Uber Service Audit Group

Report AMB340 – Services Marketing

Word count: 2200
Student Name: Skye Mylan Amy Munro Jack Power

Student Number: n9294333 n8863911 n9150226

Tutor: Kate Letheren Wednesday 16th June 2016 Semester 1

Uber Service Audit Group Report

Table of Contents

1.0 Introduction...............................................................................................................................2
2.0 Service Marketing Mix Analysis...............................................................................................2
2.1 Service Product and Positioning............................................................................................2
2.2 Pricing, Productive Capacity and Demand.............................................................................3
2.3 Physical and Electronic Distribution.......................................................................................3
2.4 Integrated Service Marketing Communication......................................................................4
2.5 Service Process......................................................................................................................5
2.6 Managing People...................................................................................................................5
2.7 Service Scape and Physical Evidence.....................................................................................5
3.0 Recommendations (300 word MAX)..........................................................................................6
Appendix...............................................................................................................................................8
Reference List......................................................................................................................................10

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Uber Service Audit Group Report

1.0 Introduction
Uber is a rapidly growing billion-dollar company providing transportation and delivery services to
consumers in Brisbane and 451 other cities around the world (Uber,2016). The foundation of Uber
services collaborates sophisticated technology, flexibility and demand. The aim is to improve
consumers access to transportation, meet the need for industry demand and to assist in
making/keeping customers safe on the streets (Uber, 2016). According to Lovelock’s service
classification framework Uber combines labour, skill, expertise and defined space facility rental in
order to offer customers valuable benefits (Chew & Lovelock, 2012). In other words, Uber provides
customers with qualified drivers/personnel and a secured seat within a vehicle to take them to their
destination of choice as safely and quickly as possible. This provides insight into what Uber
customers consider valuable and what they are willing to pay for (Wirtz,Lovelock & Chew, 2012).

2.0 Service Marketing Mix Analysis

2.1 Service Product and Positioning

Uber is a service-focused business offering a narrow range of services to a broad segment of the
transportation market (Wirtz, Chew & Lovelock, 2012). It is thought Ubers Target audience includes
men and woman aged between 18-60 years of age looking for convenient taxi like service.

Ubers success is due largely to the effective execution of their product/service design. Uber
expanded on the idea customers within the transportation/delivery market were in need of a faster,
easier, cheaper and more reliable service. This foundation brought them to design a service that
utilises technological resources to reach service objectives.

Ubers core service is the transportation/delivery of customers from point A to point B. To maximise
consumer appeal Uber surrounds the core service with a mixture of facilitating and enhancing
supplementary elements (Lovelock, 1995).

Uber introduced a sophisticated app that takes the fuss out of the usual facilitating functions when
using a transportation service. This app allows customer details to be recorded and remembered for
future transactions with the company. Use of the app assists in perfecting the delivery of the service
by offering informational qualities (About us, fair estimation etc.), GPS location tracking for
simplified order-taking processes and automatic billing/payment systems.

Currently Uber is claiming domination within the industry (Pullen, 2014). This is thought to be due to
the consideration Uber places on exceeding customer’s performance expectations (Brandt, 1988).

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Uber Service Audit Group Report

Uber places itself in direct competition with traditional taxi services adding enhancing service
elements to raise competitive advantage. Uber does this by extending the range of service levels
from low-cost to luxury (Uber,2016). Enhancing elements increase with expected paying price.
Currently Uber provides customers with four levels of service; Economy, Premium, Accessibility &
Carpool.

2.2 Pricing, Productive Capacity and Demand

Uber is committed to being a low-price leader within its industry which means that it employs a
competition based pricing strategy (Gurley, 2014). The ultimate goal of this strategy is for the
company to gain as much exposure to consumers as possible in order to be able to outline the
unique customer experience offered (Gurley, 2014).

