The Competitive Advantage of Uber

Uber’s Operations and Logistics

Uber started operating in 2009 with the intent of providing transport and logistical services to customers through the capitalization on logistics and lifestyles. The company therefore connects its riders with a reliable, safe, and convenient transport system at different prices in several cities globally. In determining the logistics activities and related services that Uber provides worldwide, it is essential to note that Uber majors in transportation services through its different brands that include UberX, UberExec, UberPop, UberBlack, UberVan, and UberRush designed with the intent of meeting the demands of customers worldwide (Gevero, Alves & Durante, 2015). The organization’s primary activities are related to operations, inbound logistics, outbound logistics, sales and services as well as marketing. Inbound logistics enables the organization to engage in the receipt, storage, and distribution of the required inputs to enhance the production processes.

Uber’s Competitive Strategy

Uber’s competitive strategy remains one that is focused on the organization’s practices driven towards ensuring that it is competitive in the corporate market. Among the three competitive strategies designed by Michel Porter, Uber mainly pursues the focus strategy that mainly directs its input in the creation of a niche market as well as the products and services that will be relied on within the market. The use of this strategy enables Uber to create a new market while on the other hand limiting competition for a specific period of time. Uber therefore creates its own niche within the transportation, technological, and hospitality industry, a strategy that has enabled the firm to achieve its competitive edge in the market (Cramer & Krueger, 2016). The focus strategy therefore remains competitive for Uber given that the company is in a position to incorporate technology-based differentiation and cost leadership in achieving its objectives. Unlike its competitors, the company mainly takes a smaller cut ranging between 5-20% and does not hire full-time employees, a strategy that has enabled the organization to cut on its infrastructural and maintenance costs.

References

Cramer, J., & Krueger, A. B. (2016). Disruptive Change in the Taxi Business: The Case of Uber†. American Economic Review, 106(5), 177–182. https://doi.org/10.1257/aer.p20161002

Gevero, A., Alves, E., & Durante, B. (2015). How Uber and Other Ride-Sharing Companies Are Roiling the Taxi Medallion Industry. RMA Journal, 98(4), 36–41.