand, is nearly always considering this behind-the-scenes action. 

As a product manager for the fintech team at Uber, Rahul is tasked with developing enterprise planning and budgeting solutions for the company. Teams across the globe use these solutions as they plan their headcount and expenses for the upcoming fiscal year. Rahul’s solutions limit the touchpoints necessary within the P&L (financial statement summarizing the revenues, costs and expenses incurred) by automating a majority of the variable cost items and using assumptions to populate budgets and forecasts on a rolling basis.

With Uber’s global user base spanning over 300 cities, having a set of standardized planning tools in place is crucial. The nearly 300 general managers assigned to specific cities and all the departmental managers within Uber’s corporate division use them for financial planning, and another 500 personnel utilize them for general reporting purposes. Rahul has more than a few people depending on him. 

Rolling out the tools to this vast user base is a process that requires involvement from all sides. When coming up with new solutions, Rahul deals with a unique stack of technologies that can be complicated to those who are not immersed in them daily. As a result, explaining his ideas to others can often be difficult; however, he has found that thinking visually can simplify even the most confusing of concepts.  

When Rahul started at Uber, he discovered Lucidchart among the many applications available in the employee portal. As he began using it, he discovered that this diagramming tool maintained a perfect balance between ease of use and robust functionality. It consistently produces the most aesthetically pleasing results of any tool he has tried—something that is very important to Rahul. As such, Lucidchart has become a crucial ally in each of the stages Rahul moves through when working on a new project. 

Generating ideas

At Uber, a project kickoff usually starts with a committee of people from different teams getting together to determine the scope of the project. Once he has an idea of project expectations, Rahul turns to Lucidchart to brainstorm. He diagrams what he is going to do and how he is going to do it. Often, this diagram takes the form of a mind map housing all his different ideas and showing how they connect. 

As an idea further develops, Rahul’s mind maps turn into process flow diagrams showing how data moves throughout a system, including where information is sourced and how it is transmitted to others. Often, he will also diagram the user’s experience with a proposed model. 

Gathering real-time feedback

Once Rahul has finished diagrams, he utilizes Lucidchart’s sharing features so he can gather initial feedback from engineers or other members of his team. Rahul stores all the diagrams for a given project in one folder that the collaborators he adds can easily access. Multiple team members will jump into a single document simultaneously to make revisions, and then Rahul organizes meetings to discuss any changes.

Getting buy-in and approval 

Next comes the most crucial step in the process: getting buy-in and approval from key stakeholders. Although Rahul knows the value of his proposed system and has input from the engineers, none of it matters if direct stakeholders are not satisfied. Lucidchart enables Rahul to simplify a complex idea into layman’s terms so that he can clearly communicate an idea to upper management. What started as a mind map is transformed into a simple diagram that visualizes Rahul’s ideas about the user experience and data flow of a proposed solution. He can export his diagram to a PNG and easily include it in his presentation to senior management.  

For Rahul, it is crucial that his diagrams are clean and polished.

“It’s really important to me that when I’m laying out designs and explaining a process, people aren’t caught up on cosmetic flaws. I like that Lucidchart allows me to properly align and join objects. There’s a lot of flexibility, and I can create a diagram that looks very nice but was still very easy to make. It’s my go-to when I am trying to lay something out."

Passing the baton

Once Rahul gains the approval needed to move forward with a project, it’s time for the engineers and UX teams to work their magic. Rahul needs to make sure all involved teams are aligned and have a shared understanding of the solution. 

Diagrams are shared or stored in Confluence or JIRA alongside other necessary documentation for easy access. Sometimes Rahul will even create a simple mockup in Lucidchart to accompany a process flow that designers can then use in design.

Rahul’s diagrams create a holistic system-wide view that spans functional silos and helps to create seamless transitions and handoffs until the project’s completion. 

Lucidchart enables Rahul to translate his brilliant ideas into a tangible and understandable format so he can receive the buy-in he needs to move them forward. In doing so, Rahul says Lucidchart has saved him an enormous amount of time. In fact, he says,

“I prefer using Lucidchart over other products. It doesn’t actually matter how much time it saves compared to other tools because I won’t even turn to those due to the differences in output.”

Lucidchart provides both the flexibility, customization, and ease of use that puts out a consistent, visually-pleasing result.

Lucidchart consistently produces the right results so Rahul can share his vision and push forward innovative solutions—solutions that get you from point A to B without having to worry about how Uber does it.

Additional resources

• DocuSign Case Study
• Lucidchart for Product Management

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Questions to expect in the Uber interview process

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Plus, tips and insights from our ex-Uber Coaches

Is what you’re doing legal?

Are you spending within reason?

Could what you’re doing be twisted in the press?

These are the 3 questions – rules –  that Uber employees must keep in mind on a regular basis.

And here’s why: Uber is the epitome of a company that has been “disruptive”. The process of innovating the transportation industry has required bravery and resilience to go against a political and corrupt taxi industry, leading to court cases, protests, damaged Uber cars which required repairing, and other challenges.

But in the process of facing these challenges, Uber has transformed the way we view transportation to be more effective for the end user, has created job opportunities for drivers, and supported countless businesses with revenue generating opportunities through UberEats.

So if you’re thinking of applying for a job at Uber, know this: they’re looking for someone whose drive to shape the world carries them through potential polarizing challenges – challenges that could be more dire than what you’d face at other tech firms, but that serve a purpose to help people.

We sat down with two of our ex-Uber Carrus Coaches to learn more about their experiences and the interview process. Read on for insights!

1. The Interview Process

The interview process as described by ex-Uber coach Kelly (including how many interviews and the length of the hiring process) can vary role to role, but in general you can expect to have:

• a phone interview
• an online exercise that tests your analytical capabilities
• a team phone screen for a shallow dive on analytics, behavior and culture fit
• An onsite 3-part interview which can include presentations (known as “jam sessions”, especially if you’re applying to be a Product Manager) according to a prompt, an analytics/strategy deep dive, and culture fit deep dive

2. The 3 Kinds of Questions You’ll be Asked

Uber will be testing you on three categories of questions: analytics , behavioral competencies, and hypothetical case studies. Here is an overview of each to help you prepare:

The Analytical Question

Uber is a data-driven company. The analytics exercise is a test to see how you can interpret, manipulate or analyze data.

Every role is expected to be able to handle data, and to lead problem-solving ideas with data at the forefront. The data points can be things like how many bookings were made on a Friday night, how many cancellations they had, etc.

You’ll be asked literal math questions such as finding the percentage of cancellations to requests, and there are exact answers to each question. You’ll also be asked what problems you see with the data and opportunities to leverage.

“If you don’t have the analytic skills, [this test] might weed you out. If working at Uber is important to you, prepare your analytical skills so you don’t fail this part of the interview.” says Kelly.

Analytics Question Samples:

• We’re experiencing a spike in cancellation rates Monday mornings globally. What’s one thing you can actually do or feel comfortable doing that might make a difference? Demonstrate experimentation.
• What analysis would you use to understand if we should increase the price of an UberEats delivery?
• What metrics would you use to determine the success of a new app feature?

Here’s a real-world example of a situation they had at Uber that requires data analysis:

“One day, we noticed that there was a higher cancellation rate on Friday and Saturday nights. We called customers and found out that people were cancelling because they were in large groups and wanted to ride in a car together, but they couldn’t fit into a sedan. So, in one weekend, we created UberXL with a view for all vans with 6 occupancy and changed pricing. This led to a benefit for drivers and riders were able to all ride in the same car while saving money. It was a win win win.” shares Kelly.

The Behavioral Question

Behavioral questions are aimed to assess how you act in a situation. They can be measuring anything from how you think to how you communicate to your problem-solving skills. The key to answering this question is to provide a story from your life that illustrates your answer.

Behavior Question Samples:

• Tell me about the proudest moment in your professional career why it was meaningful to you.
• Give me an example of a time you made a decision that was unpopular and explain how you handled implementing it.
• Tell me about a time you had to stand up for your beliefs.

Keep in mind that Uber has a business model that serves people on different ends of the business spectrum, like drivers and riders or in the case of Uber Eats, customers, restaurants and couriers. So when you’re preparing your answers, think about how your stories show measurable results that have a positive impact on all involved.

“Rework your story to be more people centric and tie it back to the numbers. Combine data and people. How is it measured? Show your impact through innovation. How did you make the scenario good for everyone?” Kelly recommends.

Here are 35 behavioral interview questions to prepare for (with example answers).

The Hypothetical Case Study Question:

Hypothetical case study questions are essentially brain teaser questions such as, “How many tennis balls fit into a bus?” Hiring managers are not looking for you to provide an exact answer; rather, they are looking to measure your ability to solve problems and the process and steps you take to do so.

Here is a great list of brain teaser question themes to get you acquainted – have fun with them!

Interviewing for Tech Roles

There will also be additional interviews for tech roles:

“If you’re applying for a role in some of the tech departments, you will traditionally have a panel of interviews, a bar raiser and a hiring manager interview. Of course, Uber is a free-thinking company, so the dependencies [on how many interviews there will be] might come from the seniority level of the candidate.” says Maggie, a former Uber tech recruiter and Carrus coach.

Mark weighs in on his experience during the interview process:

“[Uber] scheduled the phone screen quickly. It turned out to be a technical phone interview. I was asked 2 coding questions and they were not super difficult as it’s only a phone screen. I won’t disclose the question, but you can expect something like string manipulation.

I was informed to have the on-site interviews just a couple of hours after the phone screen, which really surprised me (as most companies won’t react that fast). The on-site interviews were roughly 4-5 hours long with 4 technical interviews. You can expect the same type of questions asked by Google/Facebook and I think the difficulty is also the same. One big difference is that someone would ask you to code on a laptop and make the code works! So you’d better be comfortable to write non-pseudo code and be familiar with syntax and API lookups.”

3. The key characteristics that Uber is looking for in a candidate

Any tech company you apply for is going to care about your problem solving skills and passion for innovation. So what sets Uber apart?

There are two particular qualities that Uber is looking for: a person with a strong ability to use analytics in problem solving, and a person who recognizes that the work is about more than fulfilling a career for yourself; it’s about serving the people involved.