Due to this pricing strategy, Uber has experienced exponential growth in business which has led to
some issues achieving production equilibrium during peak periods (Kosoff, 2015). Ultimately Uber is
a market place in which independent drivers are in control of when they will accept passengers,
which during peak periods can cause an issue with demand exceeding the supply (Gurley, 2014).

The research and development it has been found that both the supply curve and the demand curve
for the business are highly elastic (Wirtz, Chew, & Lovelock, 2012). The solution that Uber has
implemented has been to change its pricing strategy to include “surge prices” where the prices are
increased during peak times to ultimately increase the amount of drivers choosing to continue
picking up passengers and also decreasing the demand by consumers (Gurley, 2014). Once the point
is reached where supply once again exceeds demand, prices return to normal, re-establishing the
organisation within its competitive pricing strategy.

This pricing strategy has given the business the ability to influence the supply and demand which
ultimately has had a positive impact on the business as it is able to assure reliability by decreasing
the amount of unfulfilled requests during peak periods (Gurley, 2014).

2.3 Physical and Electronic Distribution

Uber uses both electronic and physical channels to deliver its core service. The service delivery
process begins through the use of an electronic channel, where a person will request to be picked up
by an Uber from a specific location through the App on their smartphone. An Uber driver will then
pick up that person and transport them to their desired location in a motor vehicle. This is the
physical channel through which Uber delivers its core service. All transactions are finalised
electronically, with payment coming directly out of the persons assigned bank account after the trip
is complete [ CITATION Ube16 \l 3081 ].

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Uber Service Audit Group Report

After analysing Uber’s distribution strategy, it is clear that the strategy has been designed with a
focus on providing a convenient and efficient service delivery process for both customers and service
providers. Given the nature of the core service Uber delivers, service providers go to the customers
and both the customers and the service providers are present and active in the servicescape
[ CITATION Wir12 \l 3081 ]. Some convenient and efficient processes that Uber have established in
their distribution strategy include; using the App to, request pick ups, locate customers, track the
whereabouts of the driver, acquire an estimated fair amount and also to finalise transactions. In
order to make the distribution strategy even more convenient Uber could develop and introduce a
technology where they would be able to track regular Uber user’s whereabouts through their
smartphone and position their drivers within close distance of those people during peak times, for
instance when these customers might be finishing work or leaving a bar.

2.4 Integrated Service Marketing Communication

Uber uses a wide range of effective marketing communications to create awareness and educate
consumers on Uber and its services (Hoffman & Bateson, 2011). It is thought in order for all
communications within the marketing mix to remain consistent, relevant and effective Uber bases
planning on the 5 W’s Model. Focusing on; Who, What, Where and When do these communications
need to take place (Chew & Lovelock, 2012).

Currently, Uber utilizes advertising, sales promotions, publicity and instructional materials.
Advertising for the company is prominently based online. Commercials, notices and eye catching
images are placed on digital media platforms that receive high traffic flow. Platforms include
YouTube, Facebook, Websites and pop-up ads. Advertising billboards/signs can also be found close
to train stations and bus stops effectively utilising product placement (Schultz, 1992).

Ubers instructional materials in particular the Uber website appear to be more employee focused.
This may be frustrating or confusing to consumers wanting to conduct a quick information search.
This could be improved by increasing consumer focus on the Uber homepage or landing page from
google search (Baloglu & Pekcan, 2006).

Interestingly, Uber chooses to put minimal effort into the integration of corporate design. Despite
the Uber logo being integrated quite strongly throughout other utilized areas of the marketing mix
they do not require staff to wear uniforms or a present standardised rental spaces.

2.5 Service Process

There are a number of key process steps which Uber has established in order to create and deliver
its service process. These steps are outlined in the Blueprint of Uber’s service process in the

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Uber Service Audit Group Report

Appendices. The major potential fail point of the service process is the customers ride to the
destination. Given the customers are dealing directly with a front-line staff member whose
behaviour and appearance can have a major effect on the service experience for the customers
[ CITATION Wir12 \l 3081 ]. Another fail point could be the time customers have to wait from when
they have requested the Uber till when it arrives. In regards to service standards and targets the
Uber app gives approximations to the minute of the estimated time of arrival of the Uber driver and
how long it will take to get to the customers desired destination. These approximations should be
relatively accurate to ensure that service processes perform well against customer expectations
[ CITATION Wir12 \l 3081 ].

