SWOT Analysis of Uber As A Successful On-Demand Business Model

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See How The SWOT Analysis of Uber Seems Like it is Under a Surveillance

Who is not charmed by the Uber Business Model?

Well, I am along with billion other businessmen. Why billion? Because we are talking about Uber and million seems too nugatory regardless of the context we are talking.

Revenue Generation? In Billions ✓

Drivers and Cars? In Billions ✓

Number of Passengers? In Billions ✓

Number of Uber Similar Business? It might have crossed at least some thousands owing to the prolific business model Uber possesses.

So, are you a business targeting to be the next Uber? Or are you just curious about what Uber seems like under surveillance?

Whatever be it! You are at the right place, we present you SWOT Analysis of Uber, with this you will be able to get valuable insights if you read till the end:

Hop onto a ride to get to know Uber well!

The forte of Uber rests in its business model – On-demand service business model. The demand for the service or a product is aggregated online and the fulfillment is done offline. This way the resources do not get wasted in the process of acquiring the customers.

The basis of the on-demand business model lies in identifying the services which can be provided on an immediate basis, such as transportation, food, beverages, or service in person.

The SWOT Analysis of Uber – Strength

∞ Brand Equity

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∞ Low Fixed Investment: No product cost

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Uber is a service-based company. It does not own a fleet of cars, nor does it have drivers of its own. The only cost that Uber incurs is that of marketing, customer acquisition and retention, and the development cost.

I am damn sure you would demand me an answer for the high cost of the Uber mobile application development, but then there is no extravagance in the development, thereby making Uber a low-cost investment business.

∞ Potentially an Unlimited Fleet of Vehicles

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Once acquired, once retained. There is no dearth of vehicles registered under Uber, especially when it provides the driver with an upper hand to be their own boss and work flexibly.

Today, there are billions of drivers with their billions of vehicles recorded under Uber making it a mammoth of taxi-hailing service. When compared with its competitors, it has the largest fleet of vehicles and drivers.

∞ Emphasis on Customer Satisfaction

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The main reason for Uber’s unflagging popularity lies in its way to satisfy the customers with its unending offerings in the form of features.

The features such as schedule ride, book ride, estimated time of arrival, car awaiting schedules, fare estimates, multiple payment options, notifications, contact driver, reviews and ratings, cancel trip, trip history, availability setting options for the drivers, accept/ reject ride request for the drivers, real-time ride request, trip information for the drivers, navigation, route optimization, start and end trip, track earnings for the drivers, driver’s dashboard, customer rating, book now ride later, surge pricing, smart pickups, split fare, car pooling, managing business trips, driver delivery reports, speed display, book for others, driver’s destination, forward dispatch, heat maps, auto pilot, favorite destination, tipping, cancellation window, wait-times, quest earning, driver injury insurance policy, teen fare, long-trip notification, support 24*7, and many more to come………

These were the features of Uber which helps it to provide quality service to its customer.

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∞Dynamic Pricing

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Uber does not have a static per kilometer charge like the traditional taxi service did. It charges on the basis of the demand aroused, weather conditions for the service to be carried out, traffic conditions of the service, and the number of stops to be made during the complete journey.

It charges high majorly due to:

Surge: When the demand for the service is much more than that of the supply, a situation like a surge arises.

Wait time: When there is a lot of hustle on the road due to the traffic, it results in an increase in the wait times.

∞ Adaptive Business Model for All Demographics

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Uber today operates in 633 cities worldwide. This clearly shows that it is quite adaptable and flexible of a model to be implemented in any demography. Although there have been many criticalities in the legal matters, but, there is not one flaw in the model that Uber works on.

The most basic and important requisites for the Uber model are the passengers and the drivers with vehicles. If that is satisfied, it is all set to operate and so it has not yet faced any major issue with the expansion in other demography.

∞ Intelligent Revenue Model

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The revenue model of Uber is both brag-worthy and grab-worthy.

Why? You ask.

Because it well justifies for the fees it charges.

►Commission-based revenue model:

Uber charges a transaction fee for the drivers and the service fee from the passengers for every ride.

►Surge-based revenue model:

When the demand is aggregated and it turns out to be more, the charges for the rides hikes automatically.

►Luxury-based revenue model:

On the basis of the premium level of the service as demanded by the passenger, Uber differentiates the price.

►Cancellation-based revenue model:

When the passenger cancels a booked ride, he is charged with the cancellation charge in his next ride.

∞ Professional Aspect

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Uber shows a completely classy side of getting a ride with its tagline ‘Arrive in style’.

With the customers and drivers empowered to rate each other on the basis of their professional behavior, there are more possibilities that both the front stakeholders maintain and keep their attitudes in check.

The SWOT Analysis of Uber – Weakness

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☼ Highly Dependent on Manpower

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The forte of Uber rests in its business model – On-demand service business model. The demand for the service or a product is aggregated online and the fulfillment is done offline. This way the resources do not get wasted in the process of acquiring the customers.

The basis of the on-demand business model lies in identifying the services which can be provided on an immediate basis, such as transportation, food, beverages, or service in person.

☼ Highly Dependent on Internet

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The service that Uber provides as a business depends on the real-time evaluation and the Internet. Thus, even though there are no legal issues in a demography, Uber cannot make a move in the countries with poor Internet connectivity.

