Social forces like consumerswanting fast, reliable and cheap ride-sharing can drive the company’s strategicstrategy as their company’s success counts onridership and reputation. Uber’s “digital strategy is about leveraging yourknowledge of each customer’s preferences and using digital tools to customizehis experience” (GOLDENBERG, 2016, pg.6). Their digital strategy involves the Uber app that allows customers tohail a ride just by using their app.
Italso involves the collection of customer information and using it to improveservice as they can use data like age or sex of riders for marketing and commonpick-up and drop-off spots to better saturate an area with their service (GOLDENBERG,2016). Uber’s strategic strategy is multi-layeredwhere one force of the macroenvironment could impact all the rest. If the economy tanks, fuel prices rise orgovernment regulations passed, just oneof these elements would hurt the company financially.Economic forces can impactUber’s ability to expand service or re-invest in the company for new technology,training, and equipment. In many ways, the economy will dictate their strategicstrategy for investing and expansion.
The passing of the Trump tax plan willcertainly boost the company’s bottom line as they will now pay 21% forcorporate take vs. 35%. The tax cutswould give the company extra revenue to make those investments to recruit moredrivers and technology expansion.Uber’s strategic strategy involvesextensive analysis of the elements in the external environment. Macroenvironment is elements that could impactUber’s revenue and growth (Parnell, 2016). These elements or categories involve”political-legal, economic, social, and technological” (Parnell, 2016, p.
43). Uber’s whole existence and expansion are about recruiting more drivers’ every day at low cost and “differentiationelements like application program interface and flexible employment” (Hales and Mclarney, 2017,p.10). Since Uber drivers own their cars,the company doesn’t have to pay for the driver’s gas, insurance or car maintenance;this is a substantial saving for thecompany and a big advantage over cab companies as they have extensive overheadto keep their cabs running.
Cabcompanies get regulated by local andstate ordinances & laws, were Uberdrivers only have to follow the driving laws of the state they work. The force ofpolitical-legal factors such as politicians at the local, state and federallevels who want to protect consumers safety and rights against abuse and harmis a tightrope the company has to walk. Theywant to appease everyone, so they don’t become tightly regulated like cabcompanies as this costs an extensive amount of money for licensing, training,fines, etc. This tightrope wouldconsist of a strategic strategy utilizing lobbyists to convince politicians notto regulate.Uber is a personal taxi service where anyone with a car, license andinsurance can apply to be an independent contractor and work on their owntime. Consumers use the service bydownloading the Uber app and then simply requesting a driver in the area tocome pick them up (Uber.com, 2018). Uber has one main competitor called Lyft andgeneral taxi services across the nation as theircompetition.
To remain competitive, Uber must formulate a strategy thatmakes their service more appealing thantheir competitors and continues lobbyingefforts to curtail government regulation of their industry. Uber’s strategic process involves “operatingin ‘sharing economies’ of collaborative consumption (Botsman& Rogers,2010), where people offer and share underutilized resources in creative, newways” (Cohen and Kietzmann, 2014, p.279).