Uber SWOT Analysis 2024: Evaluation of Competitive Position

Uber is one of those 21st-century ideas that disrupted the transportation industry and made our life better, easier, and more efficient in many ways. When there is a need for urgent transportation service, we all put out our mobile, and the go-to option is Uber.

That didn’t happen in one day! With years of constant effort and innovation, Uber has made it this far with many challenges, weaknesses, threats, opportunities, and strengths, which we will learn in this Uber swot analysis.

Uber: Company Overview

Within a decade, Uber has reached and catered to millions of people worldwide since its inception in 2009 by Garrett Camp and Travis Kalanick. Even though the primary name was UberCab, they cut the Cab part.

The basic idea was to start as an app-based service that allowed users to request a ride from a nearby driver. But, after that, it expanded its services to include food delivery, electric bike-sharing, and scooter-sharing.

Uber reported total revenue of $31.8B and employed over 32,800 people worldwide in 2022. The company operates in over 10K cities in over 80 countries, making it one of the largest ride-hailing services in the world.

Product & Services of Uber
Vehicle for hire | Food delivery | Package delivery | Courier | Freight transport

Uber Competitors
Lyft | DiDi | OLA Cabs | Bolt | Yandex Taxi | Grab | Local Taxis | Public Transport

Did You Know?

Uber drivers have collectively driven around 20B miles since the company was founded in 2009.

Strengths – Uber SWOT Analysis

Disruptive Idea: Uber’s innovative ride-hailing service would revolutionize the transportation industry and leverage mobile technology to connect passengers with nearby drivers, providing a more efficient and convenient alternative to traditional taxis, resulting in significant growth for Uber, with over 131 million active users globally in 2022 and more than 13B completed trips since its inception.

Huge Market Share: Uber is the dominant ride-hailing service and has a significant advantage over its competitors due to its large user base and network of drivers. The company has a 71% share in the USA market alone, with a massive 84% increase rate and around 40% global market share.

High Brand Value: Having a disruptive idea and being the first mover in the market have advantages, such as high brand value. Besides, constantly providing convenient and affordable transportation services made Uber one of the most valuable brands in the world, with a $62.79B brand value to date.

Strategic Pricing: The company has dynamic pricing algorithms that help Uber determine the prices, supply, and demand curve or balance and minimize waste. Besides, their revolutionary tech can adjust ride fares based on demand and supply in real-time, and it helped them get into every market in the world. They recently introduced their pricing algorithm in London.

Operational Effectiveness: Uber’s rating system and driver tracking technologies ensure that drivers provide high-quality service and operate safely. Besides, it demonstrated strong organizational and operational effectiveness using real-time data analysis over the years.

Diversified Model: Over the years, the company has expanded, and so does its multiple market offerings, including ride-hailing, food delivery, and freight, which helped the company grow its reach and revenue streams, making it a more versatile and resilient company.

Weaknesses – Uber SWOT Analysis

Low Profitability: Uber has struggled with low profitability since its inception for various reasons, including high costs associated with driver incentives, promotions, and bonuses, high r&d costs, marketing, and expansion into new markets. As a result, the company reported a net loss of $9.141B, despite generating $31.8B in revenue in 2022.

Unethical Practices: The company has been accused of various corrupt practices in the past, including criticism for its handling of sexual harassment claims and its treatment of drivers. As a result, there have been multiple lawsuits and controversies regarding Uber’s unethical practices.

Drivers Dependency: The business model made Uber heavily dependent on its network of drivers. As per the data, Uber has over 5.4M active drivers worldwide. With increasing competition, Uber has also faced challenges from drivers seeking better pay and working conditions.

Imitative Model: The idea was game-changing, but the disadvantage was that any corporation with tons of capital could copy the business model. And with the proper execution strategy, the number of competitions is increasing. As a result, not just Uber is losing market share, but also because of their core idea.

Opportunities – Uber SWOT Analysis

Offerings Diversification: Diversification has helped Uber tap into new markets, increase revenue streams, and reduce reliance on its core ride-hailing business. And Uber has the opportunity to diversify its services to include other forms of transportation, such as electric scooters, bikes, and public transit, which can increase its user base and revenue streams.

Expansion: One of Uber’s key expansion opportunities is to increase its presence in emerging markets. They are already tapping into the Indian market and expanding their reach and operations. Besides, Uber announced plans to expand its operations in Africa and the Middle East.

Better CSR: The company has much to make up for Because of all those lawsuits, controversies, scandals, and strikes. As a part of the plan, they focus on sustainability, diversity, and inclusion and launched initiatives such as Uber Pro to support its drivers.