2.6 Managing People

Uber uses a number of different human resource management strategies to provide itself with the
best possible opportunity to operate in a cycle of success. With the aim of keeping their employees
happy and receiving the benefits which come of this Uber provides its drivers with attractive work
conditions, opportunities, freedoms and discounts. Some of these driver benefits include; the ability
to set their own work schedule, earn money on there own terms, 24/7 support through the use of
the App, discounts on phone plans, car maintenance and fuel.

Given the nature of the service providing drivers with the safest possible working conditions is
important to Uber, that’s why they are continuing to develop technologies to help keep drivers safer
every day [ CITATION Ube162 \l 3081 ]. Some of the safety procedures and technologies that Uber
currently have in place for drivers include; no anonymous pickups, personal information like phone
numbers stay private, cashless payments and being to rate rider [ CITATION Ube162 \l 3081 ]. Uber
could look to introduce a rewards system for drivers which score consistently high star rating, work
the most hours and make the most money for the organization. These rewards could include
holidays, professional development courses and cash bonuses.

2.7 Service Scape and Physical Evidence

As Uber works with independent drivers, ultimately the service scape and physical evidence that the
consumer is exposed to may differ between drivers as they are the environment in which the service
is delivered and encompass any tangible commodities that facilitate performance (Wirtz et al.,
2012).

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Uber Service Audit Group Report

The servicescape for Uber is the physical vehicle that takes the consumer from point A to point B.
Although Uber has not set a standard vehicle to be used for the service, they have implemented
certain restrictions to ensure that there is a level of consistency offered through the servicescape.
Some of the restrictions set by the organisation include that all cars must be less than 7 years old
and a consistently clean interior (Uber, 2016). These restrictions are specifically designed to
influence the servicescape and ultimately how the brand is perceived by consumers through
manipulating the physical environment.

Further restrictions set by the business is that a driver must maintain a high average rating given by
consumers which ultimately influences the extra tangible commodities that drivers offer such as
making the environment more accommodating by providing phone chargers or bottled water (Uber,
2016). The physical evidence that is offered by the service are ultimately the differentiation for Uber
from traditional taxi services and positions the company within a more luxury based transportation.

3.0 Recommendations
Despite Ubers overwhelming strengths based on audit findings further improvement of marketing
communication integration, servicescape and distribution management is required. All
recommendations aim to enhance Ubers service performance and increase ability to reach company
objectives without subtracting from Ubers originality or uniqueness.

Firstly, it is recommended Uber strengthens their corporate design by introducing a standardised

uniform for all Uber drivers to wear. To keep costs to a minimal this could consist of a standard
collared shirt with the Uber logo and the employee’s choice of suitable pants and footwear. It is
thought not only will this assist in driver identification it will strengthen brand identity
(Madhavaram, Badrinarayanan & McDonald,2005). Consequentially consumers are going to place
more trust in Ubers services, drivers and brand, reaching towards Ubers objective to keep people
safe on the streets (Delgado-Ballester & Munuera-Alemán,2001). Importantly, this will increase
customer loyalty & strengthen the integration of Ubers marketing communications (Wirtz et al.,
2012).

Complimentary to the first recommendation, the second is to standardise the additional tangible
commodities offered in the physical environment and servicescape. By ensuring that all drivers
maintain set offerings such as auxiliary cables or phone chargers it will be able to ensure that
consumers know what to expect with the service and set a standard that is consistent throughout
the company. Through an avenue of standardisation, it would also be able to secure Ubers

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Uber Service Audit Group Report

positioning as a luxury transportation service and continue to highlight the differentiation from
traditional taxi services (Wirtz et al,2012).