Carrus Coach Kelly weighs in:

“I was on the drivers [versus the riders] side of Uber. One of the most fulfilling experiences was being able to give drivers an opportunity to make an income. Every Monday we’d process payments and if we were late, people wouldn’t be able to feed their families because they were living paycheck to paycheck. It makes you realize that you’re not doing the work for yourself, or for Uber, but for the people who you know personally. It’s not just about you and your career, but about changing the world for the better.

“We also had a program for drivers who are deaf or hard of hearing. We created a system where [the app] tells the rider that the driver is deaf or hard of hearing and there is also a sign on the headrest. We created events to onboard these drivers. It was really rewarding work being able to give someone who isn’t independent access to a way to money and fulfillment.”

At the end of the day, when you’re applying to Uber you’ll need to show that you can fit the company culture of being people-focused, passionate to make a difference, brave, and resilient.

Ready to apply for an opportunity to make a difference at Uber? Book a session with former Uber Project Manager Kelly , or former Uber tech recruiter Maggie to get prepared!

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Uber Case Study: from Startup to Global Mission

by Bharat Arora · Updated on October 9, 2023

TABEL OF CONTENTS

• Introduction

From Humble Beginnings to Global Domination

• The Disruptive Wave: Challenges for Traditional Industries

Business model

Understanding the business, sharing economy business model, uber vs. regular taxi: how passengers meet drivers, introduction for uber case study:.

In 2009 a revolutionary idea was born on the streets of San Francisco.

An idea that will redefine urban mobility and challenge the non-functionality of traditional transportation.

This was the beginning of Uber, a startup that would soon become a popular name across the world.

But how did a simple app achieve such huge success in a relatively short period of time?

And what were the subsequent effects of its unique approach on established industries?

Let’s dive in deeper about the Uber Case Study.    

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When Travis Kalanick and Garrett Camp first started with Uber, it was out of a personal need: finding a reliable ride in the city.

Little did they know, this seed of an idea would sprout into a tech giant, now valued at billions.

In its early days, Uber was a luxury service, offering rides in high-end vehicles. But as the company grew, it adapted, monetized, and expanded its services while meeting the needs of a broader audience. UberX, UberPOOL and Uber EATS are just a few examples of how the company continues to innovate to meet the diverse needs of its users.

Unique business ideas: Challenges for Traditional Industries

As Uber began to gain success, it wasn’t just the transportation industry that felt losing customers due to the competition.

Traditional business models across various sectors were suddenly under trouble, being compared to this new, agile approach that Uber represented.

The company didn’t just offer rides; it offered convenience, efficiency, and a user-centric experience, all come in a mobile app that is available on the Google Play Store and Apple Store .

But innovation comes with its unique challenges. Taxi unions, regulators, and even some users were skeptical and, at times, openly hostile to the changes Uber brought.

Cities like London, Paris, and New York saw massive protests, with taxi drivers voicing their concerns about this new player in the market

However, what truly sets Uber apart was its ability to leverage technology and data, continuously refining its services based on customer feedback and behavior.

What is Uber’s business model?   Is it sustainable?

Uber operates under a platform-based business model, often referred to as the “sharing economy” or “peer-to-peer” model.

Here’s a breakdown:

• Platform-based model: Uber acts as an intermediary between drivers (service providers) and passengers (customers). who doesn’t own a vehicle; instead, it partners with drivers who use their own cars.
• Flexible pricing: Uber uses an algorithmic pricing model in which fares can change based on real-time supply and demand. This  often happens during peak hours or during unfavorable weather conditions, known as “surge price.”
• Cashless transactions: Payment is made through the app using a credit card and debit card, making the process seamless for  drivers and passengers.
• Feedback and Rating system: After each trip, drivers and riders will rate each other. This ensures a level of quality control and trust within the platform.
• Diverse services: Uber has diversified its services over the years.From luxury rides (Uber Black) to economical options (UberX) to carpooling (UberPOOL), it meets a variety of customer needs. In addition, it also expanded into other areas such as food delivery using UberEats.
• Global presence: Uber operates in many cities and countries around the world, adapting to local regulations and market conditions.

Is it sustainable? 

The sustainability of Uber’s business model has been a topic of debate for many reasons:

• Regulatory challenges: Uber has faced regulatory hurdles in many cities and countries. Traditional taxi services have protested against Uber, leading to bans or restrictions in certain areas.
• Financial concerns: As of my last update in January 2022, Uber has yet to achieve consistent profitability. Although revenue is significant, the company still spends heavily on promotions, driver incentives and expansion efforts.
• Reputation management: Uber has faced criticism and negative publicity on many fronts, from safety concerns to corporate culture issues. Addressing these concerns is critical for its long-term sustainability.
• Competition: In many markets, local competitors (such as Ola in India, Didi in China, and Lyft in the United States) are challenging Uber. These competitors often have a better understanding of local market and can offer stiff competition.
• Relationship with the driver: Classifying Uber drivers as independent contractors rather than employees has been controversial. Drivers’ desire for better pay and benefits has led to legal battles in some areas.
• Diversification: On the positive side, Uber’s diversification into areas such as food delivery (UberEats) and freight (Uber Freight) could provide additional revenue streams and enhance the company’s sustainability.

A unique Business model with sharing economic approach – The term “unique” in the business context refers to innovations that significantly change industries and markets, often displacing long-standing, market-leading companies, products, and alliances.

Uber’s business model proves this definition. Instead of following a traditional asset ownership model  (like a taxi or fleet), Uber relies on a “sharing economy” approach.

• Sharing economy:  At its core, the sharing economy is a social-economic system built around  sharing resources. This is usually a platform that makes it easy for you to borrow or rent assets owned by others.  In Uber’s case, that means connecting drivers willing to share their personal vehicles with passengers looking for a ride.
• Asset-Light model: One of the main advantages of this approach is that Uber does not incur the costs and liabilities associated with owning a fleet of vehicles. Instead, it focuses on maintaining and improving the platform that connects drivers and riders.
• Win-win scenario:  Drivers have the opportunity to work on their terms and earn money using the asset they already own (their car), while riders benefit from convenient and more affordable transportation option.

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A click from the nearest available car

The easy to use and immediate services of Uber are unbelievable in comparison with the traditional taxi industry

With the Uber app:

• Instant access: Users can hail a ride with just a few taps on their smartphone. The application interface displays the number of available vehicles in real time, helping users know the distance of the nearest driver.
• Transparent prices:  Before confirming a ride, users get an estimated fare, ensuring there are no surprises at the end of the trip.
• Real-time tracking:  Once a ride is booked, users can track the driver’s progress to their location and get an estimated time of arrival.
• Cashless transactions: The entire payment process is managed in the app, eliminating the need for cash and making the end of the ride smooth and hassle-free.

Serves All Age Groups and backgrounds

Uber’s appearance is not limited to a specific demographic. Its user-friendly design and diverse services offering target a wide range of audiences:

• For young and tech-savvy people: The convenience of booking a ride via a smartphone app attracts the younger generation,who are used to digital solutions based on their needs.
• For the elder: Even for those who aren’t tech-savvy, Uber makes an effort to make its platform accessible. Features like the ability to book a ride for someone else or the ability to hail a ride without an app in certain areas are aimed at older users.
• Diverse Service Range:  Whether it’s a luxury car service (Uber Black), a economical ride (UberX), or a carpooling option (UberPOOL), there’s something for everyone, regardless of  budget or preference. what they like.
• Wide range of services: Uber has also taken steps to ensure its service is inclusive. Features like Uber WAV (wheelchair accessible vehicle) and efforts to provide services to undeserved areas demonstrate their commitment to meeting all walks of life and needs.

Provides Financial and Economic Value

The sharing economy’s primary allure lies in its ability to unlock significant financial and economic value:

• Optimized Resource Utilization : Traditional business models often involve underutilized assets. For instance, a car might sit idle in a driveway for hours or a room might remain vacant in a house. The sharing economy taps into this dormant value, allowing individuals to monetize these underused assets by renting or sharing them.
• Cost Savings for Consumers : By bypassing traditional middlemen and infrastructure costs, services in the sharing economy often provide more competitive pricing. For example, staying in an Airbnb can be cheaper than a hotel, and using platforms like Task Rabbit can offer affordable services compared to established businesses.
• Economic Stimulus : The sharing economy injects money into local economies. Hosts, drivers, or service providers earn directly from their assets or skills, often supplementing their primary income sources.

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Attracts Investors

The potential and rapid growth of the sharing economy have not gone unnoticed by the investment community:

• High Valuations : Companies operating within the sharing economy, like Airbnb, Uber, and We Work, have achieved multi-billion dollar valuations in relatively short time frames.
• Venture Capital Influx : The innovative nature and scalability of sharing economy platforms have attracted significant venture capital. Investors see the potential for high returns, especially if these platforms can achieve dominant positions in their respective markets.
• Future Potential : As technology continues to evolve and more sectors become ripe for disruption, investors anticipate that the sharing economy model will permeate even more industries, offering further investment opportunities.

Fast Growing Industry

The sharing economy’s growth trajectory has been nothing short of meteoric:

• Rapid Adoption : The convenience, cost-effectiveness, and user-centric design of sharing economy platforms have led to swift adoption rates among consumers. Many people now prefer to hail a ride on Uber or rent a vacation home on Airbnb rather than use traditional services.
• Global Expansion : While the sharing economy began primarily in Western countries, its reach has quickly expanded globally. Markets in Asia, Africa, and South America are experiencing surges in sharing economy platforms tailored to local needs.
• Diverse Sectors : Initially, the sharing economy was most prominent in sectors like transportation and accommodation. However, its principles are now being applied to diverse areas, including finance (peer-to-peer lending), fashion (clothing rentals), and even agriculture (equipment sharing).

Uber’s Financial Value and Revenue:

• 2014: Uber reported a net revenue of $400 million.
• 2015: Uber’s net revenue surged significantly, reaching approximately $2 billion.
• 2016: The company’s growth trajectory continued with a net revenue of around $6.5 billion.
• 2017: Uber’s net revenue reached $7.5 billion, marking a steady increase.
• 2018: The revenue figures for this year stood at approximately $11.3 billion.
• 2019: Uber reported a net revenue of around $14.1 billion.
• 2020: Despite the challenges posed by the COVID-19 pandemic, Uber managed a net revenue of about $11.1 billion.
• 2021: The company’s net revenue rebounded to approximately $15 billion.
• 2022: As of the latest data, Uber’s net revenue is projected to be around $16.5 billion.

