Uber SWOT Analysis

Published June 21, 2021 | Author: PenMyPaper

Uber has become one of the most popular online ride hailing platforms, which operates in 900 cities in 80 countries. The company allows passengers to use its smartphone application to call for cabs, with great convenience. The company has also expanded its venture through diversification into other sectors such as food delivery and freight logistics.A thorough assessment of the internal and external factors of the company, using SWOT analysis can help in understanding how the company operates its business venture. You can also use it as a reference for your own marketing essay on Uber.

Strengths

The biggest strength of Uber liesin its market share especially in its domestic market. As of April 2020, the company owned 71% market share in the US, which indicates that the firm has penetrated deeply into the home market. The high market share has allowed Uber to cater to a larger number of customers, leading to higher revenue generation. As of 2019, Uber has recorded a revenue of USD 14 billion. The high revenue generation of the company can be considered as one of its key strengths, as it enables the company to expand its business into multiple international markets and industries.

The brand image of Uber can also be considered as its strength. As of 2019, the company has recorded a brand valuation of close to USD 90 billion. Moreover, the brand presence, relevance and consistency has been found to be quite high, high indicates that it can attract a large number of customers to avail its services.

The diversified nature of Uber’s business, also acts as a strength for the company. Currently, Uber operates in multiple sectors, such as online food delivery and freight logistics. This as a result has enabled the company to earn revenues from multiple sources. Not only does this help in improving the financials of the company, but it also reduces the risk of operations.

Finally, it should be stated that the strength of Uber also lies in its quality of service. The company has adopted advanced technologies to create interconnected interfaces which can seamlessly allow its users to avail the desired services as required. Passengers can easily call for cabs, divers can easily locate their passengers, customers can instantly order food from their favorite nearby restaurants.

Weakness

The most concerning weakness of Uber is its profitability. Even though the company has managed to earned increased revenue over the past years, and have attracted handsome funding from investors, but it is struggling to make any profit. As shown in the figure, Uber has seen a steady growth in revenue, but a very poor performance in net income. As of 2019, the company has suffered a loss of USD 6.97 billion. This the most vital aspect of the company that you need to learn about Uber and other ride hailing companies. If you are not how to put this idea into words appropriately, we recommend that you buy a essay written by academic connoisseurs.

The weakness of the company also lies on its over-dependence on the drivers for hire. Uber acts as the platform which allows passengers to easily call cab drivers for hire. The company itself does not provide the transportation services to the customers. This as a result, makes the firm overly dependent on the cab drivers, thereby increasing the bargaining power of suppliers. Moreover, it also gives very little control to the company over the quality of experience for the passengers during the transportation.

Over the recent years, Uber has faced severe controversies, surrounding unprofessional behavior by the cab drivers. This has led poor corporate image for the company. Moreover, Uber has faced several law suits by its stakeholders, leading to increased financial costs for the firm.

Opportunity

The ride hailing industry has seen significant growth over the years and is forecasted to grow further in the near future. It is expected that the industry is likely to be valuated by USD 365 billion by the year 2024, with CAGR 17.5%. It has been also found that the market penetration is also going to increase. These trends suggest that Uber has significant growth opportunities in the global market. The increase in market demand can help Uber to increase its revenue.

The potential industry growth has attracted a lot of investments for the existing market players. This gives the company the opportunity to strengthen its financial status and invest more on business development.

Uber can also leverage from the growth in the online food delivery booking sector. Its subsidiary, Uber Eats can benefit from the increased market demand, thereby allowing the parent company to earn more revenue.

The increasing demand for various mobility services in the global market gives Uber the opportunity to enter into more market locations and related industries through diversification. This can help the company to establish more sources of revenue by catering to a much wider customer base.

Threats

Uber faces significant threat from other rival brands. Some of the top competitors of Uber are Lyft, Didi, Ola, Bolt, Grab, etc. Each of these market players seek to offer attractive value proposition and better convenience to its passengers and partnered drivers. Aggressive marketing strategies and promotional offers are used by every one of them to grab the attention of the passengers.

The company has been found to face prominent threat from the divers’ union. In a bid to force Uber to designate drivers as employees and not independent contractors, the company has faced a lot of uproar. Moreover, it has also faced threat from certain political groups as well. In the past year, Uber has spent more than 2 million to strengthen its relationship with the US government. This, according to expert help with writing essays, is one of the most important fact about Uber at present day, which you can use it in your assignment.

Uber faces ban and severe restriction from governing body in London. Failing to meet the desired regulations and operating policies, the license of the company has been revoked by the government, thereby limiting its operation in London. This indicates that the political environment of a region can potentially threaten the business operations of Uber.

To Sum it Up

Uber has a strong financial status, owing to current market growth and drawing investments from key investors. It has also led to the high brand valuation as well. However, despite of the high influx of cash, the company is struggling to make any profit for itself. Uber has the opportunity for future growth due to high market demand for ride hailing and other mobility services. Along these opportunities, the company also faces significant threats from its rivals, labor unions and governing bodies. At this point, you should be able to prepare an in-depth SWOT analysis without asking for any assignment writing help.

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