Every business organisation has to face issues or problems that influence their brand image. It is very important to identify problems that a company is facing by identification of problem areas and based on these findings, an analysis is to be made. This will help an organization to resolve their problems. There are some organisation that conduct competitive analysis for understanding the current trends or strategies of competitors. An understanding of problem areas provides a company with a framework for developments. Based on the problem analysis, an organisation is able to make use of their resources in an efficient manner. This study is going to focus on Uber, a company that falls under ride sharing industry. Although the company is growing in business but it has been facing certain issues in their business. This study will try to identify issues faced by this company and try to give probable solutions.
Background of company
Uber is a car hiring company of America. It has been growing their business on large scale. The customers are able to make use of Uber app for their travel. It has made the life of the people easy because they are able to book cabs with a click. The drivers of Uber use a Smartphone for receiving request of the customers. The fares of Uber are based on dynamic model of pricing. The company has been offering various types of rises to their customers such as UberX and Uber POOL (uberestimate.com.2017). These are made for improving the riding experiences of their customers. A number of legalities are associated with the drivers of Uber. In some cities like Francisco drivers of Uber are required to have a business license.
Figure 1: Logo of Uber
All the drivers of Uber are regarded as independent contractors rather than employees. This is been often debated among judiciaries. Uber Company has adopted a safety mechanism, which is called real time Id check. In this process, driver needs to upload a picture before ride requests. It helps customers to verify identity of the drivers and helps them to prevent any security issues (uberestimate.com.2017).
Recently Uber is facing a number of issues that are raising questions upon its reputation. Mostly drivers of Uber are charged with sexual harassment cases. Furthermore, charges have been made against Uber for using software that will restrict officials from tracking drivers in order to do sting operations. The issues have a direct impact on the sales of Uber. It has been found that customers of Uber are reducing their rides due to such allegation over the company(uberestimate.com.2017). It is degrading its brand image. Studies have shown that market share of the organisation have fallen in America from 80% to 74%. This shows that Uber is losing their market share due to allegations. Uber is required to increase their ride shares because only 6% of the Americans are using Uber app for their rides (uberestimate.com.2017)..
Issues faced by the company
The main issues that are faced by this company are limited customers. In America, there are only 65 per cent of the people making use of this app. Perhaps, the allegations that are put on drivers of Uber have been responsible for such a low customer. Although, in the initial stages, the company has been able to reach to a large number of customers and are becoming one of the global leader in ride sharing. With growing demand for ride, there has been growth in the popularity of riding apps like Via and Lyft. Uber is facing tough challenges from their competitors (Ballinger & Koziorowski, 2017). Generally, success of Uber solely depends on its software. It has been found that Uber apps are using outdated software and drivers are not capable enough to make use of advanced technologies.
There are also issues related to categorising this company under digital service or transport service. If this company has been classified as a transport company then it will need to adopt a insurance and licensing. British court is going to set up a law regarding paying of VAT by Uber. Obstacles have been faced by this company is regarding self-driving initiative (Field et al. 2016). They have been charged of stealing proprietary technology of Waymo. There has been earlier case of parent disputes, however in case of Uber , Waymo has banned Uber from using lidar technology.
Uber is facing huge losses due to legal issues. The parent company's allegation over this company is resulting in huge losses by the company. It was found that Uber is losing global market shares. However, its executives are of the viewpoint that these problems are actually sign of growth. In India, Uber drivers are charged of sexually harassing women and do people of India are making less use of this app.
These problems have resulted in halting of service in countries like Spain and India. In Portland, the Uber service has been banned due to their failure of abiding by the local regulations (Gatev, & Diesen, 2016). The lawsuits at San Francisco and Los Angeles have accused Uber for gouging their customers. Uber has started their cab service in Portland without seeking permission from local authorities. The lawsuits of this city have stopped their operation in that city.
In countries like San Francisco, lawsuits have accused Uber of violating consumer protection legislation. The customer have charged allegations regarding overcharging and misleading them in regards to safety issues. In California, Uber is breaking laws by causing insecurity to customers. They have often accused of charging extra money from them.
Analysis of issues
Uber has initially able to put a control over the riding market, however, it's legal issues have been responsible for its slow growth. Uber has to face a number of challenges due to legal issues. One of the main reasons behind the issue related to sexual harassment cases is lack of enquiry during recruitments of drive. It can be said that drivers of Uber are recruited without checking identity proofs (Homedes & Ugalde, 2014). The company is required to employee drivers only after getting full detail of their background. Sexual harassment case is quite sensitive issues and this may lead to public rage. It will mean loss of reputation. Studies have shown that Uber is losing huge market share due to such legal cases. It is the responsibility of the management team to think over these issues and formulate a framework for ensuring that the entire female customer does not face any security issues. In order to ensure security, that can track the cabs so that they are able to identify locations. This will help the company to help their customers. It is quite essential to provide security to customers because it helps an organisation like Uber to increase their customer base. Satisfied customer will be able to recommend their can service to others. It will increase their market share. Apart from sexual harassment cases, Uber is also charged of breaking laws especially in California (Krasnopolsky, 2013).