Uber Driver Earnings:

• 2014: Drivers could earn up to $20 per hour.
• 2015-2016: The earnings for drivers remained relatively stable, with many reporting earnings in the range of $18 to $25 per hour, depending on the city and demand.
• 2017: Some reports suggested that driver earnings slightly decreased to an average of $17 to $23 per hour.
• 2018: With more drivers joining the platform and increased competition, the average hourly earnings hovered around $16 to $22.
• 2019: Driver earnings saw a slight uptick, with many earning between $17 to $24 per hour.
• 2020: The pandemic impacted driver earnings due to reduced demand, with many drivers reporting earnings of $15 to $20 per hour.
• 2021: As the demand for ride share services began to recover, driver earnings ranged from $18 to $25 per hour.
• 2022: The latest data suggests that drivers can earn anywhere from $19 to $26 per hour, depending on factors like location, time of day, and promotions.

It’s essential to note that these figures are approximate averages and can vary based on several factors, including location, demand, promotions, and individual driver performance.

Attracts Investors:Since its founding,Uber has attracted investors and significant attention from the venture capital community.

Its innovative approach to transportation and  rapid growth have made it a top candidate for investment.

• Valuation:Uber’s value has skyrocketed over the years. In 2015, it was valued by investors at a staggering $51 billion, making it one of the most valuable startups in the world at the time.
• High-Profile Investments:Several leading companies soon realized Uber’s potential and decided to invest.These include:

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Menlo Ventures:An early-stage venture capital firm that has backed several successful technology companies.

Google Ventures (GV): AlphabetInc’s venture capital arm.  (Google’s parent company) has invested in Uber, strengthening its position in the technology industry.

Fidelity:A multinational financial services company saw the potential benefits of Uber’s growth.

BlackRock:Another major global investment management firm has backed Uber.

Fast-Growing Industry:Uber’s impact on the transportation industry is undeniable. Its growth metrics reflect the success and  demand for its services.

Daily Trips: According to the latest data, Uber makes an average of 25 million trips per day. This number shows the  scale of the company’s operations and the level of trust users have in the company’s services.

Total Trips:Since its founding in 2010, Uber has facilitated  42 billion trips worldwide. This number not only highlights the company’s growth but also its global reach and acceptance.

It’s important to note that while these numbers provide insight into Uber’s growth and investor interest, the company’s journey has been filled with challenges, controversies, and competition.

However, its ability to attract investors and its rapid growth in the industry have highlighted its importance in the sharing economy and the transportation sector more generally.

  Type of services from uber

Uber black:.

• Description: Uber Black is the company’s original luxury service. It offers riders  a more premium experience than standard services.

Vehicle Type: High-end black luxury sedans often come from brands such as Mercedes-Benz, BMW or Audi.

Registration & Insurance: All Uber Black vehicles are commercially registered and insured, ensuring a higher level of safety and professionalism.

Driver Requirements: Uber Black drivers typically have professional driving experience and are expected to provide a higher level of service.    

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• Description:The Uber SUV is similar to the Uber Black but offers a larger vehicle for those who need more space.

Vehicle Type: High-end black luxury SUVs like Cadillac Escalades or Lincoln Navigators.

Registration & Insurance: Like Uber Black, all vehicles are commercially registered and insured.

Capacity: Designed to accommodate larger groups or passengers with more luggage.

• Description: UberX is Uber’s  most popular and standard service, providing affordable rides for everyday use.

Vehicle Type:Typical everyday cars, which can range from a Toyota Prius to a Honda Accord. Model year requirements varies by city, but  generally it’s a 2000  or newer model (in some cities, 2005 or newer).

Driver Requirements Drivers must have a clean driving record and pass a background check.

Vehicle Requirements: Specific car brands and models are accepted, and vehicles must be in good condition.

• Description: Uber XL is designed for larger groups, offering vehicles with more seating capacity than UberX.

Vehicle Type: Larger vehicles like minivans or SUVs.

Capacity: Can comfortably fit 6 passengers or more.

Pricing: While it’s priced higher than UberX due to the larger vehicle size, it’s still more affordable than the luxury options.    

Uber Select:

• Description: Uber Select is a mid-tier luxury service, offering high-end cars without the premium price of Uber Black.

Vehicle Type: Luxury sedans and SUVs, but not as high-end as Uber Black or SUV.

Availability: Only available in select cities.

Pricing: Positioned between UberX and Uber Black in terms of pricing.

• Description: Uber Pool is a carpooling service, allowing passengers to share rides with others heading in the same direction.

Shared Rides: Passengers share the vehicle with others, making stops along the way to pick up and drop off.

Pricing: It’s cheaper than UberX since the cost is split among multiple passengers.

Availability: Only available in select cities and often in high-demand areas.

It’s important to note that the availability and specifics of these services can vary based on the region and local regulations. Always refer to Uber’s official website or app for the most up-to-date information for a specific location.

• Digital Convenience:  With Uber, the entire process is digitized. Customers use the Uber app to request a ride. Once the ride is confirmed, they can track the driver’s location in real time and know the estimated arrival time.
• Feedback system:  After the ride, customers can rate the driver, providing a feedback loop that helps ensure service quality.

Regular Taxi:

• Traditional Hailing:  Traditionally, customers hail a taxi on the street by waving or hailing an available taxi.
• Book in advance by phone:  They can also contact the taxi company in advance, who will then send the driver to the designated location. This method often requires waiting and lacks Uber’s real-time tracking feature.

Driver Options

Flexibility: Drivers use their own car, eliminating the need for a dedicated taxi license in many areas. This has democratized access to the ride-sharing economy, allowing more people to make money without large initial investments.

Regular Taxi: License: Traditional taxi drivers often require a specific taxi license to operate. It can be theirs, or they can rent one.

Dispatch service:  Many taxi drivers pay a monthly fee to a dispatch service, which provides them with booking services.  Some drivers also rent both the car and the license, which increases their overall costs.

Financially Interested Parties

Simplify stakeholders:  The main stakeholders are Uber itself (which receives a commission on each trip), the drivers, and the investors who funded Uber’s operations and growth.

Complex ecosystem: The traditional taxi model has involves many stakeholders, including  licensing agencies that manage and issue taxi licenses,  taxi companies that might own and operate fleets, individual drivers, and taxi license holders who might lease their licenses to other drivers.

The impact of the Uber model on the typical taxi industry and its key partners.

• Passengers benefit from greater reliability and convenience: With Uber, passengers have witnessed a paradigm shift in the way they hail and use transportation services. The Uber app offers real-time tracking, estimated arrival times, and transparent pricing. Passengers no longer have to stand on street corners waiting for a taxi to pass.  Instead, you’re just a few clicks away from a reliable ride, often with shorter wait times than traditional taxis.
• Drivers have higher income by Moving to Uber: Many drivers have reported higher incomes after leaving traditional taxi services for Uber. The flexibility to choose their own schedule, coupled with flexible pricing during periods of high demand, allows them to maximize their revenue.  Additionally, paying directly through the app eliminates the risk of unpaid tickets.
• Taxi companies are losing revenue:  Traditional taxi companies have faced a significant decline in revenue  due to the rise of ride-sharing platforms such as Uber. The convenience and often lower prices offered by Uber have caused many drivers to  switch, leaving taxi companies with fewer customers and reduced revenue.
• Loss of license validity: In many cities, taxi licenses (often called “medallions”) were once very valuable, sometimes costing hundreds of thousands of dollars. However, with the advent of Uber and other ride-sharing platforms,  demand for these licenses has decreased, causing their value to drop significantly.
• Licensing agency loses sales revenue due to reduced license value: As the value of taxi licenses declines, licensing authorities face a decline in revenue from selling and renewing these licenses. With fewer individuals and businesses interested in purchasing taxi licenses, these authorities have seen  their revenue sources streams.

Management: How does Uber manage Two sides of its market?

Two-way market:

Uber operates in a two-sided market, connecting drivers (supply side) and riders (demand side).

Managing this balance is crucial. Too many drivers and not enough riders can lead to driver dissatisfaction, while too many riders and not enough drivers can lead to long wait times and unhappy customers. Uber uses surge pricing  to manage this balance, raising prices at times of high demand to attract more drivers and vice versa.

Two groups of agents  interact through a “platform”, where one group’s benefit from joining the platform depends on the size of the other group joining the platform.  -Armstrong M. Regulatory approach

What do you think about Uber’s soft approach to regulation?

Uber’s business model has unique characteristics that make it difficult to classify the company into a specific industry.

Technology is at the heart of the network,delivering an unprecedented breakthrough model.

Uber has faced  criticism and backlash from taxi corporations, but has received praise and support from  customers.

By exploiting their position as a disruptive innovator, they have placed themselves in a position to influence the public.

In 2014, Uber hired David Plouffe to lead the company’s communications and public policy department.

Regulatory approach:

What’s the verdict on Uber’s cowardly approach?

Uber’s entry into the transportation market is nothing short of a revolution. But  innovation often comes with controversy, especially when it challenges established standards and regulations.

• Unique Business model:  Uber’s business model has blurred the lines between traditional taxi services and technology platforms. By positioning itself as a technology company that connects riders with drivers rather than a transportation service provider, Uber is operating in a regulatory gray area.  This has made it difficult for regulators to classify and manage companies within existing frameworks.
• Disruption at Its Core:At the heart of Uber’s model is technology.  By leveraging smartphones, GPS, and data analytics, Uber has introduced an unprecedented disruptive model to the transportation industry. This technological approach not only brings convenience to users but also poses significant challenges to traditional taxi services and regulators.
• Mixture of reactions: Although Uber has faced  criticism and backlash from taxi groups and some regulators, it has been praised by  users. The convenience, transparency, and generally lower costs associated with this platform have made it a favorite among runners.  This response dichotomy highlights the tension between innovation and regulation.
•  Exploiting the position of disruptive innovators:  Uber’s strategy isn’t just about providing rides. By positioning itself as a disruptive innovator, the company has achieved significant public influence. This influence often helps shape public opinion and, in some cases, even management decisions.
• Recruitment strategy in 2024: In an effort to strengthen its position and navigate the complex regulatory landscape, Uber hired David Plouffe in 2014 to lead the company’s public policy and communications department. Plouffe, with his political acumen,is seen as a strategic addition to Uber’s team, helping the company interact more effectively with regulators and stakeholders.

