Running head: UBER CASE ANALYSIS 1

Case Analysis: Adapting Uber’s Managerial Strategy to the Changing Business Environment

Student’s Name

Institution Name
UBER CASE ANALYSIS 2

Case Analysis: Adapting Uber’s Managerial Strategy to the Changing Business

Environment
Background
Uber is a ride-sharing application that provides substitute services for traditional taxi
operations. Uber emerged in the early 2010s during the rise of the popularity of mobile
applications. The company’s founders, Garrett Camp and Travis Kalanick, envisioned Uber as a
service that connected drivers and passengers and facilitated quicker transactions between the
two groups. Passengers who used the app enjoyed benefits like quick and convenient access to
transportation, cheaper rides, and better reliability compared to traditional taxi cabs. On the other
hand, Uber drivers enjoyed access to a wider client base, fewer professional restrictions and
requirements, and flexibility in their operating periods. Passengers and drivers relied on a ratings
system to ensure accountability among them, which increased the reliability and credibility of
Uber’s services. By fulfilling the needs of passengers and drivers, Uber carved a niche in the
transportation industry that the company has continued to dominate over time.

Kalanick is Uber’s current CEO. While Kalanick’s managerial strategy played a major
role in influencing the company’s rise to dominance in its market segment, his managerial
approach is a cause of concern for the company as its strategic vision and goals continue to
change. Kalanick’s aggressive managerial technique risks harming the company’s interests as it
looks to establish a stronger global presence in the near future. As such, it is imperative that
Kalanick reorients his management style to guide Uber to success amidst the changing external
environment with which the company has to contend. This paper recommends an alternative
managerial and marketing strategy for Uber as the company seeks to expand its operations into
different countries and cultures.

Marketing Strategy
Uber’s marketing approach has evolved over the course of the company’s history and
growth. When Uber began its operations, the company took a very aggressive marketing
approach that its overall business strategy dictated. Uber operates in the ride-sharing market,
where its key competitors include Lyft, Sidecar, and Hailo. The market environment has very
few barriers to entry in most jurisdictions. The market tends to be very competitive because
drivers and passengers usually have the privilege of choice. Many companies operating in the
ride-sharing market tend to differentiate themselves by price. During its early days, Uber
employed this differentiation strategy and pushed it to the extreme. Besides aggressive price
differentiation, Uber also undertook widespread promotional activities that sought to lure
passengers and drivers to use the company’s services exclusively. Even today, Uber focuses on
price differentiation in the new markets where the company ventures.

Managerial Strategy
Similar to the company’s marketing strategy, Uber’s CEO uses a highly aggressive
managerial approach. Kalanick is characterized as a highly ambitious, opportunistic, charming,
and competitive individual. These personality traits influence Kalanick’s style of leadership and
management. Throughout the company’s history, Kalanick has played a key role in determining
Uber’s vision and developing a unifying strategy to fulfil its goals. Kalanick has also been a key
influence in shaping Uber’s corporate culture. In many ways, Uber’s corporate identity matches
Kalanick’s own personality. Uber is a highly competitive and uncompromising business
UBER CASE ANALYSIS 3

operator, and the company often employs questionable techniques to overcome its rivals. While
Kalanick’s managerial approach helped Uber to grow rapidly, overwhelm its competitors, and
establish a presence in foreign markets, the strategy is at odds with Uber’s current strategic
objective of maintaining a strong global presence and capitalizing on its current market position.

Uber’s Corporate Controversies

Several controversies have arisen over the course of Uber’s history because of the
company’s aggressive marketing and managerial strategies. The controversies include unethical
competitive practices, questionable pricing decisions, and lack of regulatory compliance. During
its early days of operations when Uber was seeking to establish a strong market presence, the
company engaged in some highly unethical anticompetitive practices. First, Uber enrolled
numerous drivers to make fake orders and cancellations on its competitors’ apps. The effect of
this practice was that it harmed the credibility of the rival apps among passengers and drivers.
Uber also offered passengers and drivers excessive discounts to incentivize them to use their own
app. By doing so, Uber drove down the prices of the ride sharing services drastically and
suffocated its competition.

At the same time, Uber has a controversial history of dynamic pricing that some critics
have likened to price gouging. Uber uses a surge pricing system that lowers the prices of rides
when demand is low, and increases the prices when demand for rides is high. This model has
various adverse implications. First, passengers are likely to pay more when they need to travel
the most. This may include during peak work and travel hours, as well as during emergency
events when people need to travel quickly to and from various locations. The system is
exploitative towards consumers because it forces them to pay more for Uber’s services in their
time of greatest need. Moreover, the unpredictability of Uber’s prices under the surge model
makes it inconvenient for passengers to plan while relying on the app.

