We live in the burgeoning age of sharing economy. Once named as UberCab and founded in 2009, today’s Uber tries to establish strategies to maximize profits but to do so is an intricate process in a dynamically competitive global economy. Uber’s entry to the traditional taxi and cab market sparked a lot of conflicts. Therefore, the company constantly co-evolved to sustain its position. In less than a decade, Uber has grown to become a prominent sharing economy services provider; boasting 110 million users monthly in the United States in 2019. As of 2019, Uber operates in 69 countries with over seven billion trips carried out. In 2019, the transportation network company generated 14.1 billion U.S. dollars in net revenue. Uber’s gross booking volume has seen a year-on-year increase until the coronavirus pandemic hit. In the fourth quarter of 2019, Uber generated gross bookings of 18.13 billion U.S. dollars worldwide. This has dropped to 10.22 billion U.S. dollars in the second quarter of 2020. Despite recent challenges, Uber aims to co-create the future of the transportation industry over the long-term.
A strategy to disrupt the transportation economy
One of the prevailing methods of improving revenue streams is to innovate in the market place to gain a competitive advantage over other market participants. Innovations shape the market-making mechanism in the economy by introducing new opportunities and challenges to the growth process. Uber Technologies follows this strategy and has a fierce corporate outlook to disrupt the personal transportation economy through its innovative approaches to old problems. Uber Technologies offers a multitude of services within and outside of the sharing economy, including bike-sharing, air taxis, Uber Eats and more. As of May 2018, Uber was the leading ride-hailing operator worldwide, with a market value of 72 billion U.S. dollars. Through merging science with practice, Uber maximizes corporate and social welfare. Thus, Uber bets on the future of transportation with its company operations, not just the sharing economy. A striking example of Uber’s disruptive business strategy includes drone food delivery. As of January 2019, the leading ridesharing company had received investments amounting to approximately 24 billion U.S. dollars.
Uber in the competitive market
Uber leads a long-term growth, and the company is still several years away from being profitable because of investments into new ways of doing business. A dogged corporate strategy comes at costs and challenges since the future is radically uncertain. Competition amongst firms is an example of this. For instance, Lyft is a major competitor of Uber globally. Although Lyft is not directly an innovator and investor in new business patterns, it has a successful strategy that advances existing possibilities in the economy. Lyft entered the market in 2012 and challenged Uber’s approach in the market by offering differentiated market services that improved Lyft’s reputation in comparison to Uber. As of August 2020, Lyft had almost a third of the market share. As the time unbound, we will know if Uber will ignite opportunity by setting the world in motion.
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