Safety Concerns and Challenges:

• Incidents related to False documents:  One of the biggest concerns that has emerged over the years has been incidents involving Uber drivers using false documents. There have been cases of drivers successfully passing Uber’s background checks using false or borrowed documents. Such incidents not only raise questions about the platform’s verification process but also pose potential risks for riders.
• Uber’s proactive response to security concerns: Uber quickly recognized its security concerns and took a number of steps to address them. The company has continuously developed its background check procedures, cooperated with law enforcement, and invested in driver safety training.  Uber’s commitment to safety is evident through its efforts to improve safety procedures and respond to feedback from passengers and drivers.
• Advanced security features: Uber has introduced several safety features to keep rider and drivers safe:
• Real-time identity check:  Periodic prompts driver to take a real-time selfie before accepting a ride, ensuring that the driver is using the app that is appropriate for the account holder.
• Driver profile:  Riders can view detailed profiles of their drivers, including ratings, compliments and number of trips taken.  This transparency allows riders to know more about the person driving them.
• Two-factor authentication:  To prevent unauthorized access, Uber has implemented two-factor authentication for its drivers. This additional layer of security ensures that only registered drivers can access the app.

The future of Ride sharing

The world of transportation is changing rapidly, and ride-sharing services, led by Uber, at the forefront of this transformation.

Traditional transportation methods are being challenged as consumers seek more convenient alternatives.

In 2019, the mobility market saw significant advancements, including record electric vehicle sales  records and regulations promoting shared mobility.

Global automakers have faced challenges such as stricter emissions regulations and trade tensions. Uber’s journey offers a insights into the future of ride-sharing.

Adapting to regulations, technology and consumer preferences will be essential.  By 2030, there is a huge opportunity for ride-sharing platforms, with highly connected vehicles worth between $450 billion and $750 billion.

Uber’s journey resembles disruptions in other industries, such as digital streaming vs. cable TV and online marketplaces vs brick-and-mortar stores.

Survival depends on the ability to adapt.

Uber identified gaps in the taxi model, used technology to fill them, and expanded rapidly.

This success demonstrates the power of innovation.

In short, the future of ride-sharing services led by Uber looks promising. As technology evolves and consumer preferences change, flexibility and adaptability will be critical.

Traditional industries may view these changes as threats or opportunities; the choice is theirs.    

Uber’s journey is a testament to innovation and adaptability in today’s rapidly evolving digital world.

Despite legal battles & internal problems, Uber has thrived, expanding to 737 cities in 84 countries, and providing more than 5 billion rides.

This shows his resilience. In the era of digital transformation, businesses must innovate to avoid obsolescence.

Uber has leveraged technology to disrupt the taxi industry, focusing on user-friendly applications and customer convenience.

However, achieving profitability remains a challenging. This emphasizes the need for adaptability.

In short, Uber’s journey highlights the importance of resilience, innovation, and adaptability.

At Protocloud Technologies , we provide website and mobile application development services.

We can help entrepreneurs and small business owners create a ride-sharing app like Uber, allowing them to successfully navigate a growing market.

Global Ride-sharing Trends

Passenger experience with uber, peer-to-peer business model, ride-sharing app development, ride-sharing future trends, ride-sharing revolution, sharing economy, two-sided market strategy, uber business model, uber financial growth, uber vs traditional taxi, uber's global impact, uber's regulatory challenges, bharat arora.

I'm Bharat Arora, the CEO and Co-founder of Protocloud Technologies, an IT Consulting Company. I have a strong interest in the latest trends and technologies emerging across various domains. As an entrepreneur in the IT sector, it's my responsibility to equip my audience with insights into the latest market trends.

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8.9 Case in Point: Uber Pays the Price

Case in point: uber pays the price.

Uber revolutionized the taxi industry and the way people commute. With the simple mission “to bring transportation—for everyone, everywhere,” today Uber has reached a valuation of around $70 billion and claimed a market share high of almost 90% in 2015. However, in June 2017 Uber experienced a series of bad press regarding an alleged culture of sexual harassment, which is what most experts believe caused their market share to fall to 75%.

In February of 2017 a former software engineer, Susan Fowler, wrote a lengthy post on her website regarding her experience of being harassed by a manager who was not disciplined by human resources for his behavior. In her post, Fowler wrote that Uber’s HR department and members of upper management told her that because it was the man’s first offense, they would only give him a warning. During her meeting with HR about the incident, Fowler was also advised that she should transfer to another department within the organization. According to Fowler, she was ultimately left no choice but to transfer to another department, despite having specific expertise in the department in which she had originally been working.

As her time at the company went on, she began meeting other women who worked for the company who relayed their own stories of harassment. To her surprise, many of the women reported being harassed by the same person who had harassed her. As she noted in her blog, “It became obvious that both HR and management had been lying about this being his ‘first offense.’” Fowler also reported a number of other instances that she identified as sexist and inappropriate within the organization and claims that she was disciplined severely for continuing to speak out. Fowler eventually left Uber after about two years of working for the company, noting that during her time at Uber the percentage of women working there had dropped to 6% of the workforce, down from 25% when she first started.

Following the fallout from Fowler’s lengthy description of the workplace on her website, Uber’s chief executive Travis Kalanick publicly condemned the behavior described by Fowler, calling it “abhorrent and against everything Uber stands for and believes in.” But later in March, Uber board member Arianna Huffington claimed that she believed “sexual harassment was not a systemic problem at the company.” Amid pressure from bad media attention and the company’s falling market share, Uber made some changes after an independent investigation resulted in 215 complaints. As a result, 20 employees were fired for reasons ranging from sexual harassment to bullying to retaliation to discrimination, and Kalanick announced that he would hire a chief operating officer to help manage the company. In an effort to provide the leadership team with more diversity, two senior female executives were hired to fill the positions of chief brand officer and senior vice president for leadership and strategy.

• Based on Cox’s business case for diversity, what are some positive outcomes that may result in changes to Uber’s leadership team?
• What strategies should have been put in place to help prevent sexual harassment incidents like this from happening in the first place?

“ Critical Thinking Case ” in Principles of Management by OpenStax is licensed under under Creative Commons Attribution 4.0 International License .

Principles of Leadership & Management Copyright © 2022 by Laura Radtke is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

How Uber Disrupted An Industry With An Explosive Approach

Table of contents.

In this strategy study, we’re going to delve into a company that impacted everything from people’s everyday lives and entrepreneurial dreams to the startup world and city legislature.

Its story and strategy are fascinating, often problematic, and definitely worth exploring. So let’s embark on a different kind of Uber ride.

Despite disrupting transport around the globe, Uber defines itself as a technology company , not a transport company - hence their legal name Uber Technologies Inc. It was one of the first companies to embrace and define “the sharing economy” concept and created a two-sided digital marketplace for drivers and riders.

Uber’s mission was to make transportation as easy to access as running water and they wanted to do it in a different way - without owning its own vehicle fleet like your regular taxi company. 

That asset-light strategy is what makes Uber so incredibly scalable and it proved to be a huge draw for investors. Since Uber’s launch in 2010, the company has attracted over $25 billion in VC funding.

Their business model and immense financial backing helped Uber achieve:

• Present in 10,500+ cities across 70 countries
• 131 million monthly active platform customers
• Nearly 23 million rides per day worldwide
• Over 5 million drivers worldwide
• 118 million users in 2021
• Annual revenue of $17.4 billion in 2021
• A 68% share of the US rideshare market .

Uber’s numbers are astronomical and the company is a perfect example of a disruptive and transformative brand. However, as we dive deeper into Uber’s strategy, you’ll see that Uber faced and is still facing many challenges - the biggest one among them being its (un)profitability.

But let us start at the very beginning...

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It all began on a cold night in Paris...

It was a snowy winter night in Paris in 2008. Two friends and successful startup founders, Travis Kalanick and Garrett Camp, were attending the annual tech conference LeWeb. More importantly, they were trying to get a cab but couldn’t find one.

What if you could just request a ride from your phone?

This idea, based on a very real need at that moment, is what sparked the creation of Uber.

After the conference, the entrepreneurs went their separate ways, but when Camp returned to San Francisco, he continued to be fixated on the idea and bought the domain name UberCab.com. 

In 2009, Camp was still CEO of StumbleUpon, but he began working on a prototype of UberCab as a side project. At the time, UberCab was still an idea for a shared luxury cab service that could be ordered via an app.

Camp had managed to persuade Kalanick to join UberCab in an advisory role and on July 5, 2010, the first Uber rider requested a trip across San Francisco. Kalanick became Uber’s CEO in December 2010, while Ryan Graves, Uber’s first CEO, assumed the role of the COO and board member.

Uber’s app, enabled its users to order a ride with a tap of a button . A GPS identified the rider’s location, and the cost was automatically charged to the card on the user account. Uber’s simplicity fueled its early popularity among users as well as investors and the startup quickly became one of the hottest companies in San Francisco.

By October 2010, the company received its first major funding of $1.25 million and in 2011 its growth skyrocketed. Early in the year, the company raised $11 million and went on to expand to New York, Seattle, Boston, Chicago, Washington D.C. as well as abroad in Paris.

Yes, just a year after the first Uber ride was requested, Uber had already launched internationally in Paris, where the idea for Uber first took root.

In December at the 2011 LeWeb Conference, the very conference “responsible for Uber’s inception”, Kalanick announced that Uber raised another $32 million in Series B and that investors like Jeff Bezos and Goldman Sachs got on board.

In 2012, Uber launched its arguably most popular service UberX. UberX provided an option of ordering a more affordable car as an alternative to its original black car service. That’s when Uber became really appealing to the mass market.

Behind Uber’s explosive growth are an innovative business model and growth strategy that we must explore before diving into Uber’s global expansion.

Key takeaway #1: build solutions for real-world problems

Successful products and services identify real problems and figure out how technology can be leveraged to solve them. Uber’s founders made sure they’re going to be able to get a ride during a cold winter night by using mobile technology to transform on-demand transportation.

