From the vision
statement of Uber Transportation Company, it is clear that the organization is
focusing on diversification. To begin with,
the company’s new application which is the UberEats app is already established
in 29 nations. More so, the organization is really pushing to have an extensive as well as the rapid push towards perfectly operating in
approximately 200 cities by the time the year came to an end. From this
statistics, it is evident that Uber is focused on diversification. Even though the recent deal made with Softbank is
forcing the company only to narrow down and focus only on the USA and Europe.
The largest shareholders realized that it would only be profitable for the
organization to retain as well as recover all the market shares in the US while
it has maintained their growth only in
those European markets which are key to the development of the organization. In a nutshell, this strategy seems to be ending the
diversity that the transportation company had in mind while they developed
their vision statement. however, even if
this strategy is implemented the company is still diversified since most of its
profitable markets that they are to focus on
are in different nations and not only one. The car
booking company is well established in the US, Latin America, Europe and
Australia. Just focusing on this major
markets will still leave the company diversified enough.
On the other hand, the
company is not only diversified In terms of the nations they operate in but
regards to the products they are offering in their markets. The carbooking company offers various products in the
form of applications that enable their customers to access their
products and services. Not only does Uber offer the food delivery services
through the new UberEats application but also offers other services as well.
Because the company was formed with the main purpose of offering transportation services it made a decision of
becoming diversified in this context by
engaging in various experimental services. To begin with, UberEats which has been successful so far was launched in
2014 which is an application that enables
their consumers to order meals and it would be delivered to them. At the same time the organization also established the
UberRush which offered an hour delivery service. On the other hand the organization also offered
UberEssentials which was a household delivery
services but it has been shut down. Finally on the diversification of their product the organization also has UberFreight
that provides services for long distance freight booking.
1) Describe how UberEats can be thought of like the platform for a multi-sided
market. What strategies can UberEats use
to become the dominant deliverer of
restaurants’ foods to home/office patrons? (50 points)
First of all as an
experimental service that were
launched in 2014 it has been one of the successful services which were
established at that time. the food delivery services the company is offering
has been responsible for almost 10 percent of the gross yearly sales. The
UberEats can easily be considered as a platform for various markets. first, the
UberEats application work on both the
smartphones as well as tablets and are supported ion both iPhone along with
Android devices. This offers a chance for wider
market access since a majority of the people are using devices which either
supports iPhone or Androids OS. As a food delivery application which enables
individuals to access the services from any location such as the offices using
their personal computers or anywhere by use if their mobile devices. In addition, the UberEats application has the
ability to detect the location of the User while displaying those restaurants which are open near the user. In this
way, the application enables fast delivery of meals to the user. Finally, the
Uber Eats services can provide lunch, dinner, and breakfast menus which
sets them perfectly for a multi-sided
On the other hand,
the UberEats services may apply
strategies such as lowering the overall prices of the ordering. The company has
to compete effectively with their competitors in a manner that would enable
them to maintain higher profits while minimizing loses. Secondly,
some of the strategies already
established such as detecting the location of the user while enabling various
forms of payment at the convenience of
the customer is an added advantage. More so, the UberEats services should
ensure that they are using the wide range of driver to their advantage so that
to speed up the delivery services and enhance efficiency.
To finalize teaming up with various restaurant will strengthen as well as
diversify their customer reach.
From Wikipedia (https://en.wikipedia.org/wiki/UberEATS
The Uber Eats smartphone/tablet application
works on iPhone and Android-based devices.Ordering may also be done on a PC at
the company website.Users can read the menu, order, and pay using their
device—optionally including a gratuity for the delivery person.
Uber Eats teams up with restaurants in
different cities to offer a range of cuisines. Uber Eats locations provide
breakfast, lunch, brunch, and/or dinner menus. Some are open 24 hours every
The app detects the user’s location and
displays restaurants open at the time separately from those that are closed.
Payment is charged to a credit/debit card on file with Uber. Meals are
delivered by couriers using cars, bikes, or on foot. As of March 2017 the
delivery fee is $4.99, excluding courier gratuity.
Upon ordering, the customer is notified of
the total price combining delivery fee and meal price, no tips required.
Customers can track the delivery status after the order is placed.
The platform occasionally features food from local celebrity
chefs wishing to increase their public visibility, including some who do not
have physical restaurants.
UberEats a bright spot on menu with $3bn
potential sales Food delivery app builds sizeable revenues for company battered
by several crises
in San Francisco The Financial Times OCTOBER
fast-growing food delivery service accounted for nearly a tenth of the
company’s global gross bookings in the second quarter, according to people who
have seen the figures, a level that implies the unit is on track to exceed $3bn
in gross sales this year. The previously unreported numbers underscore how
rapidly UberEats has grown since its launch two years ago as a standalone app.
UberEats has been a rare bright spot this year
for the San Francisco-based company, which has been battered by a series of
crises, including the firing of co-founder Travis Kalanick in June. During the
second quarter of this year, UberEats accounted for 8-10 per cent of global
gross bookings, which implies $700m-$870m of gross turnover for the unit.
Uber’s total gross bookings were $8.7bn for the period. By comparison, GrubHub,
the US food delivery company valued at $4.1bn, reported $880m of gross food
sales during the second quarter.
While Uber still derives the majority of its
revenues from its transportation services app, UberEats has been growing faster
than the core business. The average bill size for an UberEats order is bigger
than for an Uber passenger journey because the consumer also pays for the food
through the app. UberEats has a presence in 29 countries and has been on a
rapid expansion push to operate in nearly 200 cities by the end of this year.
