Uber is a ridesharing and transport service providing US Tech Company. Travis Kalanick and Garrett Camp founded the ridesharing company in March 2009. The company headquarters is in San Francisco, California, USA.
Uber’s top products and services are Uber Black, Electrical Bicycle, Freight Transportation, UberPool, Uber Select, Motorized Scooter, Courier, UberSUV, UberX, Uber Plus, Package Delivery, Postmates, UberEats, and UberXL.
According to company financials, the yearly revenue of Uber in 2021 was $18.3 billion and it has out of which, the net profit (loss) of the ridesharing company was -$0.4 billion.
Approximately 26,300 employees are working for the ridesharing brand. The top competitors of Uber are DIDI Chuxing, Lyft, Grab, Ola Cabs, and Curd. However, the subsidiary brands of Uber are Zomato, UberEats, Postmates, and Careem.
According to a report, Uber is running its ridesharing business in over 900 cities and more than 70 countries across the world. The daily active users of Uber are roundabout 118 million people in the year 2021. However, the market share of the company was about 67% in the United States.
Our topic for discussion today is Uber pestle analysis. It’s going to focus on the external factors like political, economical, social, technological, legal, and environmental factors that are impacting the company.
Here’s Uber pestle analysis as follows;
Various government and legal departments of different countries are thinking about implementing minimum wage laws in the transportation and ridesharing industry. It means that the company has to get a commercial license from the government and follow the government regulations. It won’t be good for the company in terms of growth and profitability.
When it comes to the status of employees or taxi cab companies, Uber doesn’t have a clear position and it resulted in the form of lawsuits in Germany, the US, and other countries. For instance, police seized Uber’s vehicles in South Africa for not having a legal permit for taxi cabs. Other governments like Portland and Netherlands have done the same thing. In fact, the French government seized the advertisement and marketing campaign of Uber.
The unclear position of Uber in various aspects has controversies in different countries. For example, if an Uber car gets into an accident, then the affected person doesn’t know who to blame, either the company or the driver in order to claim the insurance money. That’s why many political thinkers are planning to launch new types of laws for ridesharing companies.
When we talk about the growing trend of the sharing economy like ridesharing is one example, of political think tanks, and legislators want to make it legalized. The ridesharing of Uber has facilitated many customers, but it has destroyed the conventional taxi cab business. That’s why the politicians of traditional voters oppose the ridesharing companies and want to implement strict regulations for them in terms of more taxation.
The living cost of daily necessities has multiplied all over the world in recent years, and it has become difficult for middle-income families to survive. The higher living cost is compelling them to cut down their expenses like owning a vehicle for one person. Instead, they prefer to share the ride at the same or less cost. Uber has offered a very good and economical personal mode of transportation for middle-class families.
The recent wave of pandemics has caused the global economic recession impacting almost every area of life. The worldwide lockdown, social distance, and prevention protocol have very badly affected the transportation industry. The pandemic year of 2020 declined the company’s revenue and net earnings by approximately 31.7% and 30.1%.
The best comfortable ride at an economical price range is the main reason behind the popularity of Uber. The ridesharing company has presented a very good alternative to the traditional taxi cab business, and they reduce their fair. The competitive environment is good both for the customers and the company.
Sharing of intellectual/physical resources and sharing economy are the main ideas behind the development of Uber. It attracted the attention of many customers in a very short time and created employment opportunities for ambitious drivers. But reaching this level of success of growth wasn’t easy, the brand experienced many challenges, restrictions, and bans in different countries.
Many political and legal departments are discussing the legality of Uber and the ridesharing business, and it has reduced the demand for conventional taxi cab business. Some are questioning whether it has taken the jobs, or created employment opportunities.
According to an estimate, the population of elderly and aged people is increasing and continues to do so by 2035. Approximately the age of every one in every five people is at the age of 65 by the end of 2030. The increasing population of aged people would mean the growth of Uber’s business, and they would transport services for movements.
High Prices in Cities
Drivers are happy with the increment of the fair in the big cities. But customers don’t like this change and are unhappy with the company’s policy. However, the company claims that it offers quality and quick service during busy hours. If it is at the price of a few dollars more, then drivers have a right to earn more.
Campaign on Social Media
Uber uses various media channels for the marketing and promotion of its services like social media platforms, TV ads, and word of mouth marketing. It allows the ridesharing brand to engage with customers and answer their concerns. In fact, the brand is highly active on social media platforms to connect with customers.
Smartphone users would prefer to order a taxi/cab online rather than waiting on the stand and asking random people about the address or negotiating the price. Online application has amplified the publicity of the platform. They feel comfortable using the transportation service using the online platform.
It offers customers an opportunity to select their destination and route without telling the drivers about their location or destination. Uber charges a lower fair price than its competitors.
Self Driving Technology
Google and Apple, tech giant companies have shown interest in self-driving vehicle technology and they have invested a lot of resources in it. In fact, autonomous vehicles of Google are already offering services in some cities. Other automotive brands like BMW and Tesla are also adding the auto-pilot mode features in their vehicles and new models.
It’s no doubt that autonomous driving technology is not the invention of Uber, but the ridesharing brand has worked on it and launched its vehicle on the road. Most importantly, the consumer market is a tech lover and they love the idea of self-driving rides.
Uber offers very interesting features to its customers like the cost of the whole ride in just by few clicks on their phone without negotiating over the price. However, it also provides them an option to complete the transaction either through cash or card.
Some of the other features of the Uber mobile application are tracking the whole ride online, geographical location, pop-up messages, and much more. Stable internet connectivity plays a key role in the operations of the application.
Innovation in Technology
As we’re aware of the fact that Uber is a tech company and the whole foundation of the company relies on innovative technology. We are living in the world of technological innovation and creativity, and no business can survive without adopting technology. Uber has an open attitude towards technology and innovation; it is continuously working to improve the customer experience.
Drivers as Employees
A judge in California state issued an order against the company to regard its drivers as permanent employees in 2015. The French government fined the ridesharing company for offering the transport services without having permits or licenses
Hackers hacked the customer database of Uber in 2014 and 2016, and they stole the private information and personal data of approximately 20 million customers. The regulatory committee of the EU fined the ridesharing of 1.17 million dollars for a privacy breach and it affected roundabout’s 57 million users across the world. Therefore, the company should keep the data of its consumers safe.
Minimum Wage Lawsuits
As we know that Uber is a global multinational brand like any other tech giant company. Therefore, the company should keep in mind the regulations of different countries while launching its business there, like minimum wage laws, permits, licenses, etc.
Many research studies say that Uber is moving towards achieving a monopoly in the ridesharing industry by landing more and more cars on the roads. More vehicles mean high fuel consumption, resultantly high carbon emission rate, and pollution.
In order to deal with the environmental issues, Uber has launched Green Uber with electric vehicles. It’s an excellent step towards saving and cleaning the environment. You would have a safe ride without affecting the environment.
Uber is a ridesharing company. More vehicles on the road mean more consumption of fuel, which results in the form of high carbon emissions and environmental pollution. Customers are becoming cautious about the environment, and they won’t support the company in the future.