Uber Value Chain Analysis

Background of Uber (Uber Technologies Inc.)

Regardless of Uber’s enormous controversies, it managed to generate net revenue of 11.1 Billion US Dollars in 2020. Garrett Camp, Travis Kalanick, and StumbleUpon were the brilliant minds behind the idea of the foundation of Ubercab in 2009. Monthly more than 100 million people use this mobile transportation service and the number is growing. It offers different services other than ride-hailing which includes freight transportation, couriers, food delivery, and package delivery.

Company’s Motive

Being the largest mobility service, Uber considers its responsibility to cope with climate change so by 2040 it is committed to becoming zero-emission and fully electric. Other than that they are working on self-driving technologies and helping people to get food delivered fast and at affordable prices. Besides these, safety is the priority for the passenger and also for a driver.

In contrast to traditional taxis, using Ubercab is way too easy. The only task you have to do is to create an account in the application, enter the destination, confirm the pickup location by using GPS, and confirm the ride. While the captain arrives you can track the ride as well and you will know when your driver will arrive.

Purpose of Value Chain Analysis

Value chain analysis is implemented to appraise and look into the specific activities of a company or a firm. Production, designing, marketing, distribution, advertisement, etc are the basic activities performed by a company. All these activities are constituents of the value chain. The value chain exhibits the value activities and the margin. Value activities are used to add value to the products for customers while margin can be explained as the change that comes in the production cost or simply the difference between quality and the total cost for carrying out the value activities. To evaluate the value analysis, they divide the activities into categories i.e. primary and secondary activities. Primary activities are the activities that are used to help out in performing the main tasks of a company such as inbound and outbound logistics, operations, services and marketing, and sales. On the other hand, the secondary activities include; human resources, purchasing, firm infrastructure, technology development, etc.

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Uber Value Chain Analysis

Primary activities

Generally, the primary activities of a firm include inbound logistics, outbound logistics, operations, marketing and sales, and services.

Uber Inbound Logistics

Typically the inbound logistics is acquiring the raw material from suppliers, its handling and storage, inventory control, and transportation. Whereas in the case of Uber as a transportation service it does not have its vehicles that are used to provide services to the customers. The vehicles that are used to provide services are owned by drivers who work as contractors under Uber rather than being an employee. These Uber drivers must have a smartphone and internet access to work with the Uber Software application. Uber mobile application software and internet access are also important for Uber customers to use the service. Hence, the inbound logistics in the case of Uber are based on operations run on the internet as well as the business model of Uber. Despite being Uber as one of the largest businesses of transportation, the inbound logistics of Uber are only restricted to mostly office tools that are needed to run the business and the hardware.

Uber Operations

Generally, operations of the company include the input given to the final product form such as packaging of the final product. In the case of Uber, the maintenance of technology, machinery (hardware), and upgrading of the application is necessary for profitability.

In contrast to traditional taxis, using Ubercab is way too easy. The only task you have to do is to create an account in the application, enter the destination, confirm the pickup location by using GPS, and confirm the ride. While the captain arrives you can track the ride as well and you will know when your driver will arrive. On the uber operations team, they are localized.

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Consequently, the operations of Uber include the following steps.

  1. Search for the ride: enter the pickup locations and drop-off
  2. Confirm the ride
  3. Pay the bill: after arriving at the destination pill the bill via cash or credit card.

Uber Outbound Logistics

Typically the outbound logistics include providing the services or the products from the company to the customers through proper storage, handling, and transportation. Analysis of outbound logistics is very important to get customer satisfaction. In the case of Uber transportation service, there is no need to have warehouses because it is an internet-possessed service that can be carried out at any place. Uber is operating in 80 countries or more around the globe.

Uber Marketing and Sales

Marketing and sales of a company are associated with advertising and providing the way for its customers to buy the product. In the case of Uber Marketing, Uber uses social media advertisement, events, print advertisement, etc. It mainly depends on social media marketing.  A suitable payment method also plays an important role in putting a value on the company. Such as Uber provides credit card service to the customers where the customers do not have to pay the cash instead they can use the credit card when they arrive at the destination.

Uber Service

These activities are typically used to maintain or increase the value of the product such as training, upgrading, etc. One of the important goals of Uber is to provide the customer with a high level of service. Services can typically be acquired by the usage of the software application on the smartphone. Customers can rate the service after accomplishing the task from 1 to 5 and on that basis, such low rating drivers will be considered ineffective for the company. And thus the motive of such drivers is to keep their cars clean and to offer good service.

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Supportive Activities

Supportive activities are specific for every industry and company. Like primary categories, they are further divisible into categories such as human resource, procurement, etc. These activities are explained below:

3.2.1 Human Resource Management

Human resource management plays an important role in Uber. It helps Uber to reduce its pressure from the opponents. It includes the selection, development, and training of personnel.

Firm Infrastructure of Uber

Optimization of Uber firm infrastructure can mainly help in adding value to the whole value chain. Firm infrastructure not only refers to the physical thing but also the activities which support the firm by handling finance, accounting, and strategic management.

Technology Development

Technology development holds importance in the development of the product and providing a competitive advantage. Technologists and engineers participate in this department. In Uber, the team of engineers has the incentive to provide opportunities all over the world. They have indulgence in solving the challenges and stay at the forefront.

Procurement

There are procurement rules of the firm which can add value to the company.

The Uber suppliers including the representatives, contractors, employees, etc, all must stick to the laws and regulations, and procurement rules provided by Uber. They anticipate from their suppliers that they will go along in their commitment to doing the right thing.

Conclusion

Uber is developing the means the world changes positions. By effortlessly connecting the business for drivers by giving rise to their applications further attainable and beginning additional opportunities for the riders. It is developing all around the world and continues to take people to their destinations.

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