Entrepreneurship & Innovation - 15CSCI03H
Dr. Hala Hattab

Moamen Abd El KAfy
118301
Word Count: 2673
INDEX

Introduction 2
History 2
Operations 3
Positioning 4
Reasons for Success 6
Strategic Planning 8
Monitored on-demand Economy 9
Service Availability & Quality 10
Conclusion 12
References 13
Introduction
Modern transportation is an overwhelming part of the days of 7 billion people in the world. People have to get to places and that requires a lot of active transportation methods, which in turn creates a very large market in itself. In Europe alone, the market of transportation employs 10 million people which represent an astounding 6 percent of the GDP as stated by the European Commission Department. Many businesses have innovated and came up with new ideas that changed the market such as Taxi offices. However, it was no other than Uber that invaded the market roughly in a period of 4 years to be worth $50 billion, as evaluated by Forbes, through integrating modern technology and life styles of people with its services. Uber became the world's largest car service by 2014 and was ranked the 48th most powerful company in America. The reasons that are believed to be behind Uber's success shall be discussed in this paper considering different factors.

History
It all started on a snowy night in Paris in 2008 when and Garret Camp could not get a cab and vowed to solve the problem with a brilliant app. Camp and Kalanick launched UberCab's mobile compatible application in San Francisco 2011. The company expanded throughout America until going global in 2013 with more than 300 cities in 58 countries at service. Uber does not own any cars and the drivers are not hired by Uber. Instead, Uber acts a portal between people who own cars and people who need transportation. In other words, Uber runs a logistics network that matches drivers and riders for a share of 15% per fare from the driver's account. Uber invaded an existing market with new ideas and created a field for other businesses to follow their steps in a path known as Uberification- the rise of user to user services. Recently, Uber faced disputes with taxi drivers and some governments around the world in which taxi drivers protested against the prices of reduction. However, Uber keeps on expanding and creating positive effects in different aspects of life.

Operations
Uber owns no cars, instead it owns an interface. The mobile application can be downloaded on any mobile device. Customers must sign up for a free account in order to use Uber. With a click of a button, Uber tracks the customer's location using GPS and offers a list of available Uber drivers in the area. Once the driver gets selected, the customer gets to rate the driver and conclude the payment. The user-friendly interface helps people interact with drivers in countries other than their own.
To become an Uber driver, one must obtain a commercial driver's license depending on the laws of the country. Drivers must not be less than 21 years old, own a 2000 or newer vehicle and pass an interview and a background check. After the requirements have been passed, drivers are connected to riders directly. Uber cuts a 20% share out of the driver's total fare. If the car is driving at the speed of 18 km/h, the fare is calculated on a distance basis; otherwise, it is on a time basis. Drivers get paid on a weekly basis by Uber through different transactions. Uber sets the transaction that best fit the driver in order to ease the process of money transfer.
Positioning
Shostack (1987) suggested that service firms should position their products based on structural complementarity, structural diversity, and overall development direction. In that context, Uber is all about diversity since it targets car owners and commuters all over the world. Uber created a unique personality and identity which earned it a positive brand image, which is the sum of identity, positioning, personality, character, and culture (Upshaw, 1995, p. 14).
In its creative quest to reach success, Uber positioned itself at the top of its market by tackling problems that face both drivers and customers once and for all. Drivers get to save the time and gas they spend on searching for customers and they also get to have very flexible working hours. Uber eliminates risks of drivers not being able to cover their expenses by providing drivers with regular customers. This adds more wellness to the overall state of drivers and gives them a sense of security which is an important aspect of Maslow's hierarchy of needs. Some of the problems that Uber aims to solve for most customers include the time wasted during waiting or looking for a driver, insecurity and fear of strange drivers, safe transportation methods and pre-set fares. The solutions provided by Uber to these issues are the main reasons of success for Uber.

Uber gives chances to people who do not have the luxury of calling a chauffeur and welcomes them into a world they have never tried before. Uber makes offers for people in many unfortunate and developing residential areas in which people get credit for upcoming rides for free. Uber also positioned itself in the luxurious market. Uber set a New York helicopter taxi ride for $3,000 in order to reach for all market segments. Women make up nearly 14% of Uber drivers and 8% of female taxi drivers. Uber encourages female workforce by setting fewer working hours for females.

Reasons for Success Whether it was popularity, innovation or a multi-billion dollar value that determines success, then Uber must be extremely successful. The variables of success vary widely due to different markets and intended results. Uber's managed to create a long-term value in which it became a must have service for thousands of its customers. In other words, Uber turned into a habit for many of its clients. Uber achieved this status through creative marketing in both social and managerial sectors. Marketing is a social and managerial process by which marketers create long-term superior value (Kolter, 1996). Uber’s success can be related to many factors including having a positive impact on the economy, lives of people and contribution to a greener world by introducing car-pooling in a new exciting way for users. Some of the factors that lead to the success of Uber will be discussed in the following pages.

