Marketing Management UBER Analysis Essay Example

earn higher incomes compared to traditional taxi drivers, and they are not required to pay for a taxi license or certain taxes. Consumers who download Auber can track their approaching car and view information about their driver, including reviews and ratings. Auber's pricing strategy is determined by demand, distance, and car type, meaning that customers may have to pay higher fees during high demand periods or bad weather conditions, depending on the type of car they request. Payments are made using the customer's registered credit card information, ensuring secure transactions.

Auber shares the ride receipts with the driver, taking a smaller margin of 15% instead of the previous 20% due to competition with Get and Hallo. Auber's revenue is used to cover expenses such as research and technology development, marketing, and employee costs. Unlike its competitors, Auber does not own a fleet of cars, making it a more cost-effective option. This allows them to keep a significant portion of their revenue as profits. Rather than investing in cars or infrastructure, Auber focuses on reinvesting in research and development and acquiring new resources.

Auber's business model is based on low inventory, high transactions, and high margins. The company receives substantial funding for its cuisine model from Google Venture. Analyzing Auber's competitive advantages in the London taxi hailing app market through the resource-based view is essential. Understanding environmental constraints is crucial for strategic planning and marketing. A PESTLE analysis will be conducted to examine six external conditions (Political, Environmental, Social, Technological, Economical, and Legal) in relation to Auber's business situation.

PESTLE Analysis is a framework used to assess the external environment of transport services, considering Political, Economical, Social,

Technological, Environmental, and Legal factors. In terms of political factors, these have a direct impact on transport services by affecting CA emissions and climate change. Despite political factors favoring public transport to reduce emissions and aid climate efforts, Auber, a transportation service, stands out among its competitors due to the provision of superior services like offering low-emission hybrid cars. This advantage helps Auber align with political factors.

Environmental factors can also impact Auber, particularly weather conditions that lead to increased demand during unfavorable weather situations. It is worth mentioning that increased demand often results in higher prices for journeys. Furthermore, social factors play a significant role as changing lifestyles and the high percentage of younger populations using smartphones indicate customer needs that drive them to the market.

Technological advancements greatly influence Auber's business. With innovations being crucial for Auber's success, the increasing role of the Internet in people's lives presents opportunities for the company to make advancements in their services. Economical factors, such as recessions, directly affect customers' budgets and their purchasing power.

Overall, this PESTLE Analysis highlights the various factors at play in Auber's external environment which can influence its operation and success.Volatile fuel prices and legal constraints directly impact Auber. Governments have the power to ban Auber or impose new regulations on taxi-hailing apps, like Auber, which can affect their market performance. Conducting a SOOT (Strengths, Weaknesses, Opportunities, Threats) analysis helps analyze buyer capabilities and determine the company's strengths, weaknesses, threats, and opportunities. In a competitive market, it is crucial to be aware of weaknesses and threats to find solutions and utilize opportunities to gain additional market share and increase revenues. Figure 2 presents the SOOT

analysis strengths of Auber. Auber's first-mover advantage and strong consumer awareness provide a competitive edge. The company offers various alternatives to cater to different customer needs, including cheap and fast options like Auber POP and Auber car, as well as quality options like Auber Black Car and Auber SUB. Another strength is Auber's global expansion, reaching 200 cities worldwide, starting from the USA.Moreover, Auber offers easy, safe, and trustworthy transactions, providing a convenient way of traveling for customers. One weakness for Auber is that they do not charge flat fees like their main competitor, Get, which may offer more predictable prices. Another weakness is that Auber drivers do not have a taxi license, which can lead to legal problems. Additionally, Auber does not operate in rural areas, which can be seen as a weakness.

A complaint against Auber is their poor consumer service. Unlike other companies, Auber does not hire drivers directly but finds them through agents. Examining the opportunities, the most influential aspect of Auber's business model is that it is a service rather than a product, saving them from high sunk costs faced by competitors. Additionally, being a mobile platform without a fleet of taxis allows the firm to turn most of its revenues into profits.

These profits are generated from transaction costs rather than production cost. Since Auber does not employ drivers directly, it enables them to have flexibility and hire more drivers.The dominant threat faced by Auber in the UK e-hail app market is the decline in market share caused by rivals like Get. The fixed prices offered by Get and other competitors put Auber at a disadvantage. Furthermore, Auber's lack of proper

taxi licensing is another drawback. Additionally, Auber has faced numerous protests from taxi companies in Germany, France, England, and other countries. These protests allege that Auber operates illegally due to their drivers not paying the same tax rates as traditional taxi drivers. Moreover, other taxi companies accuse Auber of compromising passenger safety and undermining existing regulations. According to market share statistics for taxi-hailing apps in London, Get holds the highest market share at 20-30%, followed by Auber at 20%, and Hallo at 10%. As the market challenger, Auber has the opportunity to adopt some of the services and amenities provided by Get to enhance their own offerings, attract more customers, and ultimately increase their market share over time. Evaluating the competitive landscape is crucial for assessing competition, and understanding the strengths of competitors can guide Auber in identifying areas for improvement and determining their feasibility.

According to national statistics from the Department for Transport, there are an estimated 78 thousand taxis and 153 thousand licensed private hire vehicles in England. These figures indicate that the number of private hire vehicles is twice the number of taxis operating in England. Additionally, 31% of the total licensed taxis and private hire vehicles in England are located in London, suggesting that private hiring is a popular choice for Londoners.