All about Uber’s scalable business model

When talking about Uber’s business model, we need to mention that since its launch, Uber has expanded and diversified its services. It’s no longer just a ride-hailing service - it also offers food delivery (Uber Eats) and trucking (Uber Freight).

However, for the sake of simplicity, we’ll mostly focus on Uber's core business of ridesharing and the business model revolving around it. 

The basic idea behind Uber is to connect riders that need to get somewhere with drivers that are willing to take them there. Riders create the demand while drivers provide the “supply” and Uber acts as the marketplace where both parties can seamlessly connect.

As you can see, Uber has two key users and it has to provide strong value propositions for both drivers and passengers in order to attract enough users for the platform to function as intended.

Let’s see why passengers and drivers use Uber.

Uber’s value propositions

• Convenient on-demand ride bookings
• Real-time tracking
• Cheaper rates compared to taxis
• Accurate estimated time of arrival
• Automatic credit card rides
• Lower wait time for a ride
• Upfront pricing
• Multiple ride options

For drivers

• Highly flexible source of income for people who own (or are willing to loan) a car
• Completely flexible working hours
• Good trip allocation
• Assistance in getting vehicle loans
• Weekly or even daily payments

Uber’s target market

While the appeal of Uber is quite obvious, who exactly do they target?

As evident from the value propositions, Uber has two main target segments - passengers who want a fuss-free experience ride from A to B and drivers that want flexibility and some extra income, usually on the side.

When it comes to passengers, Uber’s website’s headline for a long time was: Everyone’s private driver . That instantly lets us know that Uber’s target market is very, very wide. It’s everyone who needs a ride .

While targeting several customer segments with different cost-conscious and more luxurious service options, what’s perhaps more important is how Uber reached its audience at the very beginning as you can’t just target everyone from the get-go.

It’s all about passionate early adopters

Uber did a masterful job attracting its first users - passengers as well as drivers. When it comes to launching a marketplace the first few weeks are absolutely crucial as there needs to be enough supply and demand for service to feel worthwhile.

Uber developed a highly targeted and localized early adopter strategy in the Silicon Valley area. They knew that launching there meant that the company will be interacting regularly with the tech community who are continually looking for new tools and services that improve their quality of life. People there were ideal early adopters and Uber reached them by sponsoring tech events, providing free rides, and in general driving awareness among this audience.

San Francisco also has notoriously spotty cab service which was perfect for Uber. As early adopters, completely fed up with the taxi situation in the city, tried Uber, they took to blogs, social media and every other way possible to tell their friends about this new way to ride.

The Uber experience became a vector for growth as early adopters impressed their friends with the ability to call a black car from their phone with a couple of taps. These new riders were immediately wowed by the experience and became new users and advocates within the span of a single car ride.

Uber also knew that attendees of their sponsored events were well connected and highly likely to share their experiences with friends, tech press, and social media audiences after trying Uber.

By seeding this audience, they were able to create a growth engine that hinged not just on word of mouth, but by showcasing the service to one's friends which quickly led to a growing network of passionate customers.

Uber combined that initial campaign with its referral marketing strategy where users can give friends free rides while earning credits themselves. This “give money-get money” program gave first-timers a more concrete reason to try the service. It’s been massively successful both for Uber and for certain “superfans”, one of whom earned over $50,000 in referral credits . Drivers also get referral incentives, thereby making acquisition on both driver and rider sides faster and easier.

That’s how Uber quickly got a lot of passionate users who were actually Uber’s first target market. Of course, every company wants passionate users, but as you’ll see, Uber needed them to win against the myriad taxi regulations in major cities.

Uber’s early adopters were people that weren’t happy with the existing state of the transportation industry in their cities. They quickly became advocates for the company in various forums as Uber fought against old regulations. It was a very clever move to identify and cultivate these customers early on. By making customer convenience and service a priority, Uber took the role of “disruptor” and turned it into a part of the company’s image and brand. They joined a broader socioeconomic movement towards changing old industries in ways that benefited consumers. 

It’s safe to say that if Uber wasn’t backed by its passionate users, it wouldn’t be able to expand nearly as fast as it did. In fact, the disruptive socioeconomic movement became a key part of Uber’s early business model.

Adapting to local markets

Despite targeting everyone, Uber still takes into account local experience. As Uber expanded it segmented its audiences and precisely targeted them by region and immediate needs.

For example, in countries like India and Thailand, the average customer must deal with higher traffic congestion and reduced purchasing power than a North American city. In these regions, Uber expanded its offerings with a rickshaw and motorbike service, which are more affordable and often faster transport options.

What enables Uber to adapt its services to the local condition? It’s arguably the most important part of Uber’s business model and quick expansion...

An asset-light strategy

As we said Uber is not a transport company and therefore does not need the assets a traditional taxi company requires.

By being “just” an online platform connecting drivers with passengers via their smartphones eliminates Uber’s need to establish a brick and mortar presence in each new city to which it expands operations. This model eliminates many barriers to Uber’s growth and drastically increases its scalability. It also unlocks the potential for Uber to expand into contiguous service segments such as food delivery (Uber Eats) without drastic changes to the company’s operating model. 

The majority of Uber drivers use their own cars which means that Uber doesn’t need to invest in a fleet of company-owned vehicles or the insurance and repair costs that come with it. It also doesn’t need dispatchers or call centers as the whole process of hailing a ride takes place on their app. 

So, compared to a traditional cab company, Uber doesn’t have to deal with:

• servicing and maintaining a fleet of taxis,
• call center agents,
• administration,
• parking fees,
• recruiting and training drivers and issuing permits.

This means massive savings in fixed and variable costs as well as the agility to respond more quickly and effectively to market changes relative to its competitors.

That’s why Uber was able to expand extremely quickly and in a span of 10 years appeared all over the globe. No taxi or transport company is able to achieve that.

Their lack of assets shows how they save money and expand at relatively low costs - but how does Uber actually make money?

How does Uber make money?

You can probably guess that Uber’s ridesharing service makes money by taking a cut of each ride that happens through their platform. While this is correct, Uber’s revenue model consists of more than just trip commissions - even without taking into account its other services like Uber Eats and Uber Freight. Let’s take a look at other revenue streams their business model enables.

Trip commissions and surge pricing

Uber provides the drivers on its platform with a robust supply of ride requests to accept, fulfill, and make income. When passengers pay for the ride through the app, Uber takes their commission and transfers the rest to the driver. Uber claims that they charge their drivers a 25% fee on all fares, yet reports vary.

However, Uber’s trip rates are not always the same. Uber utilizes a surge pricing model , which is also a cornerstone of Uber’s business model.

It takes advantage of the dynamic relationship between supply and demand and willingness to pay. When there are more passengers than available drivers in a given area, the algorithm increases rates in order to equilibrate this discrepancy. The first benefit of this model is that it attracts drivers to areas offering higher rates, thus increasing their numbers in regions of high demand. Second, it narrows the initial pool of potential passengers based on how much they value a ride, allowing Uber to more accurately segment their customer base and satisfy those users who need their service the most. 

Thus the surge pricing model serves the purpose of capturing the highest possible margins for the company and its drivers while establishing a targeted base of users that value Uber rides the most. These users might also be enticed to upgrade their chosen option to a premium one the next time they use Uber, which is considerably more profitable for the company.

Leasing to drivers

Uber runs a vehicle leasing program in many of its target countries to help new drivers get onboard faster. Drivers have to pay an upfront security deposit for the vehicle and payments are automatically deducted on a weekly basis from the driver’s earnings.

Advertising

There are millions of people around the world that interact with Uber cars every day. Not just the ones who use it for rides but also the ones who see them. That’s a huge opportunity for local as well as global brands that can take advantage of Uber’s on-car advertising .

Brands can advertise on cartop video screens, car wrappings, or car stickers. All three ways display ads on the car and are a fairly traditional form of advertisement, yet Uber with their huge number of drivers can get some money out of it. Of course, drivers that are willing to use their cars as moving ads also earn some additional income.

Understanding Uber’s business model is important if we want to understand the company’s extremely fast and aggressive global expansion, which is something Uber is quite famous for.

Key takeaway #2: plan for scalability

Building a scalable business model is critical, especially if the company’s revenue depends on the quantity of its service. Uber has built its platform in such a way that it is easy for it to expand to new markets and serve millions of users at the same time without a significant increase in its operational costs.

Uber expansion strategy

Uber’s initial global expansion it’s an amazing showcase of the company’s “ask for forgiveness instead of permission” approach . As we’ll see later, Uber’s culture has completely changed since then, but its early expansion is what brought the company mercurial success as well as plenty of backlash and issues of all kinds.

Uber employed an almost warlike mentality when going into a new market and the company’s sole focus was winning. This was first visible in San Francisco even before it went global.

Uber received a cease and desist order in San Francisco soon after its launch in 2010. It ignored it and issued the following response , that might be seen a bit on the arrogant side:

“UberCab is a first to market, cutting edge transportation technology and it must be recognized that the regulations from both city and state regulatory bodies have not been written with these innovations in mind. As such, we are happy to help educate the regulatory bodies on this new generation of technology and work closely with both agencies to ensure compliance and keep our service available for our truly Uber users and their drivers.

Our commitment is to facilitate an improved transportation option that provides safe, reliable, and convenient travel. That will not change. We will continue full speed ahead with the mission of making San Francisco city a great place to live and travel.”

They were relying on their passionate supporters and on their lobbying efforts to put things in order. Not just that, while this is playing out, they're continuing to push forward and expand into other parts of the world. That’s how aggressive they were from the get-go.

Going to Paris - because they can

Uber recognized early that international expansion should be a priority if the company wanted to achieve exponential growth and made Paris its 3rd launch city and 1st city outside the US.

In fact, when they launched in Paris, they launched as sort of a prototype, just to show that they can do it without too much difficulty. 

As Mina Radhakrishnan, Uber’s first Head of Product said in a blog post :

“At Uber, we launched our first international city, Paris, in 30 days. There was a lot of manual work to continue launching in other countries and languages while we didn’t have a core set of international systems  – we had to charge everyone in US dollars for several months. In parallel, we built out the foundations and kept moving pieces onto the new infrastructure, which allowed Uber to keep momentum and still scale.”

