Uber's differentiation

The classic busy city street with a person in need of a ride waving down a taxi was the way people have being taken cab rides for generations. Uber has shaken up this old business model and revolu
tioned the way the ride-sharing industry must compete for business. Through the app Uber, a customer can use their smart phones to request a ride to a location they want. As a customer myself, I’ve seen the way Uber has changed the cab industry as local taxi services decrease in popularity in favor of the convenience Uber brings. 

We see lots of benefits that come with uber such as convenience, lower prices compared to traditional taxis and long waiting times. There are even options to enjoy luxury rides or share rides with other, the spectrum of customers Uber targets has widen over the years. Uber takes advantages of the demand for convenient transportation and have developed both a cost leadership and a differentiation strategy. By lowering their service fares, other local businesses cannot find it difficult to maintain their position in the industry. As Uber’s website says, the three needs that are differentiators are: request from anywhere, ride with style and convenience, and hassle-free payment.

Uber and Lyft are the two biggest competitors in the industry but Uber has innovated its service by expanding its spectrum of driving services. For example, the Uber penetrated the food service industry with the release of their UberEats application. The new service line to their company generated them $4.8 billion in 2020, which was a 152% increase in revenue generated from the prior year. (Businessofapps.com) The UberEats service line has also changed over time as its original purpose was to deliver food from restaurants right to the customers door. 

Other businesses and services have jumped at the opportunity to promote and sell their products through UberEats. The company came up with a new slogan, “Now Delivery Eats, And Don’t Eats.” (Ubereats.com) in order to encourage businesses to use their delivering service even if they aren’t a food oriented business. The commercials and advertisements that came with the new slogan also targeted customers who want to purchase groceries, alcohol, convenience, flowers and retail items. The innovation Uber has with its services in 70 different countries allows for them to continue their competitive edge over its rivals. It is estimated that uber earns 2$ more for every ride when compared to it’s closet competitors, Lyft. Overall Uber has developed a sustainable business strategy edge that disrupts the old cab industry business model. Uber will continue to innovate ideas that drive up with annual revenue and implementing them into different countries to continue their global expansion.

Citations

Contributor, PESTLEanalysis. “SWOT Analysis for Uber.” PESTLE Analysis, 21 June 2016, https://pestleanalysis.com/swot-analysis-for-uber/. 

Davis, Levi. “Lyft vs. Uber: What's the Difference?” Investopedia, Investopedia, 8 Feb. 2022, https://www.investopedia.com/articles/personal-finance/010715/key-differences-between-uber-and-lyft.asp. 

Explore the Uber Platform | Uber United States. https://www.uber.com/. 

Gil, Paul. “How Uber Works: A Helpful Primer on the Ride-Hailing Service.” Lifewire, Lifewire, 11 July 2021, https://www.lifewire.com/how-does-uber-work-3862752. 

Jalloh, Mohamed S. “Uber: Advantages and Disadvantages.” Investopedia, Investopedia, 8 Feb. 2022, https://www.investopedia.com/articles/investing/110614/taxi-industry-pros-cons-uber-and-other-ehail-apps.asp.