Figure 2: Customer experiences
They are not complying with local authorities before starting up their car services. The issues that are faced by this company is their indifference towards their lack of management process. The company has failed to conduct business smoothly. Recently Australian government have charged Uber for paying GST but the higher authorities have not paid heed to it by considering themselves as not a taxi company. It shows that the taxi service app is not able to take legal matters seriously. This is responsible for their slow business growth. If a company faces legal issues then it becomes quite difficult for the company to concentrate on their business. Similarly, these cases are proving negative for this company. The management is required to plan strategies for avoiding such legal issues (Lushchak & Bespalyuk, 2013). Every organisation is required to maintain legalities while doing business. Manager should comply their policies with local policies of a particular country from where they are operating their business. It will help the company to safeguard themselves from legal matters. It is the responsibility of organisations to pay tax to the government for helping government to earn revenues.
One of the problems that are faced by Uber is their lack of adaptation quality. It a general view that when a company does business in a different country then they need to adjust them with the new culture. Each culture represents a different legalities as well as preferences. Uber need to make rules in accordance with a particular country’s culture as well as preferences (Mair & Hehenberger, 2014). In such cases, there are chances of facing a high competitive edge because competitors already have knowledge of the local market. Uber should identify local environment and their demands. For instance: Uber has recently entered market of India and has introduced rickshaw service, however, their service is unable to fulfill service needs of customers. Therefore, it is quite important to have a knowledge regarding geographical or cultural preferences of customers.
A company will face difficulties while doing business in global market. It is quite essential to identify specific service needs of customers. As per the opinion of McDermott (2013), Uber has failed to identify specific needs as well as legal requirement of global market and these have been responsible for low market share. Uber is not able to maintain morality in taxi service. It is one of their negative factors for increasing business chance to their competitors. A comparison with competitors will show that they are able to abide by legalities and so staying ahead of Uber. It can be said that Uber's way of apologizing adds an advantage to their business.
The company has recently managed to apply buses models for encouraging business. The main problem of Uber is not with their business model rather it is with their incapability to make rightful investment.
After going through this study, a number of recommendations can be given to Uber for improving their business and increasing market shares. The following are the recommendations for Uber:
1) Managing business:
The issues or problems that are faced by Uber clearly indicate the fact that the higher authorities are unable to manage their business in an effective and efficient manner. They need to bring a change in their management style by bringing a change in their selection procedure for drivers. It has been found that most of the customers are complaining against drivers of Uber. A proper identity proof is to be presented before selecting any driver.
2) Conducting research while conducting international business:
It is quite important for a multinational company to conduct a thorough research among the countries where they are planning to expand their business. This will help Uber to plan their pricing strategies in accordance with the preferences of customers.
3) Aligning business policies with legislations:
It is found that one of the major problems that is faced by Uber is that the lack of compliance with adequate legislations. This had been responsible for their ban in California. They should maintain legality of a particular country for gaining success in their business.
4) Developing business model:
The company should develop a business model that will help them to innovate their business by different business models. A business model will going to provide a proper direction to business. It will help in specifying needs of customers.
5) Security requirements:
One of the major issues faced by Uber cab service is not able to fulfill the security requirements of female customers. In Asian countries there has been charges made against Uber drivers for sexual harassment. In order to minimize security issues, tracking device can be used so that location of cabs can be traced for securing safety of customers. It will help the company to minimize any issues related to sexual harassment. These kinds of cases are lowering down the reputation of this company. Strict actions are to be taken against cab driver.
The study gave an overview of the issues that are faced by Uber. It can be said that it is quite important to resolve such issues in order to foster growth in business. Every business organisation is require to grow their business by devising strategies for increasing customer satisfaction. Uber has always been charged of cheating upon their customers.
It can be assumed that in order to reduce such incidents in the future, Uber should do their business in accordance with their new business model (Sundh & Mekonnen, 2014). This new model can help them to minimize such legal issues or incidences of security. Their new business model can help them to hold the market share because their new model can help customers to get access to their services in a more efficient way.
After going through the above-mentioned study, it can be said that Uber is facing huge losses in the global market due to their shortcomings. They are unable to meet requirements of their customers . The company lacks a proper management style due to which they are facing legal; issues. It is often found that in some countries, Uber has not complied with local authorities, which has increased their problems. It can be recommended that they are required to follow certain legalities while expanding their business in different countries. A thorough market research is needed for identifying preferences and needs of customers. Studied have found that one of the main problem faced by Uber is their irresponsible attitude towards their business. They are losing market share due to their own faults. They are required to become stricter in their selection of drivers.
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