While Paris served as an enticing showcase for new investors it also made Uber realize they need an expansion playbook.

Uber’s unusual expansion playbook

At first Uber treated each city as an individual project. They would investigate what needed to be done on a case-by-case basis, and it involved a whole lot of work manpower. 

However, there was a market that needed to be monopolized and they needed to act quickly.

Uber soon realized that looking at each city as a project was too slow. Instead, they developed a process based on the lessons learned from their initial projects and created their aggressive expansion playbook.

Here’s Uber’s plan when expanding to a new city:

• Secretly enter a new market. Recruit drivers and customers through company ambassadors who gain commission and Uber credit. Offer first-time customers free rides to create a strong customer and to exploit a legal loophole for promotion. 
• Ignore threats of legal action. Make a case that customers want Uber to be there. 
• Ignore government sting operations. When the government threatens Uber’s drivers with fines, reassure them that Uber will cover any penalties, legal costs or other repercussions using the massive sums of money invested in the company.
• Start lobbying the state government. Start pushing for regulations that legalize its operations. Create a positive public image and gain the support of influential local charities and other key community stakeholders. Involve customers in petitions.
• Monopolize the market. Hire more drivers, pour more money into promotion, and manufacture PR stunts like delivering puppies or ice cream.
• Undermine the competition. Recruit drivers from competitors by offering them high sign-up fees and often employ other tactics to disrupt their services.

This was the overarching process, and there is obviously a multitude of smaller processes within each of the six steps. The playbook was implemented by a new, local team with a separate entrepreneurial manager who was overseen by Kalanick, the CEO at the time.

While the process was extremely aggressive it’s also how Uber increased its valuation from $3.7 to $41.2 billion in just 15 months. 

The main thing Uber did with this playbook was to launch its service seemingly out of the blue which gave the authorities no time to react before it was firmly established in the city.

While this playbook is responsible for Uber’s early success the approach was often challenged and frowned upon.

War on all fronts

Unsurprisingly Uber has been heavily criticized for aggressively lobbying, following unfair labor practices, jeopardizing the security of passengers and drivers, and playing with local laws by requiring no permits. There were too many scandals and issues to cover them all.

Uber’s warlike approach worked better in countries with legal systems based on common law. In common law countries like the US, Canada, and the UK, laws and regulations are more flexible and subject to judicial interpretation. Uber was therefore afforded greater latitude when arguing the legality of its case in the courts of law. 

In the U.S., Uber used consumer enthusiasm for its service to bring pressure on local politicians to develop rules that allow it to operate. However, such an approach is difficult in civil law countries like China, France, Germany, Spain, and much of continental Europe.

This resulted in plenty of bans, penalties, and losses on various markets .

Uber has been banned from operating in parts of France, Germany, Spain, the Netherlands, and Belgium. It has been accused of willfully ignoring and breaking the law, placing both drivers and riders in peril. In the Netherlands, the company had to pay around 2.3 million euros to settle a case, after being accused of operating an illegal taxi service from 2014 to 2015. 

Uber also faced issues in countries where the relationship between Uber and its drivers meets the definition of the employer-employee relationship. This is one of the reasons why the app was temporarily banned from operating in Colombia and faced similar legal issues in Chile and Argentina.

Its presence in various countries has generated an incredible backlash – protests, riots, and clashes with angry labor unions - especially cab drivers.

Uber also completely mismanaged their launch in China and lost billions trying to establish themselves on the Chinese market. Here’s where their process completely failed them.

When Uber came to China, it didn't fully anticipate all the changes it would have to make. In China, besides having an established competitor in Didi, Google Maps didn't work, so Uber had to completely redo their location services.

Uber also relied on credit cards for payments, and in China, consumers increasingly used apps to do their payments. However, the main apps consumers used ( WeChat and Alipay), were owned by parent companies of the rival ridesharing company, so Uber had to essentially negotiate with its rivals in order to have consumers pay for their ridesharing services.

The Chinese policy regarding competition is also very different from the policy in the United States and much of Europe. The Chinese government wants to promote domestic firms and aggressive tactics are not really an option, because when push comes to shove, the government is likely to come down on the side of the domestic company.

Despite many problems and failures, Uber made impressive headway in foreign markets. But their success also made them a target. Well-funded local challengers soon replicated and improved upon Uber’s model and quickly limited Uber’s market share or pushed them out of their markets.

Tactical retreat from some markets

After Uber hired a new CEO in 2017 and started cleaning house at the end of 2017 (more on this later), it switched to a much less aggressive expansion strategy. In 2018 they decided to retreat from some markets instead of trying to “win at all costs”.

While some may see retreat as a failure, Uber’s early and aggressively sought international position actually provided an opportunity. Instead of completely giving up on markets, Uber used its leverage as an established player to acquire stakes in local competitors . Uber acquired 15.4% of Chinese Didi, 38% of Russia’s Yandex Taxi, and 23.2% of Southeast Asia’s Grab. 

Uber also vowed to do a “reset” in Germany, where it operated a very limited service in Berlin. 

Uber is still left fighting in India against rival Ola where the two have been locked in a costly battle for years over dominance in India’s ride-hailing market. The rivalry is more awkward now that both companies share a mutual large investor: SoftBank. 

Uber’s early super aggressive expansion policies reflected its combative corporate culture which soon tarnished the brand’s image.

Key takeaway #3: being ultra-aggressive is a double-edged sword

There’s no denying that without its extremely fast expansion Uber wouldn’t be the brand that we know today. But as scandals mounted and as Uber lost millions and billions of dollars in certain markets, we should ask ourselves if things could have been done differently. Ignoring local regulations, while it did work in some cases and was extremely costly in others, was never ethical. And we can probably all agree that even if a company adopts an aggressive playbook, it should do all it can to act ethically as well.

Uber’s toxic culture comes to light

Uber needed three key elements in place if it wanted to thrive as a global business.

• A set of country managers who are responsible for their individual markets.
• An understanding of how those markets differ.
• A unified executive team, which creates a centralized command center.

Under Kalanick, Uber actually had the first two. There were strong regional managers and a decentralized command structure that allowed them to enthusiastically implement Uber’s playbook.

However, Uber was lacking a unified executive team to coordinate global operations, including the activity of the individual country managers.

Not just that, back-biting, undermining, and infighting were the rule, not the exception, and executive meetings were often canceled at the last minute.

When we look at Uber’s playbook, that’s not really surprising. Uber always played to win and they did a really good job at recruiting teams of people who really wanted to win as well.

One of the downsides of this course of action is that if you exclusively focus on winning and getting around the existing regulations it quickly blurs the line of what's ethical and what's not ethical - not just when expanding, but inside the company as well.

It also brings into the company a certain kind of people - people that enjoy treating every encounter as a confrontation . Constantly fighting skirmishes outside and inside the company is not just exhausting but affects the morale at the company and the corporate culture.

Uber’s cultural guidelines weren’t helping. They ranged from the sober “Be Yourself” to full-on bro-tastic maxims like “Superpumped” and “Always be hustling”.

As the company scaled rapidly, so did its toxic culture and questionable business tactics. These led to a constant stream of nasty and very public challenges. They included political infighting, allegations of corporate espionage, and criminal investigations.

Then there were the many run-ins with regulators, taxi firms, and even Uber’s own drivers. Uber saw a backlash in some of its key markets which came to a head with the #DeleteUber campaign.

The old Uber logo didn’t help either. It emphasized the public’s perception of Uber’s hostility, imposing itself on customers with all-caps on black background, reflecting Uber’s hyper-masculine attitude.

While Kalanick did build a hugely successful business, an increasingly toxic culture had become a poison and tarnished the brand.

“The radical scale success of Uber that was unprecedented at the time, I think, led to a culture that was highly confident, a culture that was confrontational, a culture that to some extent celebrated breaking the rules . All of which made possible what Uber built, but which created a blind spot as to individual's respect, respect for diversity of different viewpoints, et cetera, that led to Susan Fowler's blog – which by the way wasn't the only difficult occurrence happening at the company,” says Dara Khosrowshahi, the current CEO of Uber.

Exposed by a blog post

The blog post Khosrowshahi mentions was published by a former Uber engineer Susan Fowler in February 2017. She described a toxic culture at the company where sexual harassment was rampant and managers cannibalized each other. 

Her post received so much attention that Uber decided to respond by having the law firm Perkins Coie do an investigation into her allegations.

The CEO and co-founder of Uber, Travis Kalanick, began facing heavy scrutiny over Uber’s company culture. Earlier in 2017 Bloomberg also posted a video of him arguing with an uber driver over falling fare rates, which certainly didn’t help his case and further tarnished Uber’s brand.

The company finally recognized a crucial if simple truth: to maintain a sustainable brand long-term, Uber had to be honest about what it stood for. It postured itself as a cutting-edge, progressive company, yet its corporate culture was the opposite of progressive. The brand teetered on the brink of outright hypocrisy.

Kalanick resigned as CEO on June 20, 2017, and there were numerous other personnel casualties of Uber’s very public self-reflection.

The need to rebrand was clear: without a complete brand overhaul, Uber risked totaling its business and Uber decided to undergo a massive effort to restore its image and set itself up for the future.

Key takeaway #4: recognize when it’s time for a cultural shift

While the “always be hustling” mantra and “win at all costs” people might be required to succeed at a startup, there’s a time when such thinking should be left behind. As Uber grew and expanded it never really took a hard look at the corporate culture it created. It wasn’t a small startup anymore, it became a huge company and should’ve therefore acted more responsibly sooner. In the end, it was forced into an overhaul, but not before its toxic culture tarnished the brand.

Uber rebrands and goes public

When Uber decided to turn things around there were two major areas they focused on - one was their corporate culture and values and the other was their brand .

Khosrowshahi, the new CEO of Uber, said that they asked their employees what should represent the culture of Uber going forward.

He recaps the conversations and answers:

“We celebrate differences. We want to be a different company but we also celebrate differences and backgrounds and where you come from and religion and sexuality, et cetera, and we believe that no matter what you bring to the table, you should be able to contribute to what we call Uber.

The simplest answer that I hear repeated over and over is: We do the right thing, period. We didn't want to define to the employee what the right thing is. You know what the right thing is. Let's do that and, period, that's what we do.”

Listening, observing, and learning became the foundations of Uber’s cultural overhaul.