* Strategic Planning
Strategic planning is a very critical variable in the equation of success when it comes to international service providers. Strategic planning is the process of defining strategy, direction and resources allocation. Founders of Uber integrated strategic thinking with strategic planning to come up with the algorithm of worldwide fame. Uber is the largest car service provider but it has no cars. To work out such a massive number of partners (drivers) takes a lot of planning and a tough operation management base. Moreover, Uber used a strategy in which it offered to people better life opportunities which can be earned through its business. Benefits for Uber drivers have a positive effect on the implementation of the service. Uber geographically connects drivers and customers in which some drivers make $500 per day. Uber focused on the small details when it came to strategic planning. For instance, the application comes in 32 different languages in order to fit the masses. The application used background checking on driver in order to ensure safety among riders and exterminate the fear of riding with strangers.
Because Uber is a worldwide service, it must use strategic marketing implementations in order to reach all people from different cultures. In that sense, Uber's strategic marketing campaigns prove that the company uses successful techniques to apply different advertisements based on each culture. For instance, Uber provided a DeLorean DMC-12, an American movie icon car, to give people rides in a way to bond socially with the audience. Such marketing techniques have been used over and over in new creative ways which created a powerful brand image in the customer's mind. As a result, some people in countries in which Uber does not operate are familiar with the concept due to the powerful strategic planning of the company. The company also participated in tax regulation programs as part of its corporate social responsibility. Empiric studies’ findings indicate a correlation between strategic planning and performance (Berry 1997). Due to the massive efforts Uber undertakes in running the business, it is safe to say that the company is performing positively. Empiric studies’ findings indicate a correlation between strategic planning and performance (Berry 1997).

* Monitored On-demand Economy
With the increasing number of population and unemployment rates, many people are left jobless. Companies and big start-ups as well tend to look for new ways whether through technology or elsewhere to cut down the workforce in order to lower expenses in such an unstable world. Smart entrepreneurs realize how to minimize the cost of workforce and integrate talent into a more productive organizational chart. Technology is available right at the hands of almost everybody through mobile phones daily; this integration opens new gates to on-demand economy and gives opportunities to thousands of people.
On-demand economy is a business model in which services are traded on the basis of demand rather than ownership. Uber is one of the most used commercial enterprises that used talent and technology to involve on-demand economy. The on-demand economy is all about "now" and "transparency". In other words, a customer needs to be picked up in a specific time. To enhance the experience, Uber uses live GPS navigation for the customer to track the driver on the mobile device in order to determine distance and time accurately. This technology allows more transparency as possible. Uber took on-demand economy to a whole new level since it does not have any drivers at all, hence, a very low risk of potential failure. This strategy dramatically changed the concept of Uber's market.
However with such a massive number of drivers, 200,000 only in the United States, come issues of safety and reputation risks for the company. Yet, Uber seems to be using different variable in order to stay in control. For instance, Uber focuses on educating people on how the company will give you opportunities of work yet being free to choose hours of work. From its side, Uber calls the drivers "partner-drivers" in order to state that the drivers are partners of Uber rather than employees in a company. This sense of psychological messages prints an attractive brand image in minds of people. To protect its privacy and customers, Uber has the right to terminate contracts with drivers if the ratings are too low which allows its company to maintain its reputation. Once a driver applies to be partners with Uber, a Pro Uber driver nearby visits the applicant and goes on a test drive to give judgment to the Uber administration in order to ensure quality. Uber maintains a well-endowed organizational culture while providing safety regulations and standards.
The problem with economy nowadays is worldwide. Unemployment reached high rates in many countries; Uber noticed this concern and took it as an advantage to leap to success. Many businesses have headed and are heading to the on-demand economy. Uber is considered as one of the leaders of on-demand economy which is a revolution in workforce divisions. With this being stated, it is safe to suggest that this is a major attribute to the success of Uber. * Service Availability & Quality
Some of the problems Uber is tackling are poor cab infrastructure in some cities, poor service, poor experience, late cars and more. Uber fixed this problem by tackling the entire experience from mobile hailing, easy payments, better cars and driver ratings. Using an Uber cab is as easy as pressing a button on a phone and paying by a visa/master card which dissolves the hassle of change and tips. In some cities, Uber is considered a safer way to commute using cabs as all drivers are interviewed and get background check ups. What makes Uber stand out is the fact that it is the first in the market to use technology in that way. People appreciate any service that eases up any task they have to go through. The service is available around many countries in the same way, which makes people who travel a lot familiar with moving around new cities. Uber depended mainly on the word of mouth which was not difficult due to its spectacular service that saved a lot of frustration for many people. “We’ve found that our growth is driven substantially by word of mouth. When someone sees the ease of use, the fact that they press a button on their phone and in less than 5 minutes a car appears, they inevitably become a brand advocate”, Max Crowley of Uber Chicago. The company experiments with many new services such as: on-demand Ice Cream, roses for Valentine’s Day, barbecue, UberCHOPPER and much more. The versatile service prove that the company keeps on innovating and tries to achieve more as it grows, which is an aspect of a successful company. A successful startup always innovates and adds more to it and never stays quite. Another major reason for the success of Uber is the lack of big competitors such as itself. Uber aims to change the entire world by changing the way people transport. Not only that, but Uber also aims to introduce self-driven cars during the next 7-10 years which will ridiculously reduce fares and make calling an Uber much cheaper than owning a vehicle. Uber’s availability and high quality of service are maintained by the organization’s complex operations management and strategic planning Business like Uber that bring new concepts to humanity are successful businesses as long as they aim to make life easier.

Conclusion
Uber is a successful start-up that managed to integrate modern business models with modern technology in times where economies are not doing well. It remains to be one of the fastest growing companies in the world. Although the idea is not original, it surely is unique and is applied in a new easy to use way. Uber is expanding its partner drivers and is planning to launch its services in new countries as time goes by. As per its responsibilities to provide equal jobs for everybody, Uber pledges to provide 1,000,000 jobs for women by the year 2020.
Uber is expanding in different markets as well and is planning on creating self-driving cars in order to reduce costs on people. However, the self-driving cars will be applied in not less than a decade as Co-Founder Travis Kalanick stated. In less than 4 years, Uber turned from a single idea into a $50 billion venture that used on-demand economy concepts to hire thousands of partner drivers and serve thousands of customers around the clock.

Bibliography

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