Moreover, the service of Uber is such that it can be better managed on the smart phones and smart devices. So, Uber cannot dive in the countries where the technology has not evolved in terms of smart devices.

☼ Controversies Every Now and Then

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It would not be an overstatement if I say Uber and controversy are synonymous to each other. Uber has battled many legal issues and a way too long list of scandals.

Uber is plagued from the reports of physical harassment to aggressive competitive strategies.

There were other controversies with the center as Travis Kalanick, the previous CEO of Uber who was allegedly accused of Uber mismanagement.

The court cases filed against Uber cost it a lot monetarily as well as on the basis of time.

☼ Competition Even with the Niches

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Competition does not seem to cease yet for Uber.

While Uber planned for an attack, its competitors would counterattack.

In India, Uber planned to expand its service and this resulted in UberEats in May 2017.

To which the Indian based on-demand cab service Ola, played its share well and acquired the food giant FoodPanda in December 2017.

For every Uber action is an opposite and equal reaction of its competitors — Never knew Newton’s law of gravitation can be applied to Uber as well :D!

These were the features of Uber which helps it to provide quality service to its customer.

☼ Easily Imitated

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Tap Google and go for, ‘Similar App Development Uber’ or ‘Uber Clone business development’. You will easily see thousands and more results for developing an app like Uber.

The business model of Uber is so appealing that everybody wants to be the next Uber even without proper planning. If not more, there is at least one Uber-like app developed, launched every single day in the market be it for any niche.

Who knows one day somebody can disrupt Uber just the way Uber disrupted the traditional taxi service! And who knows that somebody can be you if you get well acquainted with all the Uber development related information here.

The SWOT Analysis of Uber – Opportunity

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∞ High Investment Rate

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The forte of Uber rests in its business model – On-demand service business model. The demand for the service or a product is aggregated online and the fulfillment is done offline. This way the resources do not get wasted in the process of acquiring the customers.

The basis of the on-demand business model lies in identifying the services which can be provided on an immediate basis, such as transportation, food, beverages, or service in person.

∞ High Growth Rate

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The service that Uber provides as a business depends on the real-time evaluation and the Internet. Thus, even though there are no legal issues in a demography, Uber cannot make a move in the countries with poor Internet connectivity.

Moreover, the service of Uber is such that it can be better managed on the smart phones and smart devices. So, Uber cannot dive in the countries where the technology has not evolved in terms of smart devices.

Checkout the FAQs For Uber As A Successful On-Demand Business

The SWOT Analysis of Uber – Threats

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☼ Legal Battles

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Uber is continuously plagued by costly legal battles and stringent regulatory sanctions from local authorities in the cities where it operates. It has to suffer from the loss of marketing cost, legal penalties, and time of course.

With the driver’s license issues, to certain obligatory, Uber’s trouble does not seem to end yet. With increasing markets and new drivers joining, molestation and frauds are also rising to which Uber has to fight single-handedly. Many campaigns exist that urge users to stop using the app and the hashtag ‘#deleteUber’ became popular.

☼ High Rate of Competition

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Lyft operates in approximately 300 U.S. cities including New York, Los Angeles, and San Francisco, Curb operates in 60 U.S. cities, Didi Chuxing operates in 600 cities in China, Grab in Southeast Asia, Careem in the Middle East, Ola in 22 cities in India.

All these work with the single ambition to be the top disruption to Uber.

Not just this, also that they are teaming up against Uber – Easy Taxi, Cabify, and 99 in South and Central America.

Tough fight!

☼ AI Can Be a Curse for Uber

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With Uber Testing on Driver-less cars, Drivers would have to suffer and ultimately Uber will be at the suffering end.

Uber is this big because of the billions of the stakeholders. When Uber will approach the driver-less car strategy, a big part of their stakeholders in the form of the drivers will be eliminated. This is how Uber will lose a huge number of service providers.

TOP TAKEAWAYS FROM THE SWOT ANALYSIS OF UBER

The Uber model is not yet to be concluded in this SWOT analysis of Uber. Many businesses will exhaust it and prosper out of it.

If you implement these strategies, you can make a flawless Uber Business:

◘ ◘ ◘ Like we saw in the detailed SWOT analysis of Uber, before targeting any demography or local level, make sure to understand the legal authorities, it will save you an hour and lots of money.

◘ ◘ ◘ Contenders? You will have plenty of them. You will need to be steps ahead in terms of expansion, revenue, strategies, marketing, and what not!

◘ ◘ ◘ The on-demand service model runs on customers – drivers and passengers. Just make sure any new feature or any revenue model you add on is customer-centric, so as to not lose on any acquired customer.

◘ ◘ ◘ Make your presence felt on at least two platforms if not website

1) Android App

2) iOS App

◘ ◘ ◘ Plan your features at the time of the launch properly.

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More About Author

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Vishal Nakum

Vishal Nakum is a tech enthusiast with a passion for exploring the latest developments in the world of technology. He has a keen interest in emerging technologies such as Artificial Intelligence, Machine Learning, and Blockchain, and enjoys keeping up-to-date with the latest trends and advancements in these fields. Vishal is an avid learner and is always on the lookout for new ways to expand his knowledge and skills. He is also a creative thinker and enjoys experimenting with new ideas and concepts. In his free time, Vishal enjoys playing video games and reading books on technology and science.