Since the change, some Uber executives even go the extra mile to participate as normal Uber drivers and experience what Uber’s drivers experience. The importance of getting one’s hands dirty is a part of the refreshed culture. 

They started calling their drivers “driver-partners”.

“Now we have a fundamental connection there that is reflected in the

organization, we have a driver product team, and we now fundamentally build our

product with the driver. We talk to them, we have a dialogue with them, and we build with

them. That kind of connectivity with our driver-partners, I think, creates a win-win and it

creates mutual respect,” says Khosrowshahi.

The current CEO also recognized that executives can get out of touch with reality and said that whenever he goes from city to city he meets with drivers and asks them what they like and what they don’t like.

Uber also changed its approach to communication with governments and regulators. Before all the conversations and the dialogue was happening through lawyers, now Uber is trying to talk about their requests and find a compromise wherever they can’t agree with authorities.

While Uber is still facing challenges and there are still many dissatisfied parties, the company has changed its warlike and aggressive approach and is trying to make things work in a different, more humane way.

A new, more emphatic brand

Uber also embarked on a major rebranding intended to capture an accessible, progressive style that reflected the best of the company. 

The company understood it faced a critical mission: it had to persuade customers that its lousy reputation left the building when its former CEO was replaced.

Uber opted for a complete redesign to overhaul the brand from the ground up. 

Their new logo is the foundation of a substantial rebranding effort – one that incorporates a sense of mobility, accessibility, and friendliness not found in previous iterations. The company’s goal was to create a cohesive brand system described as “instantly recognizable, works around the world, and is efficient to execute” .

The agency Wolff-Olins summed up the project goals on their case study site :

“The brand needed to work around the world. Its highest growth areas are in regions outside of the US, such as Latin America and India, where Wolff Olins has a considerable depth of experience. Instead of pursuing a complex identity system, localized through color and pattern, we moved towards a universal ‘beyond simple global brand. Teams in diverse markets can make it relevant to their audiences with culturally specific content.”

What began as everyone’s personal driver is now all about moving forward and moving together .

The fresh logo was supplemented by creatives that included photos of people from around the world — serving two purposes. Firstly, it represents Uber’s global market, and secondly, adding this human element made the brand a whole lot more relatable. It’s no longer just a tech startup in Silicon Valley — it’s also the drivers you meet every morning, the co-riders you pool with every evening.

Arguably the best example of Uber’s new branding direction is their marketing campaign What moves you, moves us . It’s a campaign that focuses on the drivers and is built on empathy. It acknowledges and shows appreciation for their drivers' hard work and shows the customers who and what they’re supporting when they choose to ride with Uber.

More recently, Uber acknowledged the hard work of frontline healthcare workers during the Covid-19 pandemic with a #GratefulUK campaign. The company offered them free rides and free meals during the Christmas period and encouraged people to share letters, drawings, poems, or doodles thanking the workers. 

Overhauling the brand’s image and corporate culture were not the only major changes that happened after Uber’s scandalous years and Kalanick’s resignation. Another major step towards the maturity of the company happened in 2019 when Uber decided to go Public.

Going public - to boost reputation, get more money, or both?

In less than two years after the rebrand began, Uber decided to go public. Filing for IPO was likely a part of Uber’s rebranding plan. 

Why? People tend to look at public companies as more mature. Going public also provides a sense of accountability because public companies have to report on a quarterly basis and are subject to the regulatory process. It opens the company up to an entire set of investors who drive transparency. That’s exactly what Uber needed after all the previous scandals.

Of course, the public market also provides greater liquidity and more readily available money, which Uber needed as well as it was losing billions of dollars on a yearly basis.

However, Uber's IPO didn’t go as well as expected. Uber’s valuation predictions hovered around $120 billion , which would’ve made it the most valuable company to ever go public. In the end, Uber priced its stock at $45 apiece for a valuation of $82.4 billion , which was lower than many expected yet it is still one of the most valuable exits in history. Uber’s stock began falling right away, but we won’t go further into that.

What’s more important - the company has become public which means new pressure from big investors and shareholders every quarter to stem their losses. And as we’ll see later on, Uber’s eventual profitability is not nearly guaranteed.

Before we dive into the questions of profitability, we should examine how Uber defined itself as an innovative company and how it evolved in the last 10 years.

Key takeaway #5: when you need to change, show dedication

Although the jury is still out on how successful Uber’s rebranding actually is, it’s clear that they’ve undergone major steps to repair their reputation. And there’s really no other way to do it. If you want to rescue a tarnished brand, you have to show that you’re truly dedicated to making it work and aren’t just trying to save face for your own sake.

Uber innovation & diversification strategy

Although Uber is known as the main disruptor in the transport industry, the company is actually not the ridesharing pioneer, but a fast follower in the sector.

Uber’s competitor Lyft and former competitor Sidecar (which shuttered back in 2015) are the ones that pioneered ridesharing as it is known today, which entails using non-professional, non-commercially insured vehicles and drivers. 

Uber initially worked exclusively with commercially licensed, insured, and regulated entities (known as Black Cars in many areas) before transitioning to the current ridesharing model.

While Uber was a fast follower, it expanded quicker and more aggressively and offered a better user experience which led to market dominance in many regions. 

In fact, Uber followed a market entry pattern that has proven successful for business entities in the past – Myspace preceded Facebook, Yahoo preceded Google, and Blackberry preceded Apple’s iPhone. Historical patterns of transformation suggest that being first does have its advantages, but entering the market early and iterating quickly is even more vital when it comes to dominating a market. 

Uber’s expansion playbook is a prime example of how quickly they adapted their model and grabbed the opportunity of extremely fast expansion which was possible because of the significant funding the company received.

Their activation of early adopters and passionate customers to support Uber via petitions and pressure on local authorities can also be seen as an innovative approach to one of the ridesharing market’s main challenges.

A flexible pricing model

Uber’s surge pricing model is another example of a simple yet ingenious solution to a very real problem of the taxi industry - how to get a ride when you simply can’t get a cab . That can happen during peak traffic times or during bad weather.

When Uber’s demand for rides is higher than the supply the prices surge. That means users can almost always get a ride if they’re prepared to pay enough. 

Researcher Oliver Senn analyzed satellite data on weather conditions over a two-month period, and he obtained 830 million GPS records of 80 million taxi trips. The data shows that it was not the high demand for taxis that resulted in a perceived shortage on rainy days; instead, it appeared that many cabbies simply did not pick up passengers, fearing accidents on the wet roads. However, Uber entices their drivers with higher prices and therefore higher earnings when there’s a shortage of rides. 

While plenty of users don’t like the surge pricing, it proved to be a way to get more drivers in the area to take advantage of higher earnings when there’s a shortage of available rides.

Reviews ensure a better service

Another massive differentiator between Uber and traditional taxis is that Uber has rating systems for both drivers and passengers. A review system by itself is nothing new, but it hasn’t been used in the transport industry before - especially not on an individual basis.

The system is a simple solution to the question: “How will drivers and passengers behave?”

It promotes trust in Uber and better behavior on the parts of both driver and passenger as it weeds out the bad users. 

More than just a ridesharing service

Over the years Uber has become more than just a ridesharing company. It’s leveraging its underlying technology to test new services that have the potential to generate additional revenue and fuel Uber’s ambitions.

By introducing new services that add incremental value for users, Uber creates opportunities to capture a larger share of their consumer’s wallets, while also retaining and generating additional income for drivers as well.

There are two main services that stuck around: Uber Freight and Uber Eats.

Uber Freight

Uber Freight is basically Uber for trucks. Uber launched its own on-demand trucking app in 2017 with the core idea of seamlessly matching shippers with carriers. 

In August 2018, it was spun off into a separate business unit, a move that simultaneously allowed it to gain momentum and burn more cash. After spinning off of Uber, the freight company underwent an expansion. 

In 2020 an investment firm Greenbriar Equity Group has committed to invest $500 million in a Series A preferred stock financing for Uber Freight. When announcing the investment Uber said it will maintain majority ownership in Uber Freight and will use the funds to continue to scale its logistics platform, which helps truck drivers connect with shipping companies.

Uber Eats food delivery service launched in 2016 and it was a logical next step for Uber as it aligns with its ridesharing business and helps it utilize its large fleet of drivers. It launched as a separate app and grew in popularity at a rapid pace.

Uber Eats ensured that Uber’s customers used the company’s services more often than ever before. Users who used both Uber and Uber Eats booked an average of 11.5 trips per month, versus only 4.9 trips for those using only a single Uber service.

Consumers benefited from an additional convenient service, and drivers gained a new source of trips which generated a more steady stream of bookings throughout the day, which in turn increased the overall supply of drivers.

With drivers now busier and making more consistent income, they have less reason to dual-app and drive for a competing service like Lyft.

Uber Eats was also huge for Uber during the Covid-19 pandemic. While Uber’s ride-hailing segment contracted by 24%, Uber Eats increased revenues by over 200% in 2020 and prevented a much higher loss of revenue that would have occurred if Uber hadn’t diversified its services.

Uber Revenue by Segment

YearMobilityDeliveryFreightOther2018$8.9 Billion$0.7 Billion$0.3 Billion$0.1 Billion2019$10.4 Billion$1.3 Billion$0.7 Billion$1.3 Billion2020$7.9 Billion$4.8 Billion$0.9 Billion$1.3 Billion

Dreaming of self-driving cars

You may have heard of Uber’s Advanced Technologies Group(ATG) which was established in 2016 with the purpose of developing self-driving cars. Kalanick, the CEO at the time, saw it as an essential investment and there’s no doubt that fully self-driving cars would immensely benefit Uber.

However, ATG brought high costs and safety challenges . Throughout the course of a pandemic-stricken year, Uber has made efforts to stem losses in its ride-hailing business and control business costs. That’s why at the end of 2020 ATG was acquired by its start-up competitor Aurora Innovation. In fact, Uber handed its equity in ATG to Aurora and then invested $400 million into Aurora, which will give Uber a 26% stake in the company. Uber CEO Dara Khosrowshahi will also join Aurora’s board.

“With the addition of ATG, Aurora will have an incredibly strong team and technology, a clear path to several markets, and the resources to deliver,” Chris Urmson, co-founder and CEO of Aurora, said in a statement. “Simply put, Aurora will be the company best positioned to deliver the self-driving products necessary to make transportation and logistics safer, more accessible, and less expensive.”