However, the service is still unprofitable in most places, and like other delivery
services it faces the prospect of low margins and high competition.
Facebook launched a food delivery service in the US. Amazon’s restaurant
delivery service, launched two years ago, has been expanding, while smaller
rivals such as Postmates, Deliveroo and DoorDash are also fighting for market
was piloted in 2014 as part of a group of experimental services that included
UberRush, a one-hour delivery service, and UberEssentials, a delivery service
for household items that has since been shut. The company also owns
UberFreight, for long-distance freight booking. One of Uber’s advantages in
food delivery is tapping into its fleet of more than 2m Uber drivers around the
world, who can carry either passengers or food in cities that have UberEats.
Some cities also have dedicated UberEats couriers.
Rohit Kulkarni, head of research at
SharesPost, pointed to Uber’s advantage “in terms of convenience and speed of
delivery” because of its number of drivers and the “network effect”. He said:
“At a certain density, you are able to offer products and services that are
very hard for anyone else to replicate.” Uber declined to comment on the
turnover figures for UberEats. The company confirmed that, as of July, UberEats
had positive gross margins in one-quarter of the cities where it operated.
Uber told to focus on US and Europe as
SoftBank deal closes Car-booking company’s biggest investor also says it needs
to ‘restock human capital’
Rajeev Misra has signalled an end to the
‘everwhere, for everyone’ strategy
in Seattle Financial Times 1/1818
largest shareholder has called for the car-booking company to focus on
recovering market share in the US and growing in key European markets, a
strategy that would end the founders’ original vision of building a transport
service “everywhere, for everyone”. Rajeev Misra, a board director of Japanese
technology conglomerate SoftBank — which became Uber’s biggest shareholder on
Thursday, with the formal closing of a $9.3bn investment* — told the Financial
Times that the transportation group had a faster path to profitability if it
returned to its core markets such as the US, Europe, Latin America and
Australia. This is a growth company, this is not just about them cutting their
losses. Who cares if they lost a billion more or half a billion less?
SoftBank director Mr Misra, who will join
Uber’s board as part of the deal, insisted that exiting unprofitable countries
was not solely about cutting its losses, which hit $1.5bn in the third quarter
of 2017, but that growth prospects were more promising in its core markets.
“This is a growth company, this is not just about them cutting their losses,”
he said. “Who cares if they lost a billion more or half a billion less?”
already started to leave some of its biggest emerging markets towards the end
of the tenure of Travis Kalanick, the company’s controversial chief executive
who was ousted in June. It sold its China business to rival Didi Chuxing in
2016, and merged its Russia business with local technology group Yandex shortly
after Mr Kalanick’s departure. However, Uber is still locked in expensive wars
of attrition in India with local rival Ola and in Southeast Asia with Grab, and
lost market share in the US to rival Lyft last year.
already a major investor in several of Uber’s competitors — holding a 20 per
cent stake in Didi, and a 30 per cent share of Grab — and its backing of the US
company will complete its collection of ride-hailing themed investments.
SoftBank’s backing triggers a range of governance changes at the company and
will give Dara Khosrowshahi, Uber’s new chief executive, more control as he
tries to turn the company round. SoftBank owns 15 per cent of the company’s
shares after the transaction, while a consortium of other investors bought 2.5
per cent in the same deal.
challenge for Uber will be to improve the company’s financial position ahead of
an initial public offering expected by October 2019. Mr Khosrowshahi has said
that a key goal for this year is for the company to demonstrate a path to
profitability. Uber chief executive Dara Khosrowshahi has a mandate to reform
the company and the funds to make it happen
Uber’s business is growing fast — gross bookings grew 85 per cent last year to
about $37bn, compared with $20bn in 2016 — its losses have also widened. Mr
Misra said that the company should also revamp its Uber Eats food delivery
business, which has been one of the company’s recent bright spots and has been
expanding into new markets aggressively. He added that the company needed to
“restock human capital” following an exodus of much of its top leadership over
the past 12 months. “We’re proud to have SoftBank?.?.?.?and the entire
consortium in the Uber family,” an Uber spokesman wrote in a statement. “This
is a great outcome for our shareholders, employees and customers that
strengthens Uber’s governance as we double down on our technology investments
and continue to bring our services to more people in more places around the
of the deal marks the end of a seven-month process that was often fraught and
seemed at risk of falling part. Its conclusion is a key part of Uber’s plan to
move out from under the shadow of Mr Kalanick. Mr Kalanick sold $1.4bn worth of
his shares as part of the transaction, which also reduced the influence of the
company’s early investors.
between SoftBank and venture capital firm Benchmark, a major Uber shareholder,
started in June. But all discussions were put on hold over the summer when Uber
was without a chief executive for more than two months. The process resumed
after Uber’s board appointed Mr Khosrowshahi as chief executive in September,
although it was again delayed several times by the deep division on Uber’s
board, which struggled to present a united front. Arianna Huffington, the media
entrepreneur and an Uber director, said that the company saw SoftBank as a
strategic partner. “It was strategically very important for Uber to have
SoftBank on the cap table in a significant way,” she said, referring to its
investments in competitors. “The deal would not have happened without Rajeev
being able to see all the big, strategic reasons why that deal was important
for the whole ride-sharing industry, and not being stopped by the internal
drama, but always being able to navigate beyond it.”