When analyzing Get-Taxi as the market leader, it can be inferred that some of their most influential advantages include: competing with flat and predictable prices, enabling advance booking up to 2 weeks prior to the journey, and offering 24-hour customer service for drivers and customers. In comparison, Auber has failed to implement the advanced booking feature and has proven

to be lacking in customer service.

On the other hand, Hallo stands out as the only company in possession of a real taxi license for all their cars. According to Porter, competitive advantage is derived from the value a firm creates for its buyers that exceeds the firm's cost of creating it.

The utility of Auber can be enhanced in three categories: Service, Personnel, and Image. Regarding Service, it is important to reduce the time it takes to reach customers in order to enhance buyer satisfaction. Providing reliable and modern cabs, along with well-trained drivers who can offer personalized customer service, is crucial. When it comes to Image, advertising and promotions on special occasions can attract new customers and create a positive brand perception. Additionally, Porter's Generic Strategies include three directions for market segmentation: Cost Leadership, Differentiation, and Focus. The Focus strategy is further divided into "Cost Focus" and "Differentiation Focus". The Cost Leadership Strategy aims to gain a competitive advantage by maximizing profits through cost reduction or by cutting prices to increase market share while maintaining reasonable profits. On the other hand, the Differentiation Strategy focuses on creating unique and appealing goods or services for customers and competitors alike.

The differentiation strategy involves exploring, expanding, and innovating goods or services to provide superior quality products. This creates a unique image in the industry and is appreciated by consumers. The Focus strategy concentrates on specific niche markets, considering their associations and meeting the unique needs of consumers. This can involve offering low-cost or well-specified goods or services. Implementing this strategy cultivates strong brand loyalty and makes the market segment less attractive to competitors.

Buyer's marketing

strategy aims to provide a premium service at a premium price, attracting loyal customers. It targets hip, tech-savvy customers who value their time and are willing to pay for convenience. Auber's campaign focuses on their service and demonstrates this through their ice cream campaign in NYC. It showcases the difference in convenience and experience by delivering on-demand ice cream directly to customers' homes.

The primary goal is to provide an extraordinary customer experience and let them spread positive word-of-mouth about the brand and its unique service.

Auber has partnerships with Virgin America, providing Buyer's points to flyer members, increasing awareness and credibility. Trivial offers discounts for up to three apartment visits for registered participants. Potter's Five Forces Analysis identifies five forces that determine the competitive power of a business: Supplier power, Buyer power, Threat of substitute, Threat of New Entry, and Competitive Rivalry. Supplier power in Auber is high due to the number of suppliers and the exclusivity of their goods/services. Buyer power in Auber is high as customers have alternative services available.The competitive rivalry depends on the number and capability of competitors. When a business has more competitors offering equally attractive products and services, the competitive rivalry is high. Buyer's competitors, such as Get and Hallo, provide services at lower costs and have their own drivers.

The threat of substitution is determined by the number of alternative options available to customers. If there are many substitutes for a service or goods, the threat of substitution is high. In London, there are many substitutes for transportation such as tubes, trains, buses, and black cabs, leading to a high threat of substitute for buyers.

The threat of new entry

is based on the capability of other businesses to enter the market and start similar businesses easily. If the startup cost in terms of capital, time, and technology is low, new competitors can easily enter the market. In the taxi service business, the threat of new entry for buyers is very high because all it takes is a simple mobile application and some free-lanced drivers to start a new business.

Auber can explore diversification strategies/path to expand its market. One option is to focus on event-specific marketing for special occasions like Valentine's Day, Harvesting Day, Children's Day, Christmas, and New Year's. Auber can also provide special offers or promotions for its loyal customers to incentivize their continued support.

A personalized Car/Cab service is offered with specially trained drivers for business people, celebrities, and high-class tourists. The market development strategies include expanding into nearby small cities and rural areas with average pricing to attract new customers. Additionally, partnerships are being initiated and developed with local hotel chains and airport travel units to provide services such as site seeing and airport pick & drop. Partnerships are also being formed with local schools to offer services for students.

Furthermore, a new business wing/unit is being developed to accommodate the transport needs of disabled people with special features they require. Partnerships are being established with courier service organizations like Royal Mail, DHAL, and Faded to provide delivery services to their customers. Additionally, partnerships are being formed with local manufacturing companies to support their logistic services including transporting goods, delivering to customers, and transporting raw materials for production.

Auber focuses on hiring local drivers in each city, aiming to localize the

company in every aspect. This approach builds trust between the company, drivers, and customers.

Auber, after hiring local drivers, provides them with training and guidelines to teach them the "Auber Way". They also offer a global chat room for their employees to interact, discuss, share ideas, suggestions, and best practices among the company. By promoting collaboration and trust internally and externally, Auber aims to gain a competitive advantage and increase market share, leading to higher revenue. Auber strives to surprise and delight their customers by going the extra mile such as delivering kittens and ice cream in New York. This approach allows customer actions to go viral on social media and offline, helping Auber reach new markets and seize new opportunities. Additionally, Auber has a unique way of serving their customers by ensuring taxis arrive in no more than 9 minutes through a dedicated team. They have also integrated a referral program within the Auber app.