Finally, in order to manage demand and increase distribution efficiency it is recommended there is
further utilization of Ubers sophisticated app technology. As mentioned earlier Uber collects useful
data when locating customers for collection, building on this Uber can use location data to alert
drivers of high trafficked areas. This would reduce waiting time and provide convenience to both
customers and employees improving the overall interpersonal quality of the service (Crosby, Evans,
& Cowles 1990). Further manipulation of this data could allow Uber to send to pop-up notifications
to customers in high trafficked areas to remind them of the Uber services availability possibly
deterring them from unconsciously seeking a taxi or similar service. Importantly, this provides Uber
with an opportunity to secure themselves positioning in consumer’s mind during their decision
making process, notably allowing for recognition/selection during memory recall for information
search (Hoyer, 1984).

To evaluate the success of these recommendations it is suggested Uber sets strong key performance
indicators and that include:

 Customer satisfaction rates (online surveys or quick app service response rating)
 Customer retention (using app data to determine customer frequency and loyalty)
 And Employee retention (employees are likely to remain when happy with the quality of
their treatment and feel empowered within their job title).

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Uber Service Audit Group Report

Appendix

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Uber Service Audit Group Report

Diagram 1 : Uber Service Blueprint

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Uber Service Audit Group Report

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Uber Service Audit Group Report

Reference List

Baloglu, S., & Pekcan, Y. A. (2006). The website design and Internet site marketing practices of
upscale and luxury hotels in Turkey. Tourism Management, 27(1), 171-176.

Crosby, L. A., Evans, K. R., & Cowles, D. (1990). Relationship quality in services selling: an
interpersonal influence perspective. The journal of marketing, 68-81.

Delgado-Ballester, E., & Luis Munuera-Alemán, J. (2001). Brand trust in the context of consumer
loyalty. European Journal of marketing, 35(11/12), 1238-1258.

dynamic-pricing-model/

from http://abovethecrowd.com/2014/03/11/a-deeper-look-at-ubers

from http://www.businessinsider.com.au/uber-surge-pricing-on-new

Gurley, B. (2014). A Deeper Look at Uber’s Dynamic Pricing Model. Retrieved

Hoffman, K. D., & Bateson, J. E. (2011). Services marketing: Concepts, strategies, & cases (4th ed.).
Mason, OH: South-Western Cengage Learning.

Hoyer, W. D. (1984). An examination of consumer decision making for a common repeat purchase
product. Journal of consumer research, 822-829.

Kosoff, M. (2015). Stop Complaining About Uber’s Surge Pricing. Retrieved

Lovelock, C. (1995). Competing on service: technology and teamwork in supplementary

services. Planning Review, 23(4), 32-47.

Madhavaram, S., Badrinarayanan, V., & McDonald, R. E. (2005). Integrated marketing

communication (IMC) and brand identity as critical components of brand equity strategy: A
conceptual framework and research propositions.Journal of Advertising, 34(4), 69-80.

Pullen, J. P. (2014, November 4). Everything you need to know about Uber. Retrieved May 26, 2016,
from http://time.com/3556741/uber

Randall Brandt, D. (1988). How service marketers can identify value-enhancing service
elements. Journal of Services Marketing, 2(3), 35-41.

Schultz, D. E. (1992). Integrated marketing communications. Journal of Promotion

Management, 1(1), 99-104.

Uber . (2016). Always The Ride You Want. Retrieved from https://www.uber.com/ride/

Uber. (2016). Ride with Uber. Retrieved May 24, 2016, from https://www.uber.com/ride

Uber. (2016). Saftey Behind the Wheel. Retrieved from https://www.uber.com/drive/safety/

Uber. (2016). Work That Puts You First. Retrieved from https://www.uber.com/drive/

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Wirtz, J., Chew, P., & Lovelock, C. H. (2012). Essentials of services marketing (2nd ed.). Singapore:
Pearson Education South Asia Pte. Pg. 14,15

years-eve-2015-10

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