Uber positioned itself to be right there once Aurora develops their self-driving car, which just might be the key to Uber’s profitability in the future.

Looking towards the future

While Uber’s plans for the future after the pandemic are not set in stone, Khosrowshahi says that people should think about Uber not as a service but as a transportation platform or as an Amazon of transportation. He said that people will be able to take a bus, to take a car, to take a train or to take a taxi using Uber. It would be a win for the consumer because the more choices they've got, the more pricing they've got, the better the product is.

Uber is aiming to pivot their strategy so that it is more inclusive. How they are planning to do that is yet to be seen, but we can be certain they’re going to try and offer new services and further diversify their product as that might be their only option if the company wants to become profitable.

Key takeaway #6: keep innovating and evolving

Uber doesn’t rest on its laurels of being the first prominent rideshare app. Its founders understood really well that the competition will grow over time and they can only stay ahead if they evolve and diversify. They keep adding new features and new services while constantly looking to invest in new technologies.

Will Uber ever be profitable?

Although Uber claims that it will soon become profitable, there are many sceptics that think it won’t happen - and with a good reason.

Uber has been losing billions of dollars during the last few years. Although Uber losses improved in 2020 due to Uber Eats, the company still lost $6.77 billion . Uber plans to minimize losses in 2021, yet due to the ongoing pandemic, Uber had to spend hundreds of millions of dollars in incentives to get drivers back on the streets once the Covid situation improved and the demand increased.

Hubert Horan , a transportation industry expert who has published in-depth analyses of the company's financial outlook, has this to say about Uber’s profitability:

"Not only can I not imagine any remotely plausible explanation as to how Uber could suddenly become profitable after eleven years of massive losses, but absolutely no one has attempted to lay out a financial analysis making such a case. Not the company, not Wall Street analysts, not academics — no one."

In its S-1, a document that every company must file with the SEC if it wants to go public, Uber itself acknowledged and warned that it was possible it would never become profitable .

How come such a successful company that is a magnet for investors still struggles with such heavy losses?

The thing is Uber doesn't really have an edge over its competitors. A smartphone app that matches passengers with drivers can be — and has been — replicated by countless other companies. And once there are competitors, Uber doesn’t offer a service that would be that much more efficient. 

As it often does, it all comes down to costs-leadership . The need for human drivers that have to earn a living wage seems to be a vexing problem for the ride-hailing industry. It just costs too much. 

That's why Uber once staked so much of its future on self-driving cars, which could potentially reduce the company’s per-mile cost by 80% . But as you know, Uber has already sold its self-driving research center.

The typical explanation of the Uber model is that its focus has been on growth, not profit. Huge investments allowed Uber to keep scaling up until it was everywhere and ensured that the populace relied on its service. According to Horan, its plan was to "eliminate all meaningful competition and then profit from this quasi-monopoly power" in the exact same way that Amazon has managed to do for e-commerce. Except that it hasn't worked as competition is still here and Uber’s core service is not that different from it.

Uber’s push for profitability might be the reason that as of April 2021, the cost of a ride had increased by 40% as the New York Times reported . Why? The increase might be due to the shortage of drivers at the time. Uber is notorious for not paying drivers enough (according to the drivers), but that only works until the point that a critical number of them decide that it isn't worth any of their time. 

To counter that Uber has to raise fares, but then it runs the risk of losing a big part of their market and their revenue, even with higher per-passenger fares.

What’s the solution? That’s probably the most important question in Uber’s history and one that will define its future. It’s also the reason Uber is trying to position itself as a transportation platform and not just a ridesharing service as profitability continues to be an industry-wide problem.

Key takeaway #7: have a clear plan on how to become profitable

Although Uber is one of the fastest-growing and arguably one of the most successful companies in the last decades, it’s still not profitable and it’s a fair question if it ever will be. This shows that growth is not everything and if you want to run a sustainable business you have to know how it will eventually become profitable.

Uber’s SWOT analysis

Let’s recap everything we’ve covered during this strategy study in a concise SWOT analysis.

Global brand recognition

Uber’s brand is unmistakable and has become a synonym for “ridesharing.” Uber is present in over 60 countries worldwide and is the first ridesharing brand that comes to mind when new users are looking for ridesharing apps.

A strong market position

Uber is the largest ridesharing platform in the U.S. and worldwide. Currently, Uber’s market share in the US is 68% and 32,4% worldwide. In an industry that’s all about the quantity that’s extremely important.

Knows how to diversify

One of Uber’s key success factors is its ability to adapt and innovate to encompass changing needs. This can be seen in its diversification into logistics with Uber Freight and broadening its services to offer groceries and food delivery with UberEats. Diversification plays a huge part in Uber’s total revenue.

Dynamic pricing model

Uber’s surge pricing strategy has been good for its drivers. Drivers can earn more at night, in bad weather conditions, and during the holidays. This encourages more drivers to take ride requests to meet demand surges.

Low operational costs

Uber is based on low fixed investments and minimal physical assets. It has a fleet of cars they don’t actually own and no full-time drivers which helps to keep operational costs down. 

Convenient to use

That’s the whole point of Uber. Anyone can order a ride with a few taps on their screen, learn the price of the ride and pay it through the app.

More affordable than cabs

Uber was and still is more affordable than most cabs and its competition. However, that might change with the recent price surges.

Generally good service due to the review system

Uber riders have the ability to rate their trip and the driver. As drivers are always trying to improve their ratings, riders will most likely experience good service.

Bad publicity due to scandals

Despite Uber’s rebranding, stories of former sexual harassment scandals, driver fraud, and reports of very low driver’s wages reflect poorly on the company’s image and might alienate drivers as well as riders.

Substantial losses

Uber has lost billions of dollars year after year, which is starting to affect its image and spending. Nobody really knows if the company can become profitable and when or how it might happen.

Low-profit margins

Uber has to keep its fares low and can’t increase its commission per trip leading to low-profit margins. As we’ve seen, Uber's unprofitability has already prompted it to withdraw from China, Russia, and Southeast Asia. 

Dependency on their workforce

Uber is heavily dependent on its drivers. They are essentially Uber’s brand ambassadors 24/7. However, their behavior is unpredictable and the company’s image is hurt every time a scandalous story reaches the news. Many drivers have been accused of harassment and abuse.

The main service can be easily replicated

The ridesharing industry has a relatively low barrier of entry and Uber’s main functionality can be easily replicated by potential competitors which happened in Southeast Asia.

Opportunities

Further diversification

Uber Eats exploded during the recent Covid-19 Pandemic and significantly increased Uber’s revenue in 2020. Uber Freight also grew by 64% in Q2 of 2021 and earned $348 million. Further diversification might be one of the more viable paths towards Uber’s profitability.

Self-driving cars

While not there yet, driverless technology would significantly lower Uber’s operational costs while eliminating scandalous stories caused by their drivers’ bad behavior.

New markets

There are still many untapped growth opportunities in many countries. In fact, t he acquisition of Careem by Uber with $3.1 billion has opened the door to an incredible business opportunity for the company in the Middle East.

Local laws and regulations Uber has previously ignored

Increasing pressures from local authorities require Uber to comply with certain laws, which the company skirted when setting up in different countries. Non-compliance with local laws incurs fines and results in bad publicity. At the same time, the communities of traditional taxis are pushing heavily on the enforcement of some type of regulation. 

Low driver’s wages

Uber drivers reportedly earn less than minimum wage in many locations. Drivers have become more active in various locations in advocating for their “fair share” and are pressuring Uber to increase their wages, which would make it even harder to become profitable.

Employee retention

Unsatisfied drivers may switch to rival platforms due to better incentives from competitors from the ride-hailing market or from other parts of the sharing economy.

More and more competition

As the ridesharing market becomes more saturated, it will become more difficult for Uber to retain customers as shifting to other services if they offer lower prices is very easy. This goes for services like food delivery as well.

Final thoughts and key lessons

Uber is a fascinating company with a fascinating story. It’s one of the most famous disruptors in the last decade, yet its technology is not really disruptive. But the way it uses it and combines it with its business model certainly is!

If there’s one thing that defines Uber it’s determination .

Determination to stick to their brand strategy of a technological company and an industry disruptor. Determination to quickly expand across the globe even if it means taking on regulators and local authorities. Determination to right the ship and overhaul the culture once they recognized their mistakes.

What allowed Uber to do all of the above while adapting to different challenges and markets is its lack of assets . That’s where the company really shines - they solved a big real-world problem with the fewest possible assets. 

Uber is not a shining example of a company that did everything right. 

But no one can argue that it looked for an opening, grabbed the chance, and achieved amazing things. 

It’s a walking lesson that sometimes you have to grab the opportunity before it’s too late, learn on the flight, and do your best to correct your mistakes as you go .

In the end, Uber disrupted an entire industry and achieved a multi-billion-dollar IPO. Who knows what would’ve happened if they waited to have everything figured out?

Recap: Growth by the numbers

Uber’s 2020 data is skewed by the impact of the Covid-19 pandemic, that’s why we decided to use the data from 2019 instead.

The ultimate list of strategic takeaways:

• Create a flexible business model and stick to it.

Uber always identified itself as an asset-light technology company. That allowed it to quickly expand, adapt and diversify. Uber’s potential because of its scalability and flexibility is what made it so attractive to the founders.

• Recognize what you need to do to succeed and don’t waver.

Uber knew that it needed to scale and reach new users fast if it wanted to grab its market share before the competition. Their super aggressive expansion is controversial but it did achieve its goal and positioned Uber as the rideshare leader. 

• Don’t neglect your corporate culture.

Uber’s many scandals combined with its toxic corporate culture tarnished Uber’s image and almost ended in disaster. If your early dogma is to hustle, recognize when it’s time for a cultural shift and make sure your values, brand, and culture are in sync.

• Diversify and evolve to stay ahead of the competition.

Look for new opportunities and add new features or services to capture them. Uber’s asset-light flexible service allowed it to explore other complementary industries and Uber Eats significantly limited Uber’s losses during the pandemic. If there are low barriers to entry into the industry, the company should be proactive and take steps to stay ahead of emerging competition.