Another example of Uber’s unethical managerial operations is in the company’s lack of

adherence to regulatory requirements. During Uber’s early days, Kalanick opted to implement
lax requirements for its drivers so that more people would find the company’s service easier and
more convenient to use. While Uber succeeded in this regard, the company created certain
problems for itself and its stakeholders through its lax screening policies. For one, Uber
undermined the welfare of its drivers and passengers by implementing a faulty screening system
that had minimal requirements for users. Instead, Uber relied on its mutual ratings system as a
method of enforcing greater accountability. In many instances, this system has let down
passengers and drivers as they have been involved in kidnappings and other malicious events.
Moreover, Uber has continuously evaded efforts to compel the company to adhere to regulatory
requirements that apply to the taxi industry. Uber labelled itself as a tech company rather than a
taxicab company to avoid having to comply with industry requirements. In many instances,
Kalanick has shown indifference to regulatory mandates, or actively resisted efforts to enforce
compliance within the company. The CEO even approved a social media campaign that used
consumers to exert pressure upon regulatory authorities who tried to bar the company from
operating without the necessary licenses for the taxicab industry.

In addition, Uber has been accused of having lax data protection policies and misusing
data from its consumers for malicious purposes. In the past, Uber was accused of tracking
UBER CASE ANALYSIS 4

journalists who were critical of the company’s services, and digging up dirt on them to coerce
them into reviewing the company positively. Uber has also implemented some highly
questionable measures to track the movements of its passengers and learn more about their
habits. Besides, Uber has suffered some embarrassing high profile hacks and data leaks that have
undermined the company’s credibility among many consumers. All of these occurrences
highlight the urgent need for a strategic managerial and marketing realignment at Uber if the
company aspires to have a stronger global presence.

Recommended Strategy
One of Uber’s current strategic initiatives is to establish a stronger presence globally by
penetrating foreign markets. Although Uber’s aggressive marketing and managerial strategies
have helped the company to succeed in the domestic ride sharing market in the U.S., the
company must adopt a more diplomatic and conforming approach as it expands globally. Many
foreign markets have different regulatory, cultural, and competitive environments compared to
the U.S. Some foreign regulators, competitors and consumers may not accept Uber’s aggressive
and ethically questionable marketing practices. For instance, while Kalanick has been largely
successful at evading regulatory compliance, some foreign governments will simply kick Uber
out of their markets if the company fails to abide by their conditions. As such, Uber must adopt a
more diplomatic approach to its strategic business decisions if the company wishes to thrive in
foreign markets.

Another aspect of Uber’s operations that the company must change is its culture.
Kalanick has had a profound influence in shaping Uber’s organizational culture during the period
that he has been in charge as CEO. Kalanick’s ethical perspectives, which are driven by his own
competitive streak, ultimately influence the actions and decisions of other workers within the
company. Uber’s questionable ethical past reflects poorly on the company’s image. Uber must
reform this problem by reorienting its culture to promote values such as fairness, ethical
competition, and prioritizing the needs of its consumers. This will make it easier for Uber to
develop business policies that appeal to foreign consumers who may have different expectations
for businesses compared to domestic consumers in the U.S.

Uber must also adhere to regulations and ethical competitive operations in its foreign
operations. It is conceivable that some foreign markets may require aggressive marketing
approaches such as the ones that Uber has implemented in the past. However, other markets may
be less tolerant towards companies that they perceive as ethically questionable. Going forward,
Uber will have to discern the external business environments of the various foreign markets in
which it operates, and adjust its marketing and managerial approaches accordingly. Such a high
level of strategic adaptability will enable Uber to morph its decisions in accordance with the
prevailing factors across the global market.

Implementation
To ensure the success of its refocused marketing and managerial strategies, Uber must
continuously evaluate the impact of its actions and decisions in foreign markets. Uber should
have relevant metrics that conform to its marketing and managerial decisions, and the company
should keep track of these metrics meticulously. Continuously evaluating the impact of its
decisions will help Uber to streamline its marketing and managerial operations depending on the
UBER CASE ANALYSIS 5

markets where it operates. Kalanick has an important role to play in the strategic corporate
realignment at Uber considering the influence that the CEO currently has at the company. He
must guide the company in outlining its vision and goals for foreign markets. He must inspire a
change in Uber’s organizational culture, which will facilitate improvements in the company’s
image among consumers. Crucially, given his experience at the helm of Uber, Kalanick must
oversee the establishment of new standards of marketing and managerial decisions that will
guide Uber in its journey towards global competitiveness.
UBER CASE ANALYSIS 6

Reference
Brett P. Matherne, Jay O’Toole, (2017) "Uber: aggressive management for growth", The CASE
Journal, Vol. 13 Issue: 4, pp. 561-586, https://doi.org/10.1108/TCJ-10-2015-0062