Efficient Tech: The company believes driverless technology could significantly reduce operating costs and improve safety. Besides, they are investing heavily in digitalization and driverless technology to reduce costs and increase efficiency.

Strategic Merger & Acquisitions: To expand its business offerings and gain a competitive edge, Uber has been actively pursuing mergers and acquisitions. Uber acquired food delivery service Postmates for $2.65B and alcohol delivery service Drizly for $1.1B, Careem, and 12 more companies for better effectiveness, efficiency, and reach.

Air-Services: Air services are the future, and everyone is trying to become the first mover in this space as soon as possible. Uber is exploring air services through its Uber Air initiative, which aims to provide on-demand aerial transportation and plans to launch its air taxi service in 2023.

Threats – Uber SWOT Analysis

Competitions: As easy as it was to have the first mover advantage, Uber faces competition from ride-hailing companies such as Lyft, Didi Chuxing, Ola, Grab, and many more. Lyft is Uber’s main competitor, with an estimated market share of around 29% in the USA. In contrast, Didi Chuxing is the biggest competitor, with a market share of about 91% in China.

Several Scandals: Uber has faced several scandals, including sexual harassment allegations, data breaches, regulatory issues, and workplace culture problems. The company faced a significant data breach that exposed the personal information of over 57 million customers and drivers a few years back. Besides, breaking laws and lobbying are other issues they have been accused of recently.

Strikes: The company has faced strikes and protests from drivers in various cities worldwide to demand better working conditions and job security. In 2023, drivers protested in New York City after Uber blocked their fair hikes, and drivers feared they might even lose their cars to third parties.

Lawsuits: From allegations of sexual harassment, and discrimination to misclassification of drivers, Uber has faced numerous lawsuits. Uber agreed to pay $10M to settle a class-action case brought by women who had experienced sexual harassment or discrimination while working for the company. Recently, they have been paying millions for overcharging people in their fares.

Regulations: Uber faces regulatory threats in many cities worldwide as local governments and traditional taxi companies argue that the company operates outside existing laws. London’s transport regulator revoked Uber’s license due to safety concerns a few years back. Besides, legal challenges in some cities resulted in temporary bans on its services.

[Bonus Infographic] SWOT Analysis of Uber

Recommendations for Uber

Uber’s revolutionary idea created a separate industry that combines transportation, delivery, and other services. But, in the business world, businesses have to innovate and adapt to the world to grow and survive in the long run.

• It’s high time for Uber to start diversifying its offerings to keep its market share and survive and grow with the market demand with more innovative ideas.
• One of those growth ideas is to acquire companies that have a better idea and that the company can nurture and expand in the future.
• Ideas are not enough if they don’t expand more into markets, especially those emerging markets with considerable growth opportunities.
• Uber needs better CSR policies to tackle all those scandals and lawsuits.
• There are no unique ways to gain an edge in the market, but constant innovation and new ideas.

Frequently Asked Questions (FAQs)

Final Words on Uber SWOT Analysis

Uber has revolutionized the transportation industry by providing a convenient, cost-effective, innovative service that has benefited millions worldwide. However, the company has faced controversy and legal challenges in some markets due to regulatory issues and competition with traditional taxi services. Despite these challenges, Uber has continued to grow and expand its services, including exploring new opportunities such as air services and autonomous vehicles.

References

• Wikipedia contributors. (n.d.). Uber. Wikipedia.
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• Deschamps, T. (2020, June 26). Supreme Court sides with Uber driver seeking better pay, benefits. CTVNews.
• Uber Expands Services in Sub-Saharan Africa. (2022, September 6). PYMNTS.
• Uber Launches Uber Pro Card to Give Drivers Faster Payments, Rewards. (2022, October 6). PYMNTS.
• Korn, J. (2022, December 7). Uber launching self-driving cars in Las Vegas. CNN.
• Hawkins, A. J. (2019, December 20). Uber’s plan to launch an air taxi service in 2023 just got a boost from a secretive startup. The Verge.
• Uber broke laws, duped police and secretly lobbied governments, leak reveals. (2022, July 11). The Guardian.
• Salam, E. (2023, January 5). Uber drivers strike in New York after company blocks raises and fare hikes. The Guardian.
• Wilson, N. (n.d.). Uber strike: Drivers say they fear they’ll lose their cars in spat with third party. News24.
• Shepherd, L. (2022, September 1). Uber Signs $8.4 Million Settlement Over Driver Misclassification. SHRM.
• Todd, R. (2018, September 27). Uber Agrees to Pay $10M to Settle Discrimination Class Action. LAW.COM.
• Browne, R. (2019, November 25). Uber stripped of its London license as regulator says it put passengers at risk. CNBC.
• Uber services suspended in Barcelona. (2019